The Three Token Models of Web3 Applications

On April 15th, at the main event of the 2023 Hong Kong Web3 Carnival, titled “The Future of Tokenization”, Xiao Feng, Chairman of Wanxiang Blockchain and Chairman of HashKey Group, delivered a closing keynote speech titled “The Three Token Models of Web3 Applications”. He stated that Web3 applications must meet various needs, and the token models at the Web3 application level and the basic protocol are different. The basic protocol is a single token model, The world should be unified, and the application protocol is a three token model with unique application scenarios. Among the three token models, the first is NFT (data, product, and service value), the second is functional token (usage value), and the third is securities token (ownership value, also known as equity value).

Xiao Feng: The Web3 application layer three token models include NFT, functional token, and securities token

On April 15th, at the main event of the 2023 Hong Kong Web3 Carnival, titled “The Future of Tokenization”, Xiao Feng, Chairman of Wanxiang Blockchain and Chairman of HashKey Group, delivered a closing keynote speech titled “The Three Token Models of Web3 Applications”. He stated that Web3 applications must meet various needs, and the token models at the Web3 application level and the basic protocol are different. The basic protocol is a single token model, The world should be unified, and the application protocol is a three token model with unique application scenarios. Among the three token models, the first is NFT (data, product, and service value), the second is functional token (usage value), and the third is securities token (ownership value, also known as equity value).

Introduction

Web3 applications are decentralized applications that function on blockchain technology. These applications are designed to provide an alternative to centralized platforms by providing security, transparency, and user control to its users. With the growing popularity of Web3 applications, it is essential to understand the different token models used by these applications. In this article, we will discuss the three token models of Web3 applications, as described by Xiao Feng in his keynote speech.

The Different Token Models of Web3 Applications

Basic Protocol Token Model

The basic protocol token model is a single token model that is used to operate the underlying blockchain protocol. This token is used for creating new blocks, validating transactions, and paying transaction fees. This model is essential for creating a unified world where all transaction fees are paid in a single token, and the value of the token is directly tied to the value of the underlying blockchain protocol.

Application Protocol Token Model

The application protocol token model, on the other hand, is a three-token model that is used to operate Web3 applications. These tokens have unique application scenarios that meet different needs of the users.
1. NFTs – Non-Fungible Tokens
NFTs are tokens that represent unique digital assets. These assets could be digital art, collectibles, or intellectual property. NFTs have value based on the data, product, or service they represent. The unique nature of NFTs makes them valuable to creators, collectors, and investors, as they can represent exclusive ownership of specific digital assets.
2. Functional Tokens
Functional tokens are tokens that have specific use cases within a Web3 application. These tokens are used for accessing certain features or functionalities within the application. Functional tokens have value based on their usage and utility, making them valuable to users who require access to specific features within the application.
3. Securities Tokens
Securities tokens, also known as equity tokens, represent ownership of an underlying asset or company. These tokens are typically regulated by government securities laws, and their value is tied directly to the performance of the underlying asset or company. Securities tokens are valuable to investors who want to own a piece of the underlying asset or company to benefit from its potential future success.

Conclusion

In conclusion, Web3 applications have different token models that meet various needs of the users. The basic protocol token model creates a unified world where all transactions are paid in a single token. The application protocol token model utilizes NFTs, functional tokens, and securities tokens to meet the unique needs of users within the application. As Web3 applications continue to grow and evolve, understanding the different token models used by these applications will become increasingly important.

FAQ

1. What is the difference between the basic protocol token model and the application protocol token model?
The basic protocol token model is a single token model used to operate the underlying blockchain protocol, while the application protocol token model is a three-token model used to operate Web3 applications.
2. What are NFTs?
NFTs are non-fungible tokens that represent unique digital assets, such as digital art, collectibles, or intellectual property.
3. What are securities tokens?
Securities tokens, also known as equity tokens, represent ownership of an underlying asset or company and are regulated by government securities laws.