Concept

A native crypto asset is a native asset that is the primary digital asset (cryptoasset) of a specific blockchain or network. Native cryptos are any types of cryptos (cryptoassets) created and operated on a blockchain. By nature, this crypto is perceived to be a blockchain’s inherent digital asset (coin or currency). The purpose or main function of cryptos vary according to its specific nature. For example, in the case of bitcoin, it is designed to serve as a cryptocurrency, and its native symbol is BTC. As for Ethereum, its native crypto is known as ether (ETH), which is created to operate on its own blockchain. Every independent blockchain issues and uses its own native crypto/ native token. It constitutes the currency used for compensation of miners for adding blocks to the blockchain, among others.

Role on a blockchain

A native crypto is the primary digital asset of a certain blockchain, and it helps the blockchain’s seamlessly operate. Native cryptos facilitate transactions and may also be used as a means of payment for transaction fees. These cryptos are also used to reward miners or validators who control and collectively run the blockchain. As opposed to non-native cryptos, native cryptos are integral to the core functions and operability of a network. In addition to its own cryptos, a network may host non-native cryptocurrencies along with nonfungible tokens (NFTs) and many other smart contract-based tokens.

Native cryptos help operate multiple applications running on their respective blockchains. These cryptos are exchanged in everyday transactions and also as currency for payment of smart contract implementation. Network participants also receive native cryptos for their roles in validating and secure the blockchain. In the domain of decentralized applications (dApps), native cryptos represent the primary asset/ currency for transactions, governance, and granting rights and privileged for specific features. In DeFi, native cryptos allow participants to lend and borrow, buy and sell without third-parties or intermediaries.