What is a native blockchain token?

Native token is the fundamental cryptocurrency unit created directly within a specific blockchain. Unlike tokens based on existing networks, the native token functions as part of the built-in infrastructure of that blockchain and serves as its natural complement.

Main functions of the native token

Native tokens play many key roles in blockchain ecosystems. First, they serve as a means of payment for transaction fees, ensuring the proper operation of the network. Second, they enable protocol security through staking mechanisms, where validators and blockchain nodes earn rewards for maintaining security. Third, they give users voting rights in decentralized governance systems (DAO), allowing token holders to participate in important decisions regarding the future of the protocol.

Role in project funding

Native tokens have revolutionized the way blockchain projects are financed. Instead of traditional capital-raising methods such as issuing shares or bank loans, dev teams can issue their own native token and sell it on cryptocurrency markets. This approach democratizes access to funding and creates an engaged community of investors.

Practical examples

The history of blockchain provides many examples of proven native tokens. Ether (ETH) on the Ethereum network enables the execution of complex smart contracts and paying for computations. DOT on the Polkadot blockchain coordinates security across multiple parachains and facilitates communication between different networks.

These examples show how native tokens are an integral part of modern blockchain ecosystems. Their versatility has contributed to the rapid development of the entire cryptocurrency industry and forms the foundation for new technological possibilities and decentralized applications.

Importance for security and governance

Native tokens are not just financial instruments—they are tools that ensure the integrity and durability of entire networks. They represent a direct link between the technical security of the network and the economy of the ecosystem, creating a self-regulating system where all participants have a shared interest in the successful operation of the blockchain.