| Term | Meaning | Examples |
| Token | The basic accounting unit for a single Asset type. | 1 lovelace 1 USDT |
| Value | The type which is used by the ledger to represent tokens that are tracked. Pre-Mary, Value is just a quantity of Ada; post-Mary, Value is a bundle of tokens with associated quantities. The ledger never talks about bare “tokens”, rather it always uses Value. |
1 lovelace and 3 USDT 1000 lovelace and 100 USDT Just 10 lovelace. |
| Token bundle | Another word for Value. | |
| Script | A piece of code which runs on the Cardano blockchain. Used to support “smart contracts”. Cardano will support several scripting languages: in Mary this will just be the multisig language, in subsequent eras, it will include Plutus Core as well. |
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Minting policy script |
A script which determines whether a transaction is allowed to mint or burn a particular currency. |
A multisig script stating the minting (burning) is authorized if the transaction is signed by Alice. Alice therefore has complete freedom to mint and burn tokens as she desires. |
| Policy ID | An identifier that uniquely identifies a currency. The Policy ID is the hash of the minting policy script for the currency. |
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| Asset | The type of a collection of equivalent token values in a single currency. An asset is uniquely identified by an Asset ID. |
ada Sword Voting Shares Non Voting Shares |
| Asset name | A name for a particular asset type inside a currency. Asset names must be unique within a currency, but do not need to be unique across different currencies. |
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| Asset ID | A pair of a policy ID and and asset name. Uniquely identifies an asset. |
(<hash of a script>, “Sword”) |
Native tokens behave the same as ada in most ways. However, Ada is the “principal” currency of Cardano, and is the only one which can be used for some special purposes, such as paying fees.
| Ada | Native tokens | Comment | |
| Can be sent in transactions? | Y | Y | |
| Can be kept in UTXO outputs | Y | Y | |
| Can be locked with script outputs | Y | Y | |
| Can be sent to an exchange address | Y | Y | |
| Can be minted/burned | N | Y | Ada cannot be created or destroyed, its policy ID does not correspond to a script |
Can be used to pay fees, receive rewards, etc. |
Y | N | Ada is the only currency which can be used for fees and rewards. |
Can be used to cover the minimum UTXO value |
Y | N | Ada is the only currency which can be used for deposits. |
ERC-20 is a token standard on Ethereum, and the most popular way to issue tokens on a blockchain today.
| ERC-20 | Native tokens | |
| Backing blockchain | Ethereum | Cardano |
| Relationship to the blockchain | A contract standard, users copy-paste the standard code and modify it. |
Not a standard. Most functionality is built into the ledger itself. |
| Controlled by | A Solidity smart contract | A minting policy script in any scripting language supported by Cardano |
Requires a smart contract to mint/burn? |
Y | Y |
| Minting logic can be customized? | Y | Y |
Requires a smart contract to transfer? |
Y | N |
Can be used by other smart contracts without special support? |
N | Y |
Can be transferred alongside other tokens? |
N | Y |
| Transfer logic provided by? | Copy-pasting from the ERC-20 template | The Cardano ledger itself |
| Transfer logic can be customized? | Y | N |
| Requires special fees to transfer? | Y | N |
Requires additional event-handling logic to track transfers? |
Y | N |
| Supports non-fungible tokens? | N | Y |
| Human readable metadata | Provided by the operating smart contract |
Provided by the off-chain metadata server |
ERC-20 tokens have proven vulnerable to a wide range of security issues, most of which are not present for Native Tokens.
| ERC-20 | Native tokens | Comment | |
| User errors in copying standard code | Y | N | All shared functionality is provided by the ledger |
| Over-/under-flow vulnerabilities | Y | N | Cardano’s scripting languages don’t have fixed-size integers |
| Unprotected functions | Y | N | User code is called only in very specific cases, to validate minting. |
| Denial of service via gas price attacks | Y | N | Denial of service attacks on the entire system are still possible. |