Unit 2 · Level 4 · Reading a token
What is it for?
Ask what a token is FOR and there are three honest answers. Utility: you need it to use the network, like ETH for gas. Governance: it votes on protocol decisions, like UNI. Meme: it's a joke everyone is in on, like DOGE, running on pure attention. And then there's the most common answer of all, buried under buzzwords: nothing.
Free to play. No ads, no token, no account needed to start.
What you get asked
Match the token type to its actual job
One question cuts through every whitepaper: if the token vanished tomorrow, would the product break?
For years, UNI holders could vote on Uniswap but received no cut of its trading fees. The lesson?
A vote is only worth what it can vote you. If governance can't touch the cash flows, you own a say, not a share.
A token you must spend to use the network (like ETH for gas) is a ___ token.
Real utility means real, ongoing demand: every transaction needs the token, whether anyone is speculating or not.
A whitepaper says the token 'powers the ecosystem'. What's the razor-sharp follow-up question?
Many tokens are bolted onto products that don't need them. The token exists to raise money, not to function.
What's the honest description of a meme coin's value?
Meme coins are a bet that attention keeps arriving. That can work for a while, but never confuse a crowd with a cash flow. 🐜
The rest of this unit
Allocation pies, ponzinomics, and the checklist that spots exit liquidity.