Native Token
A native token is a digital asset or cryptocurrency that has been created for use within a particular blockchain network. They are often used as the main form of currency on the associated blockchain platform, and may have various utility value in addition to their exchangeable value. Native tokens can be used for transactions between users and applications running on the same blockchain, providing access to features such as distributed storage, staking pools, smart contracts and more.
Native tokens generally have limited transferability across different blockchains, meaning they cannot typically be exchanged for other cryptocurrencies or fiat currencies without special arrangements. In most cases, native tokens are intended to remain within the confines of their own ecosystem when it comes to payments and transfers; however some projects do allow some degree of interoperability with other networks through third-party services like atomic swaps.
The creation of new native tokens is usually managed by an Initial Coin Offering (ICO) process where early adopters purchase the token at its initial price with other cryptos or fiat money before trading begins on exchanges. The ICO process helps ensure that there is sufficient liquidity in the market so traders can buy and sell the token freely once it’s listed on exchanges. In some cases, native tokens also serve as collateral for borrowing funds from DeFi lending platforms like Aave or Compound Finance which allows holders to earn interest income while keeping their capital secured at all times.
As with any investment vehicle make sure you thoroughly research any potential investments before committing your funds into them!
