How Token Holders' Structure Could Impact Trading?
The world of CryptoCurrency is mainly divided into tokens and coins. Both Centralized (CEX, eg. Coinbase) and Decentralized Crypto Exchanges (DEX -es) permit their trade. Currently, Cross-Chain marketing is making it possible to trade an Ethereum based asset on a foreign blockchain. Among all these, how is the structure of Crypto Token Holders impacting the trade? Let's find out.
Token holders' structure is mainly making it possible to buy and sell blockchain versions of traditional financial assets. As a result, the trading of such assets is showing a trend shift towards the digital world.
Keep reading the following article to understand more about the subject. And if this kindles your interest be sure to check out Wealth Strategies' Seminars.
How Tokens Differ From Coins
Tokens and coins are both forms of CryptoCurrency. But although all coins are some form of token, all crypto tokens are not crypto coins. And this confuses many individuals. So, before getting to how the different kinds of Crypto Token Holders can impact trading, it's important to clear up the difference.
One of the main properties of a token is its ability to use foreign blockchains. Whereas, crypto coins are often exclusively native to the blockchain they are based on. And this is what gives token its advantage DEX -es and in Cross-Chain Market Making.
Another significant difference lies in how people exchange both forms of cryptocurrency. For instance, all coins hold the same agreed-upon value which has a fixed translation in fiat currency. And therefore their use is more like money.
On the other hand, tokens are assets. Therefore, they have a status similar to bonds, stocks, artworks, and such. This is also why the trade of tokens depends on smart contracts. Whereas, crypto coin transactions happen directly on the blockchain.
However, that doesn't mean the two forms of CryptoCurrency need different kinds of exchanges. For example, well-known Crypto Exchanges, such as Coinbase used to permit the trade of both tokens and coins. Okay, now let's see how different types of Crypto Token Holders impact the trade.
The Impact Of Token Holder’s Structures OnTrading
Tokens come in all forms. Some of them are just promotional offers. Or more like store credit kind of stuff. Meanwhile, others have more serious financial structures. Therefore, although there are many types of existing and emerging crypto-tokens, all tokens can be broadly classified into utility tokens and security tokens.
In the crypto world investments are done mainly in security tokens. That's because they have similar structures to traditional financial assets. Such as bonds and stocks. On the other hand, utility tokens are usually offered by different platforms for mainly promotional reasons. Therefore, they are not necessarily investments.
Usually, the holder of the security token owns a share in the company who issued the token. In turn, the company is getting investors for its long-term growth. In other words, they are the blockchain version of owning a small portion of a company by buying its share. And these tokens are also regulated as such. Hence the name Security tokens.
This kind of status is unprecedented for a crypto token. As a result, they are having new impacts on the blockchain company. For instance, a crypto token holder of this kind will have the right to influence the business decisions of the issuing company.
Common Structures of Security token and their impact
Security tokens exist in mainly four types of structure. Such as, Tokenized VC funds, Equity tokens, Asset-backed tokens, and Bond-like tokens or Debt tokens.
However, unlike their traditional counterparts, tokenized VC funds don't lock down the investor's money for a long time. Instead, these tokens have immediate liquidity. Thanks to Decentralized Crypto Exchanges (DEX -es) and Cross-Chain Marketing technologies.
We all know how Warren Buffet made his riches. Whenever he sensed potential in a budding company, he bought their shares. Now, the same is possible with crypto trading. Here, these share-like tokens are known as equity tokens.
If you think there is some possibility of future success in a company that is offering equity tokens, you can buy them as a long-term profitable investment.
However, it is blockchain technology. Therefore, equity shares come with some advantages that traditional shares don't. Such as more liquidity, flexibility, and compliance with automation.
Another interesting application of blockchain is asset-based tokens. Here a token is present on the blockchain, relying on the existence of an asset in real life. This can be real estate or anything else that people consider a worthy property.
In other words, you turn a real-world property into a blockchain entity and divide it into token units. Here, the crypto token holders will own various parts of the asset.
Lastly, there's the Debt token. These are crypto bonds that give the holder the right to earn from the future revenues streams of the issuing company. In other words, the company is in debt to the token holder.
The main impact of these debt token holders' structure is cutting out the middlemen and decreasing different common risks encountered in the traditional market.
Overall, the impact of security tokens in trading is that it makes the transactions more transparent. Plus, being blockchain operations, they are quicker and favors advanced degrees of automation.
Learn More About Crypto Investment
The world of CryptoCurrency is very new. At the same time, it is rapidly changing. New concepts and ideas are introduced every day. For example, how are DEX -es different Crypto Exchanges like Coinbase. Or, how is Cross-Chain Market Making going to change decentralized finance?
Well, reading articles on the web is one way to get information. But that is not of course the best way. Because eighty percent of these articles are just clever spin-offs of those remaining ten to twenty percent content. Therefore, the best way to gain your knowledge is through authentic Seminars.
Wealth Strategies Seminar on CryptoCurrency and other important sectors of finance can be a great option for you. Here, you will gain true knowledge and insights from real experts who are actively working in the field. So, don’t wait and get your booking now.
The existing and emerging structures of crypto token holders are changing how we trade. In addition, technologies like DEX and Cross-Chain Market making are working towards establishing Crypto Exchanges that permit more freedom and Areless regulated.
As an aspiring investor, you must keep up to date with these concepts. And wealth strategies Seminars can surely help you in that regard.