A Native Token is the primary cryptocurrency inherent to a specific blockchain network, serving as its fundamental unit of account and typically used to pay for transaction fees, secure the network through staking or mining, and facilitate governance. Examples include Ether on Ethereum or Bitcoin on the Bitcoin blockchain.
Mechanism
The Native Token functions as the economic incentive layer for network participants, compensating validators for processing transactions and maintaining network integrity. Its issuance and distribution are governed by the protocol’s consensus mechanism, and its utility is directly tied to the operational capacity and security of its underlying blockchain.
Methodology
The strategic significance of a Native Token extends to its role in attracting development, decentralizing control, and aligning participant incentives within its ecosystem. For institutional investors, understanding its utility, tokenomics, and demand drivers is crucial for assessing the long-term viability and investment potential of the associated blockchain platform, impacting valuation and risk assessment.
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