By Categories: ICP, Internet Computer1.8 min read

Learn More about the ICP Token

The following is a brief introduction to the ICP token. For a detailed overview of the token, have a look at What is the ICP Token.

Internet Computer Protocol tokens (ICP) are the native utility token of the Internet Computer. The token enables users of the IC to participate in the ecosystem and to govern the blockchain network of the Internet Computer.

Functionality of the ICP Token

Let’s have a locale of the ICP token is used in the Internet Computer ecosystem:

Governance

Participating in the Internet Computer’s governance is possible by staking ICP in Neurons.

Cycle Conversion

ICP can be converted into cycles.
The IC’s canisters (computational units, i.e. smart contracts) are powered by these cycles.

Staking ICP

The ICP token can be staked in Neurons, allowing you to earn rewards and to participate in governance.

Transactions

Any kind of transaction on the IC is powered by ICP tokens, ranging from transaction fees for transfers to exchanging ICP for other assets

User Groups

There are different user groups who utilize the ICP token for various purposes, in dependence on the use case. Let’s have a look at each user group and how they use the ICP token:

Developers

Developers or entrepreneurs that build on the IC use ICP tokens to convert them into cycles. These cycles are then used to pay for running canister smart contracts that power the decentralized applications running on the IC.

Community Members

Members of the community wishing to have an active say in the governance of the Internet Computer lock up their ICP tokens by staking them in neurons. Doing so allows them to submit and vote on governance proposals.

Node Operators

Node providers power the Internet Computer by offering computing power required to support dApps running on the IC. In exchange for providing compute capacity, node operators are rewarded with ICP tokens.

Neuron Holders

Neuron holders are individuals that stake their ICP tokens to participate in the governance process of the IC by submitting and voting on proposals. As a reward, neuron holders receive ICP tokens.

The token value may fluctuate depending on supply and demand. For this reason, tokens are not directly used to pay for resources on the IC.