Help me understand something fundamental about altcoins. For those coins that serve as defi projects with real-world use cases, why do they need to be tradable, and why do they have a fluctuating market value? In other words, why is each particular application or idea based on blockchain also something that can be bought and sold by people who are not involved in the project?

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they’re typically governance tokens, akin to voting shares. kpmg1 is right.

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You own a piece of equity. Just like any other stock.

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You own a piece of the project the alt coin is creating. Through that project, the goal is to be able to make money through fees. Just like any other business, where you see a need, you create something and in return get compensated for it.

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KPMG1 nailed it. You could also extend the same question to Bitcoin. Coins/tokens are assets that have market-determined value. Some can be used for various purposes, some can’t.

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I assume it’s to raise capital to build/maintain the project, similar to selling shares of a business. Following 👀 to see other thoughts.

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If the project has a DAO behind it, the token is likely a governance token which can be thought of the same as stock in traditional finance. Other projects use coins as utility for the application it implements, such as Filecoin

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Most accurate response I’ve seen. Thank you!

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