Recently, many people have been discussing the difference between Tokens and Coins, and this is actually a very good question. In the early days of cryptocurrency, there were indeed only concepts like Bitcoin, Litecoin, Dogecoin—these are Coins. It wasn't until Ethereum appeared that Tokens started to emerge in large numbers, which has now confused many new investors.

Let's start with the simplest way to understand: Coins have their own independent blockchain, while Tokens are built on someone else's blockchain. Bitcoin runs on the Bitcoin blockchain, and Ether runs on Ethereum; these are the native assets of their respective networks. USDT, UNI, and others are Tokens—they don't have their own blockchain but are built on existing ecosystems.

Tokens are essentially digital assets representing specific rights or interests, and they can be traded, transferred, or exchanged. After Ethereum launched the ERC-20 standard in 2015, anyone could issue their own Token on it, which is why the number of Tokens now far exceeds Coins. In Chinese, we usually translate Tokens as access passes, tokens, or coins—similar to bank tokens—representing some kind of authority or asset certificate.

According to classifications by Swiss financial regulators, Tokens are mainly divided into three types. Payment Tokens are used for secure and efficient payments; stablecoins are typical representatives. Utility Tokens provide access to applications; most ERC-20 tokens on Ethereum belong to this category. Asset-backed Tokens represent some rights of a project, somewhat like stocks, but it’s important to note that holding such Tokens usually does not mean owning the project or receiving dividends.

In practice, a Token often has multiple attributes at the same time, making it difficult to strictly categorize.

Compared to Coins, Tokens also differ in how they are traded. Buying and selling Coins is more like transferring assets—you directly send from address A to address B on the blockchain, which is the most basic accounting function. Buying and selling Tokens, on the other hand, essentially involves calling smart contracts—for example, transferring USDT triggers the transfer function inside the Ethereum smart contract, which usually consumes more resources and has higher Gas fees.

So, is it better to invest in Tokens or Coins? Actually, both have their advantages. Coins mainly solve infrastructure issues, while Tokens are built on top of that infrastructure to develop various applications and services. The value of Coins is relatively fixed; if they fail, there’s little room for recovery—examples include Quantum Chain and Bifurcation Chain. Tokens are more flexible, allowing the launch of different services or products; MakerDAO’s RWA business is a good example.

Another obvious feature is that Tokens tend to be more volatile than Coins. The fluctuations of UNI, SNX, MKR often surpass BTC and ETH, especially during bull markets. This creates more opportunities for short-term traders but also entails greater risks.

If you want to trade Tokens, there are mainly two ways. Spot trading involves directly buying and owning Tokens—for example, buying a UNI at $3 means you truly own that token. Be cautious of fake tokens—some teams issue tokens with the same name but worthless to confuse investors, so always verify the contract address on the official website or blockchain explorer.

The other method is margin trading, mainly for price arbitrage—no need to actually hold the tokens. It’s simpler to operate and can avoid fake tokens, making it more suitable for traders who only want to speculate on price movements. However, remember that due to the high volatility of Tokens, you must control your position size and leverage—preferably not exceeding 10x—to avoid liquidation risks.

Regardless of which trading method you choose, the most important thing is to select a secure and regulated trading platform. Many platforms now support Token trading, and the process is similar—search for the token, set buy/sell orders, fill in parameters like quantity, leverage, stop-loss, take-profit, then confirm and place the order. Beginners can start with demo accounts to experience the process risk-free.