Glossary · Smart Contracts

Native token.

A custom asset that lives directly inside UTxOs alongside ada, not implemented as a smart contract.

In depth

Since the Mary hard fork, Cardano has supported user-defined tokens as a ledger primitive. A UTxO can carry ada plus any combination of native tokens. There is no ERC-20-style contract; transferring a token is just a normal transaction, and minting is controlled by the token’s minting policy.

Example

A community can mint a fan token whose policy ID is a hash of a 5-of-7 multi-sig script; holders move it around like ada.

Next on this path

  1. NFT A native token whose minting policy guarantees a one-of-one supply.
  2. Minting policy A script that decides whether new units of a native token may be minted or burned.