What it means
A unit of value recorded on a blockchain, which can stand for money, a vote, a share of a pool or anything else.
Stablecoins are tokens, and so are the receipts you get when you deposit into a vault.
How it works
A token's value depends entirely on what backs it.
Related terms
| Term | What it means |
|---|---|
| ERC-20 | The standard format for tokens on Ethereum and networks like Base, so any wallet can hold and send them. |
| Stablecoin | A token on a blockchain designed to keep a steady value, usually one dollar or one euro, backed by reserves. |
| Governance token | A token that gives its holders a vote on how a protocol is run. |
This glossary explains terms in general. It isn't investment, tax or legal advice.