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What a time to be alive! This February another Cardano “hard-fork” will allow for NATIVE TOKENS to be deployed on the Cardano Mainnet 🎉.

What does this mean? And what are Native tokens? And what will happen in the months to come after?

Well if you have 2 hours of time you can listen to the January update here, or want to see IOHK’s own deep dive you can read here. Otherwise, let us give you the low down 🙌 .

Native Tokens

A Native token allows for users like me and you to deploy our own coin or token and exchange value on the Cardano Protocol. This will allow for the creation of many services mostly virtual and digital in nature to begin with.

IOHK have built native tokens on Cardano according to four principles:

• lightweight
• affordability
• security
• unified process

But first here’s a summary on how they have been implemented

Implementation summary

• Cardano will have a Multi-asset ledger, meaning transactions will have “token bundles”, thus you can move as many tokens as you like BY DEFAULT in one transaction. (makes sense right, tell that to the ETH team 😅.)
• Say goodbye to ERC20 and ERC721 and ERC12390🐙.123-🤯9…(thats right, no need to have hundreds of different, and some faulty, token standards like Ethereum)
• When Creating a new token you simply choose the token name, symbol, monetary policy and a few other simple parameters.
• The monetary policy explains how and who can create/mint the token. It basically dictates the laws of token supply.
• THE GENIUS BIT is that you don’t have to create your own monetary policy and re-invent the wheel 🎡. Simply refer your token to an already proven monetary policy template. (basically you’ll just say “oh, let my new token by an ERC20 style token”, no need to copy and paste the code)
• Each new token created will have an “Asset ID”
• The Asset ID will be the combination of a unique ID and the Monetary Policy Hash
• Assets with the same Asset ID are “fungible” — meaning they are considered equal, otherwise they are considered non-fungible.
• Transferring one token to another is a nightmare 😱 on Ethereum because you have to write a custom contract for each token pair. BY DEFAULT, many types of tokens can be accepted and transacted in the same transaction
• For a more detailed description check out the developer docs

LightWeight

• At no point do you deploy contract code! All you do is tell the Cardano protocol the few attributes that defines your token. It’s more like submitting name and address to a registry.
• No need to code the Tokenomics by just picking some from the classic token standards

Affordability

• The ledger doesn’t have to execute smart contract code to send your token, hence it will be just as cheap as a regular ADA transaction with a few more bytes of data!
• The ledger only stores the monetary policy ONCE for all tokens that reference it! Thus incredibly cheap to store a new token, thus… cheap to create one for us. YAY 🥳

Security

• No more token contract bugs! By picking tried and proven monetary policies it HUGELY removes user-created bugs
• The ledger will enforce the monetary policy for you, so you cant get into funky hyper-inflating scenarios

Unified Process

• Because the whole creation of a token is SO SIMPLE there is only one approach to doing it, hence unifying the development process, meaning you can go from zero to hero in minutes by reading one developer doc

Conclusion

Native Tokens are coming, and WOWZA will it be easy to use. Reminds me of when apple first came out and solved the mobile phone experience for the world. We and the rest of the Cardano Community are absolutely thrilled for this Goguen upgrade, and can’t wait to see what the open source world of Cardano will build next. ❤️😎

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