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What is a token?
A token is a digital asset created by a smart contract (a program) on an existing blockchain, rather than being the chain's own native coin. Tokens can stand for many things: points in a game, a share in a project, a dollar balance or an ounce of gold.
What it means for you
Anyone can deploy a token contract, so a token's name and ticker prove nothing; two different tokens can share the same name. Check the contract address, and expect that moving a token still costs a fee in the chain's native coin.
How it works
A token is a ledger kept inside a smart contract. Under the ERC-20 standard, the contract records each address's balance and exposes the same functions: balanceOf, transfer, totalSupply and decimals, plus approve and allowance, which let another address move up to a set amount on the owner's behalf through transferFrom. Each move emits a Transfer event that wallets and explorers read. Because the balances live in the contract, what a token can do is defined by its code, not its name, and moving it is a contract call whose fee is paid in the chain's native coin.
Sources: ethereum.org: ERC-20 token standard, ethereum.org: Glossary · checked 4 October 2026
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