Tokenization
Last updated
Last updated
Blockchain technology has emerged as a critical facilitator for the implementation and advancement of distributed ledgers, enabling groups of participating nodes or parties to deliver trustworthy and immutable services in a trustless economy. Distributed ledgers were initially designed as tamper-evident logs for recording and sharing data. All these data are maintained by independent parties without resorting to any centralized authority.
The popularity of cryptocurrencies has impacted highly in making blockchain technology widely spread. The technological advances and extending applications of blockchain have publicly received tremendous attention from academia and industry, promising to lead changes in all aspects of digital business and global economy. It is believed that blockchain will have a profound impact and influence on existing Internet infrastructures and will promote the development of a decentralized economy.
All the data and information recorded on the blockchain can be considered as digital assets, and these assets - with guarantees of authenticity- are tamper-proof and cannot be altered. Smart contracts, a set of code for logical operations which executes automatically under certain conditions, deployed on blockchains enable the creation of new types of digital assets, called Tokens. All kinds of digital information or assets can be customized in the form of tokens, with the term referred to as Tokenization.
Different blockchain networks have different processes for tokenization such as Rupto has R-tokens, which describe the fundamental functionalities and provide guidelines that a token should comply with working correctly on Rupto network. R-tokens are various types of tokens created regarding the features of assets, e.g., RPT-20 for divisible assets and RPT-721 for indivisible assets. Tokens are the representations of assets on the blockchain to facilitate transactions, whose representations.
A token is typically a digital representation of an asset available in the physical or virtual worlds such as currencies, divisible assets or coupons. Tokens are implemented by an algorithm defined in a smart contract on a blockchain. Smart contracts are essentially computer programs that verify or implement a contract by automatically carrying out a pre-den set of terms in a trackable and irreversible manner without the involvement of a third party. The output of a smart contract can be literally considered as a token which contains the asset model that is certified by a smart contract to guarantee the uniqueness of data. In general, these digital tokens will not depend on operating systems and do not include physical content within. The smart contract makes it is easy to verify the validity of a token.
The token itself does not include any economic value in it, and the “monetary" value of a token typically is assigned by the market and tokenomics. Thus, a token is not considered as a financial symbol that is validated by smart contracts of the target blockchain system. As long as validated by the smart contract, the token can be used in numerous applications or and traded in the live market. These tokens are classified into three categories as per its types: (i) fungible tokens (FT), (ii) non-fungible tokens (NFT), and (iii) semi-fungible tokens (SFT).
Fungible Tokens: The fungibility of a token refers to the fact that the token has the same or similar content compared to other fungible tokens. Thus, fungible tokens are interchangeable replaceable with, or equal to, another asset of the same category. For example, A fungible token can be readily substituted by other assets of the same or equivalent value that may be divided or exchanged. On Rupto network, it is represented as RPT-20 token standard.
Non Fungible Tokens: A non-fungible token (NFT) is a cryptographically unique, non-replicable token, which can be used to keep track of the ownership of individual assets. Non-fungible tokens differ from fungible to-kens in terms of interchangeability, uniformity, and divisibility. A non-fungible token cannot be divided in nature, in which each one contains some distinctive information and attributes to identify itself from others uniquely. This feature makes NFTs impossible to interchange with each other. It is created under RPT-721 token standard on Rupto network.
Semi Fungible Tokens: Token standards on fungible and non-fungible assets typically facility distinct contracts for each token type, which may place some redundant bytecodes on blockchain and limit certain functionality by the nature of separating each token contract. Semi-fungible tokens are a new class of tokens, which have the features of both fungible tokens and non-fungible tokens. SFTs provide more flexible interfaces to represent some complex assets or processes. RPT-1155 token standard on Rupto network represents Semi Fungible Tokens.
