Native tokens

A native token is the token a blockchain is built around. Bitcoin’s is bitcoin (BTC), Ethereum’s is ether (ETH) and Solana’s is SOL. Nobody has to write a smart contract to create them, because they’re part of the blockchain’s own rules. On most blockchains, new native tokens are created as rewards for the people who run the network.

Native tokens keep the network running. Every transaction pays a small fee in the native token, often called gas. Even sending a different token, like a dollar stablecoin on Ethereum, needs a little ether to cover the fee. The native token is also how miners and validators, the computers that check and add new transactions, get paid. On proof of stake blockchains, validators also lock up native tokens as a deposit to show they’ll play by the rules.

Because a native token is tied to its network, its price tends to rise and fall with how much people use and trust that blockchain, and it can swing sharply. Those swings mean different things depending on your role. A firm holding ether as its own investment feels every price move. A firm that only needs a little ether to pay fees mostly cares about having enough on hand. A lender accepting it as collateral worries about whether it will still cover the loan.