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What is a token?

Imagine you're at a local fair. When you enter, you exchange your money for tokens, which you can then use to play games or buy food at the fair. These tokens are specific to the fair and can only be used to transact within the fair.

In the world of digital technology, blockchain tokens work similarly. A blockchain is like an online fair that operates on its own set of rules and has its currency - the tokens. These tokens can represent various things: they could be like arcade tokens (used for specific functions or services within that blockchain), or they can be like those food tickets (representing assets, like a virtual version of a stock or a piece of real estate).

The uniqueness of these tokens lies in the technology behind them. The blockchain acts as a secure, unchangeable ledger that tracks every token, ensuring that each one is unique and cannot be copied or counterfeited. This makes them very reliable and valuable for different digital transactions and applications.

There are three different types of tokens that can be created using Layer4:

  1. Fungible Tokens (ERC20) Read more about Fungible Tokens here.

  2. Non-Fungible Tokens (NFTs) (ERC721) Read more about Non-Fungible Tokens here.

  3. Multi-Standard Tokens (ERC1155) Read more about Multi-Standard here.