Smart Contract Token
Asset Type
Programmable Token Issued by Smart Contract ÔÇö Smart Contract Token
A smart contract token is a digital asset created and managed by a smart contract on top of an existing blockchain. These tokens are not built into the base protocol (unlike native assets), but instead rely on programmable logic deployed by developers. Smart contract tokens can represent anythingÔÇöfrom DeFi utility tokens to stablecoins, governance tokens, or NFTs.
Use Case: Smart contract tokens allow developers to launch programmable assets for dApps, DAOs, or financial products without building a new blockchain.
Key Concepts:
- ERC-20 ÔÇö The most widely used smart contract token standard on Ethereum.
- XRPL Issued Asset ÔÇö Custom assets on the XRP Ledger, governed by smart contract logic.
- Token Standards ÔÇö Protocol rules for creating and managing smart contract tokens (ERC-20, SPL, BEP-20, etc.).
- Fungibility ÔÇö Whether tokens are interchangeable or unique.
- Custom Minting ÔÇö Ability to programmatically issue or burn new tokens based on smart contract rules.
Summary: Smart contract tokens are programmable, flexible digital assets powered by blockchain logic. They enable a wide range of use cases, from DeFi and payments to governance and NFTs, and follow standards that make them interoperable across apps and networks.
Examples of Smart Contract Tokens:
- $USDC ÔÇö A stablecoin issued via smart contracts on Ethereum, Solana, and others
- $XCN ÔÇö ChainÔÇÖs utility token deployed as an ERC-20 on Ethereum
- $BAD ÔÇö A meme token issued on the XRP Ledger
- $VEE ÔÇö Metadata-driven asset issued via smart contract on Ethereum
- $ACH ÔÇö Payment token for Alchemy Pay, deployed via smart contract
Key Difference from Native Assets:
- Native assets are protocol-level (e.g., $ETH on Ethereum)
- Smart contract tokens are deployed by users or projects on top of a Layer 1 (e.g., $USDC on Ethereum)
- Smart contract tokens must follow token standards like ERC-20, XRPL IOUs, SPL, or BEP-20