The cryptocurrency market is developing as numerous new projects emerge. They issue their tokens that allow becoming early investors, in-game tokens, NFTs, etc. There are some variations of cryptocurrency, and we will try to figure them out in this article.
Depending on the application cases and other factors, we came up with types of cryptocurrency in the world:
- Liquidity tokens
- Payment tokens
- Non-fungible tokens
- Security tokens
- Exchange tokens.
Let’s consider these types of cryptocurrencies in detail.
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LP is a token of liquidity providers. They serve as confirmation of the user’s share in the general pool. For example, you enter the pool with 100 USDT and 0.1 ETH. A decentralized exchange (DEX) contract mints, for example, 10 LP tokens, for you. Their number is generated according to a given proportion and serves as proof of your share in a particular pool.
You can withdraw your share at any time, deducting the non-permanent losses resulting from a change in the proportion of two tokens in the pool (for example, a drop or rise of ETH).
Almost all digital assets belong to this category. Such tokens are used as payment means in and out their platforms. You can buy goods with such tokens.
NFT (non-fungible tokens)
One of the most popular crypto coins to buy lately is NFT. Every token is unique and is a digital certificate that proves the ownership of some unique object, whether it is a picture, song, or document both in digital and physical form.
The price of such tokens is formed by external assets such as bonds, stocks, real estates, etc.
Tokens are designed as native cryptocurrency to crypto exchanges like Binance Coin for Binance, etc.If you are interested in trading, try the WhiteBIT crypto platform. It offers over 400 crypto pairs as well as pairs with fiat currencies.