TL;DR: From rare collectibles to electric cars, football clubs to smart cities, native assets have the power to transform industries and economies – and the concept and exchange of value itself. When IOTA’s Digital Asset framework is released, digital assets will become even more ubiquitous due to the network’s zero-fee based architecture.
The Digital Asset Framework is one of the most eagerly-awaited features on IOTA. In this post we will examine the use of native assets. But first we must clear up some confusion. What exactly do we mean by “native assets”?
Many different names have been used for digital assets on IOTA, causing confusion. This will only get worse in the future when there are both Layer 1 and Layer 2 assets. We have therefore revised our terminology to simplify things going forward.
Types of IOTA Digital Assets
The umbrella term for all assets on IOTA is digital assets.
These assets may exist on Layer 1 (the IOTA mainnet, as customized IOTA tokens), or on Layer 2 (within smart contract chains). To differentiate these asset classes we use two different names:Layer 1 assets are termed native assets, as they are native to the IOTA mainnet. Layer 2 assets are termed smart assets, as these exist on the smart contract layer, and have greater programmability.
The process of creating either type of digital asset is known as minting.
Notes:The terms asset and token may be used interchangeably (i.e. native asset, native token, smart asset, smart token). For example, if you are referring to a piece of artwork, you would probably call it an asset, but if you are referring to WenCoin, you would probably call it a token. For the more technically-minded readers, a variable name change will also be made in the native assets’ codebase, as well as in future wallet and library implementations, with the “color” field being replaced by a “tag” field.
What are native assets?
A native a...