“Mirror, mirror, on the wall — which’s the fairest token of them all?”

Let’s talk about something serious and something that should be taken seriously.

First things first

• Security tokens and utility tokens serve very different purposes in the cryptocurrency environment.
• Security tokens represent ownership shares in a company that does business using blockchain technology.
• Utility tokens are promotional tools that grant holders special access or promotions for future product or service launches.

Security tokens (“securities tokens”) are a type of security where other tokens are not. Utility tokens are the ones most commonly issued at an initial coin offering (ICO). (Click to check out the ICO of Qoomed) Rather than representing an ownership stake in the actual company, they’re more like “golden tickets.” They give holders access to special services or preferential treatment, such as a discount at the launch of a start-up’s product line. These products might be software packages or software as a service platform.

They’re far more like promotional tools and don’t grant ownership stakes in companies, utility tokens aren’t considered as investments. Utility tokens can grow in value if what your token represents suddenly becomes very popular and in demand which means you have to do your study on the project very well unless you possess a magic mirror on your wall. Well, some of the cannabis industry leader companies seems to have one magic mirror on their wall and the answer to the infamous question was Cannfinity token.

Security tokens come with regulatory oversight, because they’re an ownership stake in a company, but utility tokens are kind of an “anything goes” situation, like you’d find with any kind of limited-run collectible or promotional.

If you just want to buy and hold a little trinket from an ICO for a company that matters to you, a utility token can do the trick or get you a discount down the road. Pay close attention to the redemption terms of the token before purchasing so you fully understand what you’re buying. At the end of the day no one wants the rug pulled under from his feet even though it may give you the adrenalin rush of your life

2nd generation tokenomics are more aware of balancing supply, demand, inflation and deflation. 1st generation tokenomics were often based on the idea that users will join a platform, and this will help boost the price (without any foresight as to how this will work in the future). 2nd generation tokenomics implement various mechanisms in parallel to ensure that the economy can grow in a stable rate. So be sure that the project relies on up to date OPs (operational procedures) and approaches.

Designing a good token economy is no easy task. Many projects making the mistake of simply using utility tokens as a replacement for fiat money. As water under the bridge, token economies have grown more complicated. To learn more about Cannfinity Tokenomics, you can visit our website’s tokenomics section and for a more detailed look, and feel free to request our whitepaper while you are there as well.

An important realisation is that irrespective of the actual mechanisms involved, a token economy must satisfy the following

1. Make sure that at least one token (if we are talking about a multiple token economy) provides value which cannot be found in fiat money.
2. Make sure that at least one token appreciates in value.
3. Value appreciation happens in a sustainable manner, it is not simply based upon burning tokens making the project look like a giant Ponzi scheme.
4. Allow for many different use cases within the same system This allows tokenomics to play a role in discovering product-market fit.

“Mirror mirror on the wall, should we let them know? I think all will hear about Cannfinity soon though!”