I was reading about Weifund crowdfunding. In it, some custom crypto-tokens are provided to investors in exchange for an invested amount. I just want to know how will that investor use that token so that the same also gets the profit of investment? Correct me if I am wrong in any means.
The tokens will have many different use cases, listing "all possible uses" is not possible because the use of tokens is not exhaustive, and there may be clever future use cases of tokens that no-one has thought of yet. However, with that said I will list uses of tokens as far as I know:
Uses For Token
Below I've listed possible uses for tokens.
Stake in project
The project could be a kind of company and the tokens could represent:
- A share in the company
- Voting rights in the company
- Dividend rights in the company
- All of the above
A Deeds of ownership
The project's tokens could represent real world assets / commodities that will maintain / increase in value because of their real world applications. This could be gold (https://www.dgx.io/), uranium, oil, a pile of rocks or a forest of rare trees. The tokens would represent:
- Your ownership of these commodities
A Token of Value
Many projects have internal tokens of value that are used as payment on their platform. The tokens are freely trade-able on the open market and an investor would make money selling the tokens when the market price of the tokens are higher than the buy price.
Not all Tokens are for Profit
I've dealt with the main use cases of tokens in the context of business or with a profit motive. But there many cases where the tokens issues by a fund raising campaign would not hold any immediate value. Also note that not all tokens are transferable, some by design are not.
Tokens of Membership
Each contributor to the campaign would receive a token that would represent:
- Membership of an organisation
- Proof of being a contributor
- Proof of attending an event
The campaign organisers may wish to use the tokens as a way for the funders of the campaign to claim a promise. Perhaps the campaign is to make a special kind of teddy bear, you can claim your own teddy bear by exchanging your "backer tokens" for the special teddy bear.
Like I said, there is no true exhaustive list of what a token can represent or how tokens should be used. At the end of the day tokens are just a number on the blockchain, we use our imagination to pretend that they mean something else.