Types of Tokens
- Usage / utility tokens
- Equity tokens
- Work tokens
- Community tokens
- Asset tokens
These tokens give the holder future access to a service or a product provided by the organization that issued them. One example of usage tokens is filecoin, used by the holders to access a service, which is the storage of their personal files by the network. The organization purpose is to give broad access to internet, specially to the ones locked out of the internet.
Equity tokens are similar to securities because they represent the ownership of an asset, such as organization's profit sharing, voting rights, debts owned by the company. Through blockchain technology a company could issue ICO instead of Initial Public Offering. This is possible through smart contracts. An example of equity token is the Blockchain Capital when the ICOs were issued. After being financed, Blockchain Capital is a venture capital firm that invests in Blockchain enabled companies. It's important to notice, however, that the token will less likely be considered a security if the voting right allows the holder to participate significantly in the decisions that will affect the organization, or if the holder can contribute with her expertise to the success of the organization. That is because one of the characteristics of securities is the reliance of the investor in others' efforts to earn profits.
The users buy work tokens so they are able to contribute with their own work for a decentralized autonomous organization and earn some revenue in exchange. One example is Augur, a decentralized forecasting market that issued REP token and share a portion of its market fees with users that report determinate outcomes. It can be also known as reputation/reward tokens.
The only known purpose of this token is for the organization to enact monetary policy. This kind of token can be better understandable with a practical example. The Steem platform issues SMT tokens so users can upvote content that they like by giving those tokens as rewards to the author of that content. The author can then exchange those tokens in an exchange platform for other cryptocurrencies or even fiat currency.
finally, the asset tokens are basically tokens backed by a real-life asset, such as a fiat currency for example. The Tether currency, for example, is backed 1-to-1 by USD, so one Tether - USDT represents one Dollar- USD.
Token Sale Models
- Fixed exchange rate
- Dutch auction
- Hybrid capped sales
Through this model, the number of tokens received per unit of fiat currency could decrease over time for later buyers. The intent of this model is to reward early buyers.
In the dutch auction, the bidders (potential buyers) will each set a maximum price and the quantity they are willing to buy. Then, the bids are all sorted from highest to lowest. The highest ones will be accepted until the total of desired quantities is enough to sell all tokens that the organization is willing to offer. Therefore, not all bidders will necessarily be able to buy the tokens.
Finally, in the hybrid capped sales, the company will set a hard and a soft cap to be achieved. Once the soft cap is achieved, a time limit will be set to sell the remaining token, as long as it doesn't surpass the hard cap.