The Role and Purpose of Tokens in ICOs

The total number of tokens will be generated at this stage.
The number of tokens to be generated for pre-sales and general
sales should be stipulated.

What does your Token do?

A token  in an ICO is a proof of ownership interest of an enterprise.

It can also be referred to as a type of  privately issued currency. A token usually

appreciates when the creation of a cryptocurrency is successful, i.e when the

value of the token increases, the early investors/users will benefit more from

its increase because of this, we can see tokens as a form of investment.

Tokens are considered equivalent to shares in an IPO (Initial Public Offering:

when a company sells some of its shares to investors who in turn sell it

to the general public).

The Roles of a Token

An investor or buyer who owns a token can be given right or easy access to the product.
It also bestows the right of product usage and exchange.

A token is a unit of a currency that can be used in value exchange
e.g. giving out some ethereum coins in exchange for bitcoins. This is a perfect
example of an exchange between buyers and sellers which allows users of
a token earn value from it.

Tokens are used as a form of incentive, if it is given in return or used
to make transactions.

The token is a very effective method of payment and conducting
transactions. It enables a less time-consuming and frictionless way of transactions.

The Purpose of a Token

A token enriches a user’s experience, which includes joining a network
and/or connecting with other users of the token.

The creation of a new economy is one of the most important results,
which must be maintained over time to prevent a loss.

Because a token is based on blockchain models, it enables an equitable
redistribution among users.

Features of a Token

1. It gives a buyer a proof of ownership
2. It allows a buyer to join a network
3. It is used as an incentive to users.
4. Has  a payment unit and transaction unit
5. It allows profit sharing, benefit sharing and inflation benefits.
6. It gives product access and ownership.

The ERC-20 token structure

The ERC-20 token (Ethereum token structure), developed  in 2015, came

about as an attempt to provide a mutual set of characteristics and features for

token contracts used in Ethereum. It was created to allow developers, program

new tokens within the Ethereum structure. This token structure now serves as

the basis for tokens released through  Initial Coin Offerings.