Taxonomy is a system of organizing and classifying things based on their similarities and differences. This process of categorization can be organized into a hierarchy, with the broadest categories at the top and more specific categories at the bottom.

An example of Taxonomy is the Linnaean system. This system involves grouping and categorizing species based on their biological characteristics, such as anatomy, physiology, genetics, and evolutionary history.

A token is a digital asset that can be created to give another asset a value. That means a token can be used to represent almost anything. For instance, a token called SCEUR could represent a token used to pay with a fixed known value.

Alternatively, a token called MACHINE could be a token used to represent the ownership of the machine. The machine has properties like production date and weight. These properties can be added to the ownership token through a schema when created on the blockchain. A schema is a specific taxonomy for a class of tokens.

A standardized taxonomy provides a token on a blockchain with more meaning than just a code and allows a token’s properties to be added to a token at the creation stage. Since the token properties cannot be changed once issued on the blockchain, the attached taxonomy provides proof the token’s specifications have not changed since creation.

How Token Taxonomy in NEXUS works

Before adding taxonomy to a token, one needs to define the standard the token taxonomy must adhere to, called a schema.

Upon creation of the token in NEXUS, one specifies the taxonomy schema, along with a set of properties. These properties are validated against the schema, and if valid, hashed. One can also add an asset URL to the token’s taxonomy. This URL can refer to a webpage describing the asset or contain a JSON representation of the token properties.

The hash of the taxonomy is stored and encoded as a token property on the blockchain. It is then possible to verify that a token’s characteristics have not been changed by recalculating the hash, and that is what makes taxonomy so important!

The NEXUS token taxonomy functionality is available for the Stellar and Algorand ledgers.

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Henri de Jong

Chief Business Development Officer

Quantoz N.V.
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    Published On: February 13th, 2023 / Categories: Publications / Tags: , /

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