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A Summary of

Token classification framework

by
Thomas Euler
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Understanding of different token types is limited even among regular investors. This is because there is a lack of clearly defined terminology.

The Untitled INC team developed a framework (Token Classification Framework, or TCF) that:

  1. Reflects various exiting token types
  2. Allows to classify & analyze tokens in various relevant dimensions
  3. Fosters a better, nuanced understanding of crypto tokens

Classifying Tokens in 5 Dimensions

  1. Purpose
    1. Cryptocurrencies, network tokens, investment tokens
  2. Utility
    1. Usage tokens, work tokens, hybrid tokens
  3. Legal status
    1. Utility tokens, security tokens, cryptocurrencies
  4. Underlying value
    1. Asset-backed tokens, network value tokens, share-like tokens
  5. Technical layer
    1. Blockchain-Native tokens, non-native tokens, (d)App tokens Two potential dimensions that were ultimately not included are the Issuance Approach & Supply Structure.

Archetypes

After using this classification framework, patterns emerge, forming archetypes: 1. Cryptocurrency 2. Tokenized Asset 3. Tokenized Platform 4. Token-as-a-share

The Wider Context

Despite TCF's usefulness, it isn't enough to merely analyze a token. In any DLT system, there are three layers: governance, token & technology.

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