What is Token Migration?
Let's find out Token Migration meaning, definition in crypto, what is Token Migration, and all other detailed facts.
Token migration, sometimes also referred to as token swaps, is the process of transferring a token from one blockchain to another during a changeover. While some token migrations occur at the launch of new blockchains, in other cases, tokens are moved if a blockchain project is overgoing a protocol change.
Token migrations occur whenever a project transitions from one blockchain to another to ensure that all assets are transferred. A well-known example is the migration of Mithril (MiTH) from Ethereum (ETH) to Binance Chain (BNB).
Ethereum allows users to develop a number of token standards, the most popular one being ERC-20. Around 2018, it was common for new crypto projects to create an ERC-20 token which they would later migrate to the fully developed native blockchain. This token migration method was favored for its technical and economical advantages.
The developers of new initial coin offerings (ICOs) would first create an ERC-20 token with the promise that it would be utilized in the final product. Once the project was funded, the tokens would migrate from Ethereum to the new native blockchain.
The project roadmap outlined in the whitepaper may not always be reflective of the actual development. Projects may overgo a number of changes throughout the process, including migrations to different blockchain systems. During the migration process, the token balance is moved from the initial crypto wallet used for storage to the new compatible wallet address.
The process of token migration has been made relatively simple. Many projects allow cryptocurrency wallets to be linked for users’ convenience. The tokens can then be converted and transferred to a compatible wallet address. Furthermore, cryptocurrency exchange platforms can deal with the conversion on their end, simplifying the process even further.
As there is an increasing number of interchain projects, as well as protocols concerning blockchain integration, the number of token migration processes is likely to increase.