Understanding CashTokens - What New the next May Upgrade will Bring To The DeFi BCH ecosystem

Before developing the article, and for a better understanding of the matter at a technical level, better read Jason Dreyzehner 's blog , aka bitjson, security developer and one of the "big thinkers" Of CashTokens.

Unfortunately, not everyone will immediately understand what CashTokens is about, but here I will try to make you understand what the system that will be introduced next months in May will bring to the Bitcoin Cash ecosystem. According to the blog, CashTokens will enable decentralized applications to be deployed on-chain on the Bitcoin Cash Blockchain.

CashTokens will allow two tokens to be created on top of Bitcoin Cash, Fungible and non-Fungible Tokens, the famous NFTs to interact with decentralized applications.

So far everything is still vague for many (so try to understand), because in the past it was possible to create tokens on top of Bitcoin Cash using SLP technology.

So what changes with CashTokens Version 2?

It is important to remember that CashTokens will revolutionize the Bitcoin Cash space as it will complete Bitcoin Cash in a more economical approach allowing devs to create a completely new infrastructure to interact with the new primitive tokens that will be created and bring the DeFi space to life on Bitcoin Cash.

Unlike Ethereum or even smartBCH, CashTokens will have to create a new structure to accommodate the new protocol, among wallets with support for the technology as well as derivatives that may arise from the creation of a circulating economy where, for example, people or organizations can create tokens and trade within the Bitcoin Cash ecosystem using established marketplaces within the protocol.

You see, while Ethereum uses the Ethereum virtual machine to access and bring decentralized finance to life where it can be done for example, fork to other chains or side-chain like SmartBCH and using an exact "copy" of the original, changing only a few functionality guidelines, in CashTokens this possibility changes completely! The Bitcoin Cash virtual machine (VM) that will make CASHTOKENS come to life has the same functionality as Ethereum or SmartBCH, but it will need a technological innovation where techniques will be used to deploy on-chain DeFi smart contracts on Bitcoin Cash.

Still lost, don't!

CashTokens will be a huge upgrade that will turn an amount of things possible on the BCH main chain, basically, anyone can use tokens on Bitcoin Cash to do things such as Decentralized Exchanges and more things regular people assume that only networks like Ethereum can do.

Bitcoin Cash virtual machine (VM) will work very differently, with similar functionalities, from Ethereum/EVM chains though, so new infrastructure will have to be built. Side-chains such as SmartBCH are Ethereum are forked where could easily copy-paste applications and contracts and are ready to go which won't happen with CashTokens that need a whole new infrastructure without changing the Bitcoin Cash fundamentals.

Another up-side is that it CASHTOKENS scales very well and fees won't go up even when usage is crazy on the network, also will be decentralized, fast, cheap enabling more people to participate in DeFi ecosystem.

CashTokens is a premium for all users and builders who believe in the Bitcoin Cash which didn't stop them to improve and work hard to bring DeFi capabilities into Bitcoin Cash. Those capabilites doesn't sacrifice the fundamentals behind BCH and a whole new infrastructure built for CashTokens won't interfere in the Blockchain.

Also all transactions will be miner-validated, preventing for example, to rely on centralized entities that could anytime run with people funds (evidence, SmartBCH trusted CF and funds a hostage by the exchange).

It is an opportunity for builders to put their skills to work and build a strong ecosystem, allowing this space to be accompanied, in addition to tokens and primitive NFTs, building more tools such as Decentralized Exchanges (example Uniswap Market Maker), Lending Platforms, NFT marketplace and much more that make the Bitcoin Cash network user enjoy a DeFi ecosystem paying 1000x less than the popular Ethereum network.

Not only builders will have the pleasure of creating tools to interact with CASHTOKENS, but also users will have opportunities to test innovative products provided on-chain such as financial products, tokenization of brands, residency and much more making it even possible to create a metaverse in the crypto space Bitcoin Cash DeFi.

There's a whole new world to be explored using CASHTOKENS that could lead to a massive usage of the Bitcoin Cash network, increasing popularity among traders, speculators, builders, or even by people who decide to steo in to enjoy the new possibilities brought by the protocol.

The new Cash Improvement Proposal will definitely open a more wider DeFi experience on top of Bitcoin Cash for everyone to enjoy the ecosystem.

If you are a builder, stay tuned for the May 2023 upgrade, and if you are a user, be prepared to use the products and tools that CashTokens will unleash.

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