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Protocol Tokens – Definition

According to Delfin, Protocol Tokens "represent a claim to a capital, transformable/consumable, or a store of value asset. However, since they can only capture a specific market segment this effectively limits their use as store of value." Instead of key metrics, he assigns each Protocol Token a single NAICS classification that reflects the specific industry of its main economic activity.

Protocol Tokens are the second of the two main categories that structure the four types of crypto assets.

Protocol Tokens in plain English

Put simply, Protocol Tokens are a bit like vouchers. They allow you to get something in return for them, but only something specific.

Protocol Token taxonomy

Brave New Coin divides Protocol Tokens into

  1. Application Tokens, and
  2. Side Chains

as illustrated in the following:

Protocol Tokens Illustration

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