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From network symbols to coins, A16z Crypto has put a framework to help companies move in the advanced scene.
What is the encrypted currency? According to the definition of Wikipedia, it is a digital currency designed to work through a computer network “that does not depend on any central authority, such as the government or the bank, to support it.”
And while initially in 2009, there was only one encrypted currency, called Bitcoin (BTCThings have changed significantly since then. Now, there are more than 12 million different icons, for each of the encryption price collection platforms. But how do you differ from them? There is memecoins, symbols, security symbols, and many others. No wonder Crypto is very complicated.
“Therefore, whether you are building a Blockchain project, investing in symbols, or simply using them as a consumer, it is necessary to know what you are looking for. It is important not to confuse, for example, memecoins with network codes.”
A16z Crypto
To help sorting the encryption things, Miles Jennings, Scott Duke Comings, and Eddy Lazzarin from A16z Crypto I created a framework To understand the seven categories of symbols they see project owners often build with them. Below is a collapse of these groups.
Network symbols
Distinctive symbols of the network are used to keep the Blockchain protocol or smart nodes. Basically, its value comes from how the network works. They usually have a clear purpose, such as helping network processes, forming consensus, upgrading the protocol, or bonus some of the actions within the network.
As A16z Crypto explains, these networks, where distinctive symbols live, usually have features such as “software repurchase operations, profit distributions, and other changes to the total symbolic supply by creating a distinctive symbol or combustion to enter the stress and contraction of the network service.”
The network symbols depend on confidence. On this aspect, A16z Crypto says these symbols are “similar to both goods and securities.”
“The realization of this, both the SEC 2019 and Fit21 working framework stipulates the exclusion of the distinctive symbols of the network from the laws of US stocks when these consequences are reduced by confidence through the decentralization of the basic network.”
A16z Crypto
These symbols are used to launch new networks and distribute ownership or control and maintain network safe. The brightest examples are bitcoin, ethereum (Eth), Solana (Teller), UPAP (Uni), And Dogecoin (Dodge).
Security symbols
Although network symbols may seem like securities, the distinctive security symbols are actually digital versions of traditional securities, such as company shares or corporate bonds. They can also have special features, such as granting profits in a limited liability company or rights to future settlement payments of lawsuits.
While securities give those who have rights, nicknames, or specific interests, the source often controls the risks of the original, these symbols will remain under US securities laws, as the A16z Crypto indicates. Although these symbols are not common as the distinctive network or Memecoins, they are still used to raise money for commercial projects.
For example, Etherfuse Stablebonds and ASPEN COIN gave fracture ownership in St. Regis Aspen.
Codes supported by the company
The company -backed symbols are linked to an application, product, or service outside the series run by a central company or organization.
Like the distinctive network symbols, the company -backed symbols may use Blockchain contracts and smart contracts (for example, to facilitate payments). However, it primarily serves operations outside the chain instead of ownership of the network. As a result, the company has more control over the distinctive code, interest and value.
Although these symbols do not provide a specific right or a title like traditional securities, they still have dependency dependence on securities.
“Its value depends on its nature on a system controlled by a person, company or administrative team.”
A16z Crypto
For this exact reason, the company -backed symbols may be subject to US stock laws when they attract investment, and analysts warn. Historically, the company -backed symbols have been used to circumvent securities laws in the United States, where agents work for property or profits in companies.
For example, examples include (Ftt), Which was the interest of profit on the FTX exchange is notorious. Binance currency (BNBAnother example of the company is supported by the company, which moved to a network code after the launch of the BNB series.
Corridor symbols
A16z Crypto A16z Crypto explains that pathogenic symbols are used primarily within the system and not aimed at investing. Often these symbols serve as currencies within virtual economies, such as Digital gold in the gameLoyalty points for the membership program, or credits for digital products.
What makes the distinctive arcade unique symbols is that they are designed to inhibit speculation. They may have an unexploited supply – this means that an unlimited number can be limited – and/or limited transfer capacity.
As A16z Crypto indicates, these symbols may “end or lose value if they are not used, or they may have value and cash interest only within the system in which it is released.” As a rule, the symbols of the corridors are not of financial returns, which makes them relatively safe from the laws of US stock.
Examples include Fly and The Loyalty Taken for BlackBird Restaurant, and Pocketful of Quarters, which are inside the game that are diluted by the US Securities and Stock Exchange Committee in 2019.
Capable symbols
One of the most known types of symbols is collected. They can represent things like artwork, a piece of music, or even a ticket ticket for the concert. But for the public, it is more known as a different name – NftsOr not explosive symbols. Although NFTS may look like another speculative bubble, these symbols may already have a benefit within specific contexts.
“The distinguished code may act as a license or a ticket to an event; it can be used in a video game (such as a sword); or can provide property rights in terms of intellectual property.”
A16z Crypto
Since the distinctively collected symbols are generally related to ready -made goods and do not depend on the efforts of the third party, they are usually excluded from American stock law, and A16z Crypto is observed. Perhaps NFTS is known Liech Club bored and Cryptopunks.
Asset backed symbols
Asset backed symbols get their value from the claim of basic assets. For example, commodities, currency, or even digital assets such as cryptocurrencies.
These symbols may be fully or partially guaranteed, and they serve different purposes, such as working as a value or hedge stores. However, unlike collected symbols, which derive the value from the ownership of unique goods, more asset backed symbols such as financial tools work. In the A16z Crypto, the “organizational treatment of assets -backed symbols depends on its structure and use.”
Examples include stablecoins supported by FIAT, such as the International dollar currency (USDC), Liquidity supply symbols such as C-Tokens in the compound, or derivative symbols such as Squeeth Openn.
Micoins
Then, we have Micoins Perhaps the most famous. This is like the height of chaos on the Internet. They do not really do anything useful, and they are often everything about themes or any noise in society. Their basics? Forget that. The whole thing is about speculation and whatever the market, which means that it is easy to treat or obtain a rug.
Due to their limits, Memecoins is generally excluded from the laws of US stock, “says A16z Crypto, noting that they are still” subject to anti -fraud and manipulation laws. ” What makes them justify? They have a zero purpose or real use, and their prices can be swinging like madness, which makes them greatly that there is no investment. Some of them are famous for Baby (baby), Shaiba Eno (Gray), And the new official fees (Trump) Mumikwin linked US President Donald Trump.
