Coins and tokens are both crypto assets, but coins run on their own blockchain while tokens live on top of someone else’s blockchain and usually represent a specific project or use case.[1]
- A coin is the native asset of its own blockchain and is used to pay transaction fees and secure the network (e.g., BTC on Bitcoin, ETH on Ethereum, BNB on BNB Chain).[1]
- Creating a coin means building and maintaining a full blockchain infrastructure, like buying and maintaining your own gym equipment or car instead of using someone else’s.[1]
Example:
- Bitcoin (BTC): Native coin of the Bitcoin blockchain, used mainly as digital money and store of value.
- Ether (ETH): Native coin of Ethereum, used to pay gas fees and secure the network.
- BNB: Native coin of BNB Chain, used for fees, staking, and ecosystem activities.
- A token is created on an existing blockchain (ERC‑20 on Ethereum, BEP‑20 on BNB Chain, etc.) and depends on that chain for security, consensus, and transaction processing.[1]
- Tokens usually have a narrower, project‑specific role: DEX tokens like UNI for governance/fees, meme tokens like SHIB, in‑app or platform tokens, stablecoins like USDT, and so on.[1]
- Infrastructure: Coins = own chain; tokens = hosted on a coin’s chain and inherit its rules and capabilities.[1]
- Purpose: Coins tend to be more general (money, gas, store of value), while tokens are tailored to particular apps, protocols, or business models (governance, rewards, utilities, stable value).[1]
Token examples on Ethereum
- UNI (Uniswap): Governance and utility token for the Uniswap DEX, used for voting and sometimes incentives.
- USDT / USDC: Stablecoin tokens representing 1 USD each, issued as ERC‑20 tokens on Ethereum.
- BAT (Basic Attention Token): Utility token for the Brave browser advertising ecosystem.
Token examples on other chains
- CAKE (PancakeSwap on BNB Chain): DEX token used for rewards, farming, and governance.
- Chainlink (LINK): Oracle network token, used to pay node operators and secure oracle services; commonly issued as an ERC‑20 token.
- MATIC (Polygon token on Ethereum): Originally an ERC‑20 token representing the Polygon network’s asset; used for fees and staking on Polygon’s own chain.
- Tech and cost: Using an existing chain (token) is easier and cheaper for teams than launching a new L1 coin and blockchain.[1]
- User impact: For most traders/investors, the project’s fundamentals matter more than whether it is technically a coin or token, though network choice affects fees, speed, and risk model.[1]