Get to know Token Migration and how it works

Bittime - Token migration is the process of moving tokens from one blockchain to another blockchain. This process is often necessary when a crypto project decides to switch to a different infrastructure that better suits its needs or goals, such as increased scalability, security, or new features.

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What is Token Migration?

Token migration or also known as token exchange or conversion is the process of transferring tokens from one blockchain or protocol to another blockchain or protocol. This usually occurs when a crypto project undergoes a significant upgrade, such as a transition to a new blockchain platform, implementation of a new consensus mechanism, or introduction of improved features. 

During token migration, old token holders are required to exchange them for new tokens based on a predetermined conversion ratio. This process is typically facilitated through specific instructions provided by the project team, which may involve using a designated  crypto wallet and participating in a smart contract-based exchange or utilizing an exchange platform that supports migration.

Token migration aims to ensure a smooth transition of value and functionality from old tokens to new tokens while maintaining continuity for users and stakeholders in the ecosystem.

How Token Migration Works

The most concrete example of token migration, namely Mithril (MiTH) which was migrated from Ethereum to Binance Chain. Since many new projects do not have their own blockchain or are still in the development stage, they choose to migrate their investor tokens from third-party platforms to their own chains and that is when token migration occurs.

Many early crypto projects and companies used Ethereum's ERC20 tokens in 2018. However, once their blockchain was ready, the tokens were migrated to their native blockchain. One of the advantages of this method is that investors do not need to lock up these funds. Instead, they may trade these placeholder tokens on exchanges while new projects are developing the technology.

Transfer of tokens from one third-party blockchain to another is also possible due to technical or economic factors. Often, blockchain efforts begin with the release of a white paper promising future technological breakthroughs. The journey from designing a paper to a finished product usually requires many twists and turns and some projects substantially change the concept, such as moving to another blockchain. 

Investors may be required to migrate to cryptocurrencies or tokens in certain situations. This requires moving token holder balances from one blockchain to another.

Token migration involves transferring an investor's balance from their Ethereum wallet to a new wallet that is compatible for a specific project. Therefore, tokens actually move from one blockchain to another once the transition occurs.

An initial coin offering ( ICO ) is a form of fundraising strategy in which a project creates tokens that can be purchased by anyone who wishes to participate in the future progress of the business, which is generally detailed in a whitepaper.

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For example, the ICO boom occurred in 2018 on the Ethereum network and used ERC-20 tokens. Some of these projects suggest that the tokens purchased by investors will be used in future technologies, such as the blockchain they plan to build.

After completing their own blockchain, the project transfers their investors' tokens from Ethereum to their own chain. This is similar to the difference between renting a car and buying the same car for long-term use.

Token transfer techniques vary depending on the project. You may be asked to initiate the migration yourself if you store tokens. However, this does not mean that you have to understand the ins and outs of programming. Most projects offer a method that links to your wallet address and allows you to move tokens in seconds.

If the tokens are held on a large, well-known cryptocurrency exchange, they will probably manage the token transfer for you.

With the continued push for blockchain integration and adaptability, the practice of migrating tokens – especially those that can operate across multiple chains – will likely expand and gain popularity in the emerging blockchain ecosystem.

How to Buy Crypto on Bittime

You can buy and sell crypto assets in an easy and safe way via Bittime . Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti. 

To be able to buy crypto assets on Bittime , make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application. 

Monitor price chart movements of Bitcoin (BTC) , Ethereum (ETH) , Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.

Also Read:

ERC-827, a Solution to Overcome ERC-20 Limitations

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What is a Security Token Offering?

DISCLAIMER : This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.