Blockchain & Cryptocurrency Glossary

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Share Token

1 min read
Pronunciation
[shair to-ken]
Analogy
A share token is like a stock certificate in a company, granting ownership rights and dividends.
Definition
A token representing fractional ownership or voting shares in a DAO or protocol, analogous to corporate shares.
Key Points Intro
Share tokens enable decentralized equity via:
Key Points

Ownership representation: Denotes stake in protocol assets.

Voting rights: Used in governance decisions.

Dividend distribution: Can receive protocol revenues.

Transferability: Shares can be traded peer‑to‑peer.

Example
A DAO issues share tokens to contributors; token holders vote on treasury allocations and receive a share of protocol fees.
Technical Deep Dive
Share token contracts extend ERC‑20 with `mint()` for contributions and `distribute()` to send dividends. Governance module reads `balanceOf` for vote weighting. Snapshot mechanism records shares at proposal creation.
Security Warning
Regulatory scrutiny may treat share tokens as securities; ensure compliance.
Caveat
Regulatory classification can vary; legal advice recommended.
Related Terms
Governance Token
ERC‑20

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