DeFi tokens A new world of cryptocurrency-based protocols that aim to reproduce traditional financial-system functions (lending and saving, insurance, trading) has emerged in recent years. These protocols issue tokens that perform a wide variety of functions but can also be traded or held like any other cryptocurrency.
What are tokens & how do they work?
Tokens have a huge range of potential functions, from helping make decentralized exchanges possible to selling rare items in video games. But they can all be traded or held like any other cryptocurrency. “Token” is a word that you hear a lot in cryptocurrency.
What does a game token mean?
For example, game tokens at arcades each represent a claim to play a game. If you send someone a token, it "leaves" your account and moves to another person's account. This is why tokens can also signify ownership or facilitate exchanges in property, such as with "non-fungible" tokens.
What are governance tokens?
Governance tokens These are specialized DeFi tokens that give holders a say in the future of a protocol or app, which (being decentralized) don’t have boards of directors or any other central authority. The popular savings protocol Compound, for example, issues all users a token called COMP.
