Connext №5. Token $NEXT. [ENG Version]

[<-Connext №4] [RUS Version] [Menu] [ENG Version] [Connext №6->]

After you've learned the basics and practiced using the bridge, it's time to move on to the Connext token, which has the ticker symbol $NEXT. But before we do that, let's remember what a token and a coin are and what they're for in the first place.

First of all, you need to understand what a token is and how it differs from a coin, and, spoiler alert, these are radically different things that should not be confused.

• A Сoin is an asset that has been created and operates on its own blockchain network. Coins themselves play a very important role, as they allow you to pay commissions, control the further path of the blockchain by voting, and provide security and decentralization of the network if the blockchain is built on a consensus PoS (Proof of Stake). As an example, $ETH is a native asset on the Ethereum blockchain.
• A Token is an asset created and operated on a third-party blockchain that does not have its own. They are used to provide services or certain rights within the platform itself, which releases them.

Everything is clear with coins. Their main function is to keep the blockchain running and secure, in other words, they are the fuel for a huge engine.

But what are tokens for and what function do they perform? Let's find out.

Tokens are classified by their functionality:

1. Security Token. A security token is issued for the purpose of denoting ownership of another asset.
   For example, you want to buy gold, but you don't really want to carry around heavy bullion. Instead, you can buy a token that tracks the price of gold. But there has to be a real asset behind the token.
2. Transaction token. This is a fast and easy way to transfer money.
   A great example of such a token is $USDC. USDC is pegged to the value of $1, allowing you to buy your morning coffee or transfer a large sum in seconds with minimal fees, even to another part of the planet.
3. Utility token. This type of token is intended for use within the platform itself. This token can be used both to buy goods or services and to interact with the platform.
4. Governance Token. Governance tokens allow their holders to vote for certain changes insede the platform, as well as for its future development path.
   For example, the Uniswap project's $UNI token allows token holders to vote for an increase in transaction fees. And if that decision gets the most votes, the change goes into action. Of course, the more tokens you have, the more weight your vote carries.

At the moment, there is not much information about the $NEXT token, but we will proceed from what we have.

NEXT is a Connext protocol token built on the Ethereum chain and combining utility and governance functions.

This token does not secure the protocol because the security burden is on the Ethereum blockchain on which their protocol is deployed.

The NEXT token is required for:

1. Router functionality. Routers will be able to bid with NEXT tokens to participate in the network and receive a share of the network in return, proportional to the funds placed. That is, the NEXT tokens that routers bid on act as a guarantee of their fair performance. If a router violates at least one rule of the Connext policy, its tokens will be reduced
2. Treasury Governance. The treasury of the Connext ecosystem will be governed through the DAO. In doing so, the community acts as the long-term arbiters of resource allocation in favor of the key players who will move the Connext network forward.

• Ticker: NEXT
• Standard: ERC20
• Total supply: 1,000,000,000 tokens
• Token address: 0xd63014F367aFe2eb006FD3dD6C02110A9dCE42dC

There is no official launch date yet, but approximately the token will be released within 1-2 months, according to the developers.

There is also no information about the distribution of the emission. But it is already known for sure that part of the coins will be distributed retrospectively to users and routers who actively used the network and kept it running. ( snapshots have already been taken)

But what is another way to get coins? That's what we'll talk about in the next lesson, so:

To be continued...

Prepared by blinkfeed#8312