What are native tokens, and why do they matter in Web3 trading?

Every time you send Bitcoin (BTC), trade Ethereum (ETH), or swap assets on a DeFi app, something is working in the background to make it all possible: the native token.

These tokens are the backbone of every blockchain network. Still, they often get less attention than trending altcoins or new token launches. But if you're trading or using Web3 apps regularly, understanding native tokens is essential.

Let’s explore what native tokens are, how they compare to other types of tokens, and why you need them to make the most of your Web3 trading experience.

What is a native token?

Every blockchain has its own in-built “fuel”. This is the native token – the original digital asset of a blockchain that enables transactions, rewards validators and keeps the network secure.

Think of it like the local currency in a country. You might bring euros (€) to the UK, but if you want to buy a coffee, you’ll need to exchange them for pounds (£) first. Similarly, on a blockchain, if you want to do anything – from sending tokens to interacting with smart contracts – you’ll need the chain’s native token.

Some well-known examples are:

• Bitcoin (BTC): native token of the Bitcoin network

• Ether (ETH): native token of the Ethereum network

• BNB: used on BNB Chain

• SOL: powers the Solana blockchain

Some native tokens also unlock extra functionality, like staking, voting, or accessing exclusive features within the blockchain ecosystem. Their role isn’t limited to payments – as they’re often essential for governance, participation and growth.

Without native tokens, blockchain networks couldn’t process transactions, stay secure or function at scale. In short, they’re what makes the whole system run.

Native tokens vs. non-native tokens

To understand native tokens better, let’s compare them with other types of tokens that live on top of blockchains:

1. Utility tokens

Utility tokens give you access to a product or service within a blockchain-based platform. They’re usually created using smart contracts, not by the blockchain itself. Unlike native tokens, utility tokens aren’t required to pay gas fees or validate transactions.

• Example: UNI is a utility token for Uniswap. You can use it to participate in liquidity mining or earn discounts.

2. Security tokens

Security tokens represent ownership in a real-world asset – like stocks in a company, bonds or property – and are subject to financial regulations. They’re often issued to raise capital and can offer dividends, voting rights or profit-sharing.

Unlike utility tokens, security tokens are considered investments under financial law. They come with legal protections and obligations.

Want to dive deeper? Read our guide on the difference between utility tokens and security tokens.

3. Governance tokens

Governance tokens allow holders to vote on the future of a protocol or decentralised application (DApp). These tokens often double as utility tokens, giving both access and influence. While governance tokens help steer a project, they aren’t involved in the security or core infrastructure of the blockchain.

• Example: COMP (Compound). Holding COMP lets you vote on protocol upgrades and proposals.

4. Wrapped tokens

Wrapped tokens are copies of a native token, represented on a different blockchain. They make it possible to use Bitcoin on Ethereum-based platforms, for instance.

• Example: WBTC (Wrapped Bitcoin) is an ERC-20 token on Ethereum, backed 1:1 by BTC.

Wrapped tokens are convenient for cross-chain trading, but they rely on custodians or smart contracts to maintain their value. They don’t play a direct role in maintaining blockchain integrity.

Bitpanda DeFi Wallet and Vision

If you’re diving into the decentralised world with the Bitpanda DeFi Wallet, there’s one token you’ll want to keep an eye on from the start: Vision.

Vision is the native token of Bitpanda’s Web3 ecosystem. That means it’s designed not just to power transactions, but to tie together everything you do across the Bitpanda Web3 experience. Whether you’re swapping assets, earning rewards or exploring new dApps, Vision is the token that supports it all.

Just like you need ETH for Ethereum or AVAX for Avalanche, the Bitpanda DeFi Wallet relies on Vision to cover gas fees on supported networks. It acts as your access pass, letting you interact seamlessly with multiple chains while staying anchored in the Bitpanda ecosystem.

So even if you're trading stablecoins or using DeFi tools, it’s Vision working in the background, making things happen smoothly and securely.

Want to see it in action? Explore what’s possible with Bitpanda Web3. Full control, full transparency – powered by Vision.

Why native tokens are essential for Web3 traders

Whether you're a seasoned DeFi user or just getting started, here’s why native tokens deserve a place in your portfolio:

1. You can’t trade without them

Every time you make a transaction on a blockchain – whether it’s sending crypto, swapping tokens, or interacting with a smart contract – you need to pay a network fee, often called gas fees. And those fees can only be paid using the chain’s native token.

For example, want to move USDC on Ethereum? You’ll need ETH to cover the Ethereum gas fees. Swapping tokens on Avalanche? You’ll need AVAX. Without the correct native token in your wallet, even simple actions won’t work. That’s why traders should always keep a small balance of native tokens in their wallet, as it keeps the engine running.

2. They secure the network

Blockchains don’t run on their own. They’re maintained by validators (in proof-of-stake networks) or miners (in proof-of-work systems) who process transactions and keep the network secure. In return for their work, they’re rewarded with native tokens.

This mechanism ties the value of native tokens directly to the security and stability of the network. The more secure and decentralised a blockchain is, the more reliable it is for traders, investors and developers alike.

3. They often grow with the ecosystem

When a blockchain becomes more popular – thanks to new DeFi protocols, NFTs, games or apps – the demand for its native token usually increases too. That’s because more activity means more transactions, which in turn means more people need the native token to pay fees or use services.

It’s a bit like owning currency in a booming economy. As usage grows, so does the value of the native token, provided the fundamentals are strong. That’s why native tokens often appeal to long-term holders who believe in the success of a particular blockchain.

Final thoughts

Native tokens might not get as much attention as the latest altcoin trend, but ultimately, they’re what actually make blockchains work. Without them, you wouldn’t be able to trade, send, swap or interact with anything on-chain.

They’re needed to pay fees, keep networks secure and make sure everything runs smoothly. And as more people use a blockchain, its native token often becomes more valuable too.

So if you’re exploring Web3, it’s worth knowing which native tokens you’ll need – and why they matter.

The Bitpanda DeFi Wallet and Vision token are built to help you get started, stay in control and make the most of what Web3 has to offer.

Explore more on Web3 with Bitpanda Academy

Want to dive deeper into Web3 and how it’s reshaping the internet? Learn more about blockchain technology, decentralised finances (DeFi) and smart contracts and explore expert insights in the Bitpanda Academy to stay ahead of the next big shift in digital technology!