Thread by @InputOutputHK

1/ #Cardano native tokens are a game-changer for the #blockchain world, enabling innovative use cases and offering unique benefits. Let’s explore the top benefits of Cardano’s native token functionality 🧵. twitter.com/i/web/status/1…

2/ First, here’s a brief refresher on what native tokens are:

3/ Here are some key terms associated with native tokens:

Native: token logic runs directly on Cardano ledger, rather than using smart contracts

Token: the representation of an asset stored on the Cardano blockchain

Asset: an item on the blockchain that has a value

4/ The advantages of minting tokens on #Cardano versus other chains can be grouped accordingly:

- Efficiency
- Security
- Accessibility
- Interoperability
- Programmability
- Multi-asset functionality
- Ecosystem growth

5/ Energy & cost-efficiency

#Cardano is a proof-of-stake (PoS) #blockchain. Its native tokens are created, validated & secured by a network of stakeholders rather than by proof-of-work mining. This makes native token creation more energy & cost-efficient than on PoW blockchains.

6/ Cost-efficiency cont’d
Cardano's transaction fees are computed at the time of creation, without using gas like on other blockchains. With simple scripting languages, there's no need for additional on-chain code, which means that fees are entirely size-based and cost-effective.

7/ Cost-efficiency cont’d

Read more about Cardano’s determinism and no-surprises transaction validation for more details > iohk.io/en/blog/posts/…

8/ Multi-asset functionality

Another cost-efficient feature of native tokens is multi-asset functionality. Meaning, multiple tokens can be transferred in one transaction (tx), unlike some other blockchains. When you bundle transactions, you save by paying one tx fee.

9/ Security

Creating a native token on #Cardano doesn’t require writing smart contracts, unlike with ERC20 tokens. This is because of the underlying EUTXO accounting model, which allows users to create and manage tokens natively on the blockchain.

10/ Security cont’d.

Since token creation doesn’t require you to learn or write complex code, there is no place for code errors. This can be especially important for high-value or mission-critical assets.

11/ Security cont’d.

Also, since minting #Cardano native token doesn’t require you to learn or write complex code or use a smart contract, this reduces the likelihood of potential bugs or malicious code since user code is only called in very specific cases to validate minting.

12/ Security cont’d.

And, native token functionality prevents DoS attacks via gas price attacks, as Cardano’s EUTXO model allows users to calculate the exact transaction fee before transaction submission.

13/ Programmability

Cardano's native tokens are programmable. Developers can create custom rules for token distribution, transfer, and ownership. This allows for more sophisticated applications and use cases, including NFTs, DeFi, and gaming.

14/ Accessibility

Cardano's native tokens are designed to be simple to use, regardless of technical expertise or financial resources. This reflects Cardano's focus on user experience, education, community building, as well as its commitment to social impact & sustainability.

15/ Wallet support

Native tokens are easier for wallets to integrate because of Cardano’s native support for multi-asset functionality.

16/ Wallet support cont’d

ERC-20 tokens are created using smart contracts & wallets need to integrate with each individual token contract in order to support it. This can be a time-consuming & resource-intensive process, esp. if there are many different tokens on the platform.

17/ Wallet support cont’d

Due to native multi-asset support, wallets only need to integrate with the Cardano blockchain once in order to support all native tokens. This ensures the fast, simple, and efficient integration of Cardano tokens.

18/ Interoperability

There are a number of solutions that enable native token interoperability – the ability to transfer tokens across interconnected blockchains. This is made possible with sidechain tools, for example.

19/ More about interoperability

- proof of concept #Cardano EVM sidechain & sidechain toolkit: iohk.io/en/blog/posts/…
iohk.io/en/blog/posts/…
- @Milkomeda_com cross-blockchain #DApp creation: milkomeda.com
- @wanchain_org cross-chain bridges: essentialcardano.io/article/update…

20/ Ecosystem growth

#Cardano's native tokens are used by developers, entrepreneurs and community members committed to building innovative and sustainable applications and use cases. IOG, @Cardano_CF, and @emurgo_io also support the ecosystem.

21/ Ecosystem growth cont’d

Community members #BuildingonCardano praise native token functionality:

“Native assets set #Cardano apart...eliminating the need for interacting with smart contracts to exchange them... & eliminating security flaws.” – John Huthmaker, @CnftHub

22/ Ecosystem growth cont’d

Cardano's native tokens are supported by a growing number of wallets, exchanges, & other infrastructure providers, which makes it easier for users to buy, sell, & manage assets.

Learn more here about the #Cardano ecosystem:
services.iohk.io/guide-to-the-e…

23/ Finally, Cardano's native tokens are part of a larger vision to create a more equitable, transparent, and decentralized financial system. By leveraging the power of #blockchain, #Cardano is creating new opportunities for economic growth, innovation, and social progress.