Crypto Terms: Letter T

What is Token Issuance?

Token Issuance MEANING:
Token Issuance - the process of producing new tokens and adding them to a cryptocurrency's total token supply.
1 minute

Let's find out Token Issuance meaning, definition in crypto, what is Token Issuance, and all other detailed facts.

In the most basic sense, token issuance is the process of producing new tokens and adding them to the total token supply of a cryptocurrency. Token issuance is usually governed by complex algorithmic calculations that estimate the number of tokens required for the blockchain ecosystem to operate effectively.

Token issuance has many forms that depend on cryptocurrency and blockchain. Besides, note that each cryptocurrency has a different total supply of tokens that is also calculated using complex algorithmic calculations.

It's essential for blockchain-based projects and cryptocurrencies to explain how their token issuing process works. For instance, the Bitcoin whitepaper specifies that there could only ever be 21 million coins. As a result, once the limit of 21 million tokens is achieved, Bitcoin will no longer be issued. Though other cryptocurrencies have chosen not to have a supply limit.

Token issuance can also refer to tokenization, which involves adding an asset from outside of the cryptocurrency's ecosystem to the blockchain via a crypto token. In such instances, token issuance becomes the process of establishing a token that represents an external asset rather than one that belongs to a coin.

To establish agreement across the network of nodes, several consensus techniques use a combination of token issuance and token burning. Token burning is the polar opposite of token issuance because in this process tokens are destroyed irreversibly. 

The regulations that govern token issuance on various projects assist investors in deciding whether or not to engage in the project. Besides, these regulations might have an effect on the value of crypto assets. When the blockchain is near to exceeding its maximum supply limit, cryptocurrencies with a fixed maximum supply often experience price increases.