In the field of decentralized technologies, a token is an instrument which is used to describe different kind of assets: money, stocks, shares, movable properties, punch cards and so on.

There are fungible and non-fungible tokens that can be programmed. The most classical examples are ERC20 tokens and ERC721 on Ethereum network. These are smart contracts standards which defines how such a token must behave at interface level.

When we say “we tokenize” something. We mean that we are going to “digitalize” an asset (into a decentralized blockchain network) in a way that it becomes easily exchanged or transacted on the network, using a token. By doing this we are using the decentralized and immutable features of the technology. This all is achieved by creating and deploying the corresponding smart contract.

A token, being coded as a smart contract, is triggered when a transaction is sent to its address. The transaction which makes it running, must contain the enough amount of GAS for all the instructions in the code to be fully run. Each code instruction, infact, needs a certain amount of GAS to be completed. The GAS is the expression of amount of unit of payments needed by the system to pay for resources used by the smart contract we are getting run.

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