3Web3 101
Part 3 · Assets · Chapter 08

Tokens, Coins, and Token Standards

A coin is the native currency of a blockchain. A token is an asset issued on top of a blockchain, usually through a smart contract.

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08. Tokens, Coins, and Token Standards

#One-Sentence Version

A coin is the native currency of a blockchain. A token is an asset issued on top of a blockchain, usually through a smart contract.

Both are often called "tokens" casually, but their origins are different.

#Coin vs Token

Coin Token
Issued by The blockchain protocol itself Anyone deploying a contract or using a token program
Examples BTC, ETH, SOL, BNB USDT, UNI, SHIB, PEPE
Main role Pay gas, secure the chain, staking Stablecoins, governance, points, memes, app assets
To create one Build or use a blockchain Deploy a contract or token program

Analogy:

A coin is like a country's native currency.
A token is like a gift card, membership card, or arcade token issued inside that country.

Ethereum is a chain. ETH is Ethereum's native coin. USDT, UNI, and meme tokens on Ethereum are tokens issued on Ethereum.

#What Is a Token Standard?

You may see terms such as ERC-20, ERC-721, ERC-1155, SPL, and BRC-20. These are token standards.

A token standard is an interface convention. It tells wallets, exchanges, and apps: "Tokens following this standard behave in these expected ways."

Common examples:

Standard Where Used For
ERC-20 Ethereum and EVM chains Fungible tokens such as USDT and UNI
ERC-721 Ethereum and EVM chains Non-fungible tokens, or NFTs
ERC-1155 Ethereum and EVM chains Both fungible and non-fungible assets, common in games
SPL Solana Solana token standard
BRC-20 Bitcoin ecosystem Experimental token structure on Bitcoin

Beginner shortcut: an ERC-20 token is usually a fungible token on Ethereum or an EVM-compatible chain.

#Fungible vs Non-Fungible

  • Fungible: each unit is interchangeable. 1 USDT is the same as another 1 USDT.
  • Non-fungible: each item is unique. NFT #1 and NFT #2 are different objects.

ERC-20 is fungible. ERC-721 is non-fungible. ERC-721 assets are what people usually call NFTs.

#Common Beginner Trap: Same Name, Different Chain

Anyone can issue a token on-chain. This creates a major beginner trap:

The same token name on different chains may refer to different assets or different versions of an asset.

Example: USDT exists on many networks:

  • USDT on Ethereum (ERC-20)
  • USDT on Tron (TRC-20)
  • USDT on BNB Chain (BEP-20)
  • USDT on Solana (SPL)

They all represent USDT issued by Tether and attempt to track 1 dollar, but they live on different networks.

If you withdraw from an exchange on the wrong network, several things can happen:

  • The exchange blocks the withdrawal because the address format is incompatible.
  • The asset arrives on a network the recipient does not support, making recovery difficult.
  • The recipient address is not yours, making recovery almost impossible.

So do not only ask "Is this USDT?" Ask: USDT on which network?

Even worse, scammers can issue fake tokens with the same name.

For example:

Real Ethereum USDT contract: 0xdAC17F958D2ee523a2206206994597C13D831ec7
A scammer can issue a token also named USDT with a completely different contract address.

Wallets may show token names by default. Names are not enough. Contract addresses matter.

Safety habits:

  1. Check the network when withdrawing or bridging.
  2. Check the contract address, not just the name. Use official websites, CoinGecko, or CoinMarketCap.
  3. Ignore unknown tokens that appear in your wallet.

#"A Weird Token Appeared in My Wallet. Can I Touch It?"

Usually, no.

Scammers often send dust tokens or scam airdrops with names such as Visit website to claim or Reward 1000 USDT.

Common tricks:

  1. Phishing website: the token name tells you to visit a scam site.
  2. Fake swap or approval: you try to sell it, but the signature approves real assets to an attacker.
  3. Wallet tracking: interacting with it helps link multiple wallets.

Correct response: treat it as invisible. Hide it in your wallet if possible. Do not sell, transfer, approve, or investigate out of curiosity.

#Token Types by Use

Type Purpose Examples
Stablecoins Track fiat prices and act as trading medium USDT, USDC, DAI
Governance tokens Voting rights in protocols UNI, AAVE
Exchange or platform tokens Ecosystem utility, fees, membership BNB, OKB
Meme coins Community culture and speculation DOGE, SHIB, PEPE
GameFi/SocialFi tokens Points or currency for apps Various
RWA tokens Tokenized real-world assets PAXG, tokenized Treasuries

The key question is: where does the token's value come from? Stablecoins depend on reserves or mechanisms. Governance tokens depend on protocol value and voting power. Meme coins depend mostly on attention and emotion.

#Quick Memory Table

Concept One-Sentence Version
Coin Native asset of a chain, used for gas and security.
Token Asset issued on a chain by a contract or token program.
ERC-20 Fungible token standard on Ethereum/EVM.
Same name, different chain Always verify network and contract.
Unknown wallet token Ignore it. Do not interact.

#What to Read Next

If you remember one sentence: Coins come from chains; tokens come from contracts or token programs. Always verify token, network, and address together.