You open a wallet, see a list of assets, and they all look similar at first. But under the surface, they are not the same thing. The distinction shapes how they are used, how they are secured, and what role they play in Web3.

Crypto newcomers often ask a very simple question that turns out to have a surprisingly important answer: is every crypto asset basically just a coin with a different name? The short answer is no.

Some assets are coins — native to their own blockchain, built into the network at the protocol level, not added later as an application on top. Others are tokens, created on top of an existing blockchain using smart contracts rather than running on their own independent chain.

That sounds like a technical distinction, but it has real consequences. It affects what gives an asset utility, which network secures it, how wallets interact with it, and what rights or functions it can carry.

A coin is the native asset of a blockchain. It is built into the network at the protocol level, and its core job is to power the system itself — paying transaction fees, rewarding validators or miners, and helping secure consensus. ETH is the native coin on Ethereum. BTC is the native coin on Bitcoin.

A useful way to think about a coin is that it belongs to the blockchain the way fuel belongs to an engine. The network may do many things, but the coin is part of the basic machinery that keeps it running.

A token is created on top of an existing blockchain. It does not have its own independent base layer — it relies on another network, such as Ethereum or ZKsync, to process transactions and provide settlement.

Most tokens are created through smart contracts that define their supply, balances, transfer rules, and sometimes much more. That makes tokens flexible by design. They can represent payment inside an app, access to a service, voting power in a protocol, rewards in a network, or even ownership of a digital item.

This flexibility is why tokens became such a major part of Web3. A project does not need to launch a whole new chain every time it wants its own asset. It can create a token on existing infrastructure and plug into the surrounding wallet, exchange, and application ecosystem immediately.

"A token may feel like a coin from the user's point of view, yet technically it is more like an application-specific asset that lives inside another network's rules."

The confusion is understandable because coins and tokens often look the same in a wallet. They both have prices. They both can be sent and received. They both appear on exchanges next to each other. But appearance is not architecture.

This is also why language matters. If people call everything a coin, they may miss the fact that some assets are meant to power the chain itself while others are meant to power a specific product, protocol, or community.

One of the most common token types in Web3 is the utility token. A utility token gives you some form of access or functionality inside a network, product, or ecosystem — paying for features, unlocking services, receiving rewards, or coordinating activity inside a digital economy.

The important point is that the token does something. It is part of how a system functions day to day, not just sitting there as a speculative asset.

Another important category is the governance token. Governance tokens give holders a say in how a protocol or ecosystem evolves, often through on-chain voting on proposals — decisions about treasury use, protocol upgrades, incentives, or parameter changes.

In many digital platforms, users create value but have almost no formal influence over the system's rules. Governance tokens attempt to shift some of that influence toward the community, creating a new model of coordination.

If many different projects create their own tokens, how do wallets and apps know how to handle all of them? The answer is token standards. The most widely used is ERC-20, a technical specification on Ethereum that defines a shared set of rules every compatible token must follow — how balances are tracked, how transfers are made, and how one address can approve another to spend tokens on its behalf.

Because every ERC-20 token speaks the same technical language, any wallet or application that supports one ERC-20 token automatically supports all others. This interoperability is a big part of why the token ecosystem on Ethereum and Ethereum-compatible networks like ZKsync can grow quickly — new tokens slot in without requiring every app and wallet to be rebuilt from scratch.

NODL is a useful example because it shows how a token can carry both utility and governance functions at once. NODL is the token of the Nodle Network, deployed on ZKsync Era and settled on Ethereum.

On the utility side, it is distributed to the phones running the Nodle app as a reward for providing connectivity and verifying real-world data, and it is used by enterprises to pay for network services and smart missions. On the governance side, NODL holders can vote on significant protocol changes and help shape the network's direction over time.

Because ZKsync is fully Ethereum-compatible, NODL benefits from Ethereum's security guarantees and can interact with the broader ecosystem of wallets, exchanges, and applications that support the ERC-20 standard. For everyday users, the NODL balance in a wallet is not just a number — it represents an active role in both the operation and the future of the Nodle Network.

A more useful question than "Is this a coin?" is: what is this asset for? Does it secure a network? Pay fees? Represent access? Unlock an app? Coordinate a community? Distribute rewards? Give voting rights?

Once you start asking those questions, an asset stops being just a ticker and starts becoming part of a larger system design. That shift in perspective is important for anyone entering Web3. The goal is not only to collect terms, but to understand the role each asset plays in the network around it — and that is how wallets, smart contracts, tokens, and applications begin to fit together into one picture.

Coming up · e29

You have now seen how wallets hold keys, how smart contracts enforce rules, and how tokens carry utility and governance inside a network. But most of those concepts still assume a certain level of friction: seed phrases to manage, gas to pay, approvals to understand. In e29, the focus shifts to how that friction is quietly disappearing. Account abstraction and in-app wallets are changing how Web3 apps feel on the surface — letting apps sponsor gas, hide seed phrases, and batch complex actions into a single tap — all while keeping your assets under your control. The question is: what changes, what stays the same, and what should every user still know?

Stay curious, stay in control, keep Clicking and Nodle on! 🧠