Recently, a friend asked me what the difference really is between Tokens and Coins, and I realized many people just don’t understand clearly. Honestly, in the early days, everyone called Coins “币” in Chinese, like Bitcoin, Litecoin, Dogecoin—all of these. Later, with Ethereum’s emergence, Token and Coin started being used interchangeably, and both were translated as “Tokens,” which confused a lot of people.

Let’s first talk about what a Token is. Simply put, a Token is an asset built on someone else’s blockchain. It represents some kind of rights or certificates that can be traded, transferred, or exchanged. After Ethereum launched the ERC-20 standard in 2015, anyone could issue Tokens, so now there are many types—DeFi, Layer-2, NFT tokens all count.

What about Coin? In Chinese, Coin is called “幣,” and the fundamental difference is that a Coin has its own blockchain. Bitcoin runs on the Bitcoin blockchain, and Ether runs on Ethereum; they are native assets. Tokens are different—they depend on existing blockchain ecosystems and do not have their own chain.

From a trading perspective, buying and selling Coins is basically asset transfer—sending coins from address A to address B on the chain. But buying and selling Tokens essentially involves calling smart contracts, triggering transfer functions behind the scenes, so Gas fees are often higher.

Tokens can be divided into three categories. Payment Tokens are mainly used for payments; stablecoins are a typical example. Functional Tokens provide access to applications; most ERC-20 tokens on Ethereum fall into this category. Asset Tokens are like stocks, representing a share in a project, but be aware that in crypto, they usually don’t confer actual ownership or dividend rights.

In reality, a Token can have multiple attributes at once, so there’s sometimes a disconnect between theory and practice.

From an investment perspective, Tokens and Coins each have their advantages. Coins solve infrastructure issues, while Tokens offer various applications and services. Tokens are more scalable and easier to implement new ideas. For example, MakerDAO can launch RWA (Real-World Asset) businesses at any time. But note that Tokens tend to be much more volatile than Coins; the price swings of UNI, SNX, MKR are much larger than BTC and ETH, especially during bull markets. This creates opportunities for short-term traders but also entails greater risks.

There are two ways to trade Tokens. The first is spot trading—buying and selling actual assets. For example, if UNI is currently $3, you buy one for $3. Be careful of fake tokens; some teams issue tokens with the same name to confuse users. Always verify the contract address on the official website or blockchain explorer.

The second is margin trading, which involves trading price differences without actually holding the tokens. It’s more suitable for pure speculation. This method is convenient and can avoid fake tokens, but leverage should be controlled—preferably no more than 10x, because Tokens are highly volatile, and new tokens are especially prone to liquidation.

In practice, choosing a secure and regulated platform is most important. For Token trading, first log in to the platform, search for the token you want to trade, then place an order in the appropriate section, filling in the amount, leverage, stop-loss, and take-profit. Beginners can start with a demo account to practice risk-free and get familiar with the process.

In summary, Coins (幣) are native assets with their own chains, while Tokens are application assets built on other chains. Both are important and indispensable. Tokens offer more opportunities but also come with higher risks, requiring more cautious risk management.