Is there any reason why so many dApps have their own token?
Is there any reason why so many dApps have their own token?
I understand that tokens are an easy way for dApp developers to generate money for the development of their app, marketing, etc. But other than that, is there any reason utility-wise, that so many dApps have their token? Wouldn’t their services work just as well if they simply used the original currency of the blockchain they are built on?
Cheap rewards, raise funds, and marketing is what I usually think. If you’re giving ETH as rewards you have to acquire ETH. Reward token you mint yourself, way less costly. People usually expect a project to put up liquidity but a lot of times that’s after a token sale. Even cheaper potentially is like NFT rewards for using the mainnet/testnet. Don’t have to put up liquidity
You generally don’t get equity in the company backing the DApp. DAOs are a work in progress and without equity in the company, off chain operations binding to DAO votes is questionable. I don’t mind if I get them as rewards for using the platform as I generally already would have, otherwise I ignore DApp tokens.