4. Cryptocurrencies and Tradable Crypto-Tokens

In the previous chapters, we put forward the notion of the blockchain-based ecosystem as a new organizational paradigm of economic activity. In that context we explained tokens as having three roles: first, to enable price discovery, execution of transactions, and storage of value for later consumption; second, to capture the economic substance of assets represented (values “in being”) and services exchanged (values “in action”); and third, to incentivize active participation in governance tasks so as to safeguard the value of network effects. The rapid evolution of blockchain-based token ecosystems has created a rich universe of tokens, across distinct use cases and through various constellations of underlying property rights. In the current chapter, we propose a comprehensive taxonomy that captures most of the use-case/property rights combinations currently observed. We explain the salient features of each token type, resp. subtype; and give concrete examples of each, with references to their respective ecosystem’s documentation. In the process we explaine fundamental legal and operational considerations that need to drive token analysis and design.