Track 5 · Tokens · lesson 1

ETH is not a token

7 min

ETH is built into the protocol. Every node tracks every balance natively, and sending it is a field on the transaction itself.

A token is none of that. A token is a mapping inside somebody's contract.

Vault.solComplete

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One of these moves real value. The other invents a number.

Run the code to see what happens.

Nudge

One function has a value attached to the call. The other has an argument.

Show me the approach

`msg.value` is ETH that genuinely arrived. `amount` is a number someone typed.

Show me the code

`ethDeposited[msg.sender] += msg.value;` and `points[msg.sender] += amount;`.

Explain the solution

The last test is the whole lesson: a million points cost nothing and the contract holds zero ETH. Tokens are entries in a mapping — their value comes from what people will trade for them, never from the contract.

Look at the last test again. A million points, and the contract holds zero ETH.

Nothing stopped you inventing those points, because there is nothing to invent from. A token contract can mint a trillion units in one line. The scarcity — if any — is a rule its author chose to write, not a property of the chain.

Which is why "is the supply capped?" is a question about source code, and why an unverified token contract is unanswerable.

The practical differences

| | ETH | ERC-20 token | |---|---|---| | Tracked by | the protocol | one contract's mapping | | Sending | a transaction field | a function call | | Received by a contract | needs payable | needs nothing | | Approval needed | never | for anyone spending on your behalf | | Can vanish | no | yes, if the contract says so |

Predict

Why does sending a token cost more gas than sending ETH?

Because it writes two storage slots in a contract, instead of updating protocol-level balancesBecause tokens are worth moreBecause token transfers need approval first

What a token is worth

Nothing, inherently. A token contract confers no rights, no claim and no obligation on anybody. Its value is entirely what other people will exchange for it.

That is not cynicism — it is the same for any currency. The difference is that here you can read the exact rules governing supply, and you should.

Check

A token contract's author adds a function that sets any balance to zero. Is that allowed?

Yes — a token is whatever its contract says, and nothing prevents itNo, ERC-20 forbids itOnly if holders vote for it

Worth remembering

ETH is protocol-native; a token is a mapping inside one contract.
Token transfers cost more gas because they write contract storage rather than protocol balances.
A contract needs `payable` to receive ETH but nothing special to receive tokens.
Supply rules are whatever the source code says — which is why verification matters.
WETH exists so protocols can treat ETH as an ordinary token.