What are protocol tokens?

Instead of key metrics, he assigns each Protocol Token a single NAICS classification that reflects the specific industry of its main economic activity. Protocol Tokens are the second of the two main categories that structure the four types of crypto assets. Put simply, Protocol Tokens are a bit like vouchers.

What are Defi tokens?

DeFi tokens A new world of cryptocurrency-based protocols that aim to reproduce traditional financial-system functions (lending and saving, insurance, trading) has emerged in recent years. These protocols issue tokens that perform a wide variety of functions but can also be traded or held like any other cryptocurrency.

What is an example of a protocol?

For example, Bitcoin and Ethereum are such protocols, and various apps are built upon them. And due to the coupled nature of protocol tokens and the services, the value of the protocol is expected to increase with adoption. And this might also reflect in the price of each protocol token in the future. (This is Metcalfe’s law)

What is a protocol in cryptocurrencies?

What is a protocol? Protocols are basic sets of rules that allow data to be shared between computers. For cryptocurrencies, they establish the structure of the blockchain — the distributed database that allows digital money to be securely exchanged on the internet.