Types of Crypto Tokens
Crypto assets range from native coins to utility, governance, security, stablecoins, and meme tokens. You'll learn how to categorize them and why it matters for use and risk.
Who Is This For?
- •Users evaluating new tokens
- •Beginners learning what lives in their wallet beyond BTC and ETH
Learning Objectives
- 01Distinguish native coins from tokens built on other chains
- 02Identify utility, governance, security, stablecoin, and meme categories
- 03Recognize common standards like ERC-20 and ERC-721
Coins vs Tokens
The terms “coin” and “token” are often used interchangeably, but they have distinct meanings that affect how assets work and their relationship to blockchain security.
Explore the Difference
Native Coins
Coins are the native currency of their own blockchain. They're used to pay transaction fees and often secure the network through staking or mining.
- •Has its own blockchain
- •Used for transaction fees (gas)
- •Often secures the network
- •Independent consensus mechanism
Coin
Token
Token Categories
Tokens serve different purposes and carry different risks. Understanding the category helps you evaluate what you're actually buying.
Explore Token Categories
Utility Tokens
Tokens that provide access to a product, service, or network functionality.
Key Characteristics
- Required or useful within specific ecosystem
- Value derived from demand for service
- Often has clear use case
Risks to Consider
- Utility may be replaced by competitors
- Value tied to platform adoption
- Token may not be required for service
Standards and Interactions
Token standards define how tokens behave. They ensure wallets, exchanges, and dApps can interact with tokens consistently.
Token Standards Explorer
ERC-20
The standard for fungible tokens. Each token is identical and interchangeable, like dollars.
Contract Address Verification
Always verify contract addresses! Scammers create fake tokens with identical names. The address is the only reliable identifier.
0xA0b86991...3606eB480x51491077...EcF986CA0x1f9840a8...4201F984Quick Standards Reference
| Standard | Type | Unique IDs | Use Case |
|---|---|---|---|
| ERC-20 | Fungible | No | Currencies, utility tokens |
| ERC-721 | Non-Fungible | Yes | NFTs, unique assets |
| ERC-1155 | Both | Yes | Gaming, mixed collections |
Common Mistakes & Gotchas
Token confusion costs people real money. Avoid these common pitfalls:
⚠️ Golden Rule: When in doubt about a token, verify the contract address from the project's official website or CoinGecko/CoinMarketCap before interacting.
Knowledge Check
Let's see how well you understand crypto token types.
What separates a native coin from a token?
Name two governance tokens:
Which standard is most common for fungible tokens on Ethereum?
What type of token is used for unique digital art (NFTs)?
Why is it critical to verify contract addresses?