Your Guide to Tokens: Types, Design, Uses, More

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Apr 25, 2025

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In this discussion, guests Eddy Lazzarin, CTO at a16z crypto, Miles Jennings, General Counsel and Head of Policy, and Scott Kominers, a Harvard Business School professor, unveil a groundbreaking 7-part framework for categorizing tokens. They discuss the evolution of token terminology, exploring various types beyond traditional labels like governance or utility tokens. The conversation dives into how token value is derived from control systems versus independent networks and emphasizes blockchain's role in revolutionizing loyalty programs, enhancing consumer empowerment, and clarifying token dynamics in decentralized marketplaces.

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INSIGHT

Tokens as Blank Blockchain Records

Tokens are fundamentally records on a blockchain, not necessarily currencies or money.
They are blank, countable objects that can represent many functionalities beyond payments.

INSIGHT

Beyond Governance and Utility Tokens

Classifying tokens by traditional categories like "governance" or "utility" is shallow and vague.
A deeper framework considers economic, legal, and technical dimensions to properly classify tokens.

INSIGHT

Defining Meme Coins by Value

Tokens with no inherent value are meme coins; those with inherent value fall into other classifications.
Explaining how a token works signals it is not a meme coin.

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with @eddylazzarin @skominers @milesjennings @rhhackett

Today we're diving deep into *the* defining concept in crypto: tokens.

We're moving beyond conventional categories — like “governance tokens” or “utility tokens” or even “memecoins” — to present a full taxonomy that details what tokens are, what they aren’t, and what they're capable of becoming.

Questions we'll explore include: What is a token? Is it a form of money? A piece of data? Something else? How many types of tokens are there — and who is in control of each? And how should we think about their actual economic, legal, and technical characteristics? We'll also dig into different token designs and their uses; where tokens derive value from; how they jibe with securities laws; and much more.

In this conversation, you’ll hear from several experts on the a16z crypto team who have developed a new 7-part framework for classifying tokens, which you can find linked below. Joining us are the coauthors: Chief Technology Officer Eddy Lazzarin, General Counsel and Head of Policy Miles Jennings, and Research Partner Scott Kominers, who is also a Professor at Harvard Business School where he teaches courses on market design and entrepreneurship.

Check out the resources below for a flowchart that we’ll also be referencing throughout this episode and that will be helpful as we wend our way through the token idea maze.

Timestamps:

(0:00) Introduction

(3:28) The Evolution of Token Terminology

(6:19) Classifying Tokens: Economic, Legal, and Technical Dimensions

(8:37) Moving Beyond “Governance Tokens”

(12:05) Inherent Value: The Memecoin Debate

(15:35) Company-Controlled Tokens: Risks and Realities

(31:33) Arcade Tokens: Stability and Utility

(46:00) The Power of Blockchain Interoperability

(49:34) Shared Rewards and Loyalty Programs

(59:19) Asset-Backed Tokens and Their Mechanisms

(1:08:23) Collectible Tokens and Their Uniqueness

(1:14:31) Network Tokens: The Future of Decentralized Marketplaces

(1:31:03) Regulatory Challenges and "Lawyer Tokens"

(1:36:57) Final Thoughts and Future Prospects

Resources referenced in this episode:

7 canonical tokens, defined [see flowchart] by Miles Jennings, Scott Duke Kominers, and Eddy Lazzarin (a16z crypto newsletter, March 2025)
Defining tokens by Miles Jennings, Scott Duke Kominers, and Eddy Lazzarin (a16z crypto, March 2025)
Network tokens vs. company-backed tokens by Miles Jennings, Scott Duke Kominers, and Eddy Lazzarin (a16z crypto, March 2025)
Defining decentralization: It comes down to control by Miles Jennings (a16z crypto, February 2025)
Read Write Own: Building the Next Era of the Internet by Chris Dixon (Penguin Random House, January 2024)
The Everything Token: How NFTs and Web3 Will Transform the Way We Buy, Sell, and Create by Steve Kaczynski and Scott Duke Kominers (Penguin Random House, January 2024)

As a reminder, none of the content should be taken as investment, business, legal, or tax advice; please see a16z.com/disclosures for more important information, including a link to a list of our investments.