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The Three Token Models of Web3 Applications: Understanding the Future of Tokenization

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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,

The Three Token Models of Web3 Applications: Understanding the Future of Tokenization

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

As the digital world evolves and decentralization becomes mainstream, it is important to understand the role of tokenization in the Web3 ecosystem. Tokenization involves the creation of digital assets on a blockchain, enabling users to have ownership and control over them. On April 15th, at the 2023 Hong Kong Web3 Carnival, Xiao Feng delivered a keynote speech titled “The Three Token Models of Web 3 Applications”. In this speech, he discussed the importance of these models and how they are different from one another.

Outline

I. Introduction
A. Explanation of the importance of tokenization in Web3
II. The Single Token Model and the Basic Protocol
A. Explanation of the Single Token Model
III. The Three Token Models of Web3 Applications
A. NFTs
1. Definition and Explanation of NFTs
2. Examples of NFTs
B. Functional Tokens
1. Definition and Explanation of Functional Tokens
2. Examples of Functional Tokens
C. Securities Tokens
1. Definition and Explanation of Securities Tokens
2. Examples of Securities Tokens
IV. Conclusion
V. FAQs

The Three Token Models of Web3 Applications

In his keynote speech, Xiao Feng emphasized that Web3 applications should serve various needs and that the token models at the Web3 application level and the basic protocol are different. The basic protocol, which is a single token model, is meant to be unified, while the application protocol uses a three token model with unique application scenarios.

NFTs

The first token model that Xiao Feng discussed is NFTs or non-fungible tokens. These tokens are unique digital assets that are stored on a blockchain, allowing users to prove ownership over them. NFTs can represent a variety of things such as data, product, and service value.
One popular example of an NFT is CryptoKitties, a game where users can buy and sell digital cats. Each cat is unique and has its own attributes, making them valuable to owners. Another example is NBA Top Shot, where users can buy and sell NFTs of NBA highlights.

Functional Tokens

The second token model is functional tokens. These tokens have a specific purpose within a Web3 application, providing users with usage value. You cannot trade functional tokens for anything else, as they are not meant to be investments.
For example, Golem Network Token (GNT) provides users with computational power on the Golem Network, which is a decentralized platform for computing. Another example of a functional token is Basic Attention Token (BAT) which is used to pay for advertisements on the Brave web browser.

Securities Tokens

The third and final token model that Xiao Feng discussed is securities tokens. These tokens represent ownership value, also known as equity value. Securities tokens are essentially digital versions of securities such as stocks or bonds.
One example of securities tokens is tZero, which is a trading platform for digital securities. Another example is tokenized real estate, where users can buy and sell tokens that represent ownership in real estate properties.

Conclusion

Tokenization plays a significant role in the future of Web3 applications and is essential to the success of decentralized platforms. Understanding the different token models, including NFTs, functional tokens, and securities tokens, will be key to unlocking the potential of Web3.

FAQs

1. Are NFTs only used for digital art and collectibles?
No, NFTs can represent a variety of things such as data, product, and service value.

2. Can functional tokens be traded for other cryptocurrencies?
No, functional tokens are not meant to be investments and can only be used within the Web3 application it is designed for.

3. What is the difference between a securities token and a traditional security?
Securities tokens are digital versions of securities, making them accessible to a wider range of investors and providing a more streamlined and efficient trading process.

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