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Cryptocurrencies and Initial Coin Offerings have made it to mainstream media during the last year. Investors and governments started to pay close attention to them as well. But there is a lack of understanding of the different token types. Those tokens that are the hearth of the ICO projects are sometimes used in incorrect ways, leading to mistakes, misunderstandings and pentalties.

That’s why, a team of analysts and experts from different Universities, has developed a ‘Token Classification Framework’ so as to help individuals, investors, developers, and policymakers to understand the main differences among tokens.

The Untitled INC team consists of many members, but the once mostly involved in this publication are: Thomas Euler, Peter Milan Trapp, Prof. Dr. Andranik Tumasjan of the University of Mainz, Dr. Oliver Krause, Dr. Karl-Michael Henneking and Daniel Pichler.

A big shout out to them!

Token Classification Framework

As the world moves in a direction in which tokens will be part of our daily life, it is of importance to understand and differentiate them.

The blog post written by the team reads as follows:

“Investors, regulators, politicians and decision-makers in businesses are all taking the space increasingly serious. Many are in the process of formulating their positions and strategies for dealing with the subject. Clarity and accessibility of relevant knowledge are key to allowing those actors to make good informed decisions.”

The paper explains that there are multiple angles from which tokens can be analyzed: purpose, utility, legal status, it’s underlying value and the technical layer it’s implemented on.

Analytic Angles to Analyse Tokens

The team has done a great job on segmenting the tokens in different angles, so the people of blockchain don’t miss the blind spots:

  • In terms of purpose
  • In terms of utility
  • In terms of underlying value
  • In terms of technical layer
  • In temrs of legal status

They also have also given examples on existing cryptocurrencies and tokens. See the following example:


Source: https://medium.com/untitled-inc/the-token-classification-framework-290b518eaab6

Token Framework Conclusion

The presented token framework is an important and useful tool to classify the various tokens out in the market. We hope that the policymakers make a good use of it and fit their laws to tangible models, that non-lawyers can understand.

Token Framework

Token Types Per Dimension

Other Sources

A helpful Google Spreadsheet from Coinbase to help people estimate if a particular token is a security or utility under USA law (SEC).

Please feel free to share in the comment section below any other cool sources for categorizing cryptos in any possible way.

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