In the landscape of cryptocurrency, the word “Native Token” rarely appears when talking about different blockchain projects. A native token is a blockchain’s base token and facilitates the transaction process. Native tokens are popular by different names such as protocol token, built-in token, and intrinsic token, and also these tokens are entitled as the inherent digital currency of Blockchain.
Native Token
A native token is a primary digital asset developed and utilized exclusively on a special platform of blockchain and it is significant for blockchain operations. The native token mainly acts as a platform for exchange inside the network. Further, it serves a vital role in distinct activities of the blockchain ecosystem, such as the execution of smart contracts transaction processes and providing rewards to miners, users, and validators for securing the blockchain.
The “Non-Native token” is another relevant term that links to the native token, which is a type of cryptocurrency developed by a project for use only within its own borders. The difference between native and non-native tokens is that native tokens are made directly on their specific blockchain, while in the case of non-native tokens, they made medium built atop the blockchain.
The main feature that makes native coins relevant in the world of cryptocurrency is that they activate the transacting of multiple assets on Cardano, and the users can transact with ADA tokens and a limitless count of user-described tokens natively.
Additionally, the feature of native tokens elaborates the accounting infrastructure described in the ledger model to assist transactions utilizing a range of assets. Moreover, these assets involve ADA tokens and also different types of user-defined custom tokens.
Roles and Functions of Native Token
Native tokens are the cornerstone of the blockchain because they have a significant impact on its functionality and security purpose. Furthermore, it is utilized for rewarding validators and minors to pay transaction fees, and it also serves as security in the application of Decentralized Finance (DeFi).
Native tokens have a relevant role in the blockchain governance mechanism, where the token holders can be involved in the decision-making process that links to the development and variations of the network protocol.
Native tokens are utilized to implement the smart contracts operating on the platform of blockchain. Smart contracts are digital contracts protected on a blockchain that are automatically implemented where predetermined conditions and terms are accomplished.
Native tokens are provided as incentives to validators or miners who validate and process transactions in Proof of Stake (PoS) and Proof of Work (PoW) based blockchains. Further, this acts as a reward to maintain the integrity and security of the network. Hence, the native tokens can be called as blockchain’s economic backbone.
Examples of Native Token
Native tokens are cryptocurrencies created for specific blockchain networks, like BTC for Bitcoin or ETH for Ethereum, used for transactions, governance, and security.
Cardano (ADA)
ADA is the native token of the Cardano network, and Cardano is a blockchain platform that utilizes Proof Of Stake to assist smart contracts and activates the developments in the decentralized application, tokens, and more. ADA is a digital currency used for the secure exchange of value without the necessity of a third party.
At the time of writing, the value of Cardano is $0.750549.
Binance (BNB)
Binance Networks’ native token is BNB. Based on the daily trading volume, Binance is the highest cryptocurrency exchange globally. Users can attain rewards as discount fees in the Binance exchange, and BNB can utilized for trading for other cryptocurrencies such as Litecoin, Bitcoin, etc.
At the time of writing, the value of Binance is $648.88.
Solana (SOL)
Solana Networks’ native token is SOL. Solana network is examined by numerous nodes that function independently of each other by ensuring that the data is sustained secure, and censorship-resistant. SOL is used for staking and to pay transaction fees.
At the time of writing, the value of Solana is $165.67.
Bitcoin (BTC)
Bitcoin Networks’ native token is BTC, and it is a virtual currency (cryptocurrency) that is used instead of money and eliminates the necessity of trusted third-party participation in the financial system. BTC is a form of digital investment and is utilized in transaction payment.
At the time of writing, the value of Bitcoin is $95,632.29.
Ethereum (ETH)
ETH, known as Ether, is the native token of the Ethereum network. It is a decentralized international software platform owned by blockchain technology. ETH acts as security by network validators and is also used for transaction payment.
The value of Ethereum at the time of writing is $2,679.85.
Litecoin (LTC)
Litecoin Networks’ native token is LTC, and it is a cryptocurrency that activates sudden payments to anyone in the world and can be effectively mined with consumer-grade hardware. LTC is broadly used for securely storing value and payment processes.
At the time of writing, the value of Litecoin is $130.72.
The conclusion
The native token empowers an extensive range of applications inside the blockchain ecosystem, and they are utilized for daily transactions and paying for smart contract implications. The native token acts as the primary cryptocurrency for governance, transactions, and attaining certain features in the Decentralized application. Similarly, these tokens enable trading, borrowing, and lending without intermediates in the Decentralized Finance. The countless features of Native tokens make them more special in the cryptocurrency market.
