Cryptocurrencies and crypto tokens are both digital and virtual assets that exist on the blockchain network.
Although, they may share some similiarities, they serve different purposes and clear characteristics.
Crypto-currencies otherwise called crypto coins, primarily functions as a medium of exchange, to store value, as a form of investment, as means of payments and can be used for easy peer-to-peer transactions.
Meanwile, Crypto tokens are basically tokenized (or to put it in simple terms), they are built on the blockchain of an existing cryptocurrency. They are mostly used to gain access to decentralized applications (DApps), voting rights, loyalty points, fundraising in initial coin offerings (ICOs), and representing physical assets and various other use cases depending on what they are associated with.
Both cryptocurrencies and crypto tokens use cryptography for security, but cryptocurrencies operate on their own independent blockchain networks, while tokens are created, issued and rely on the underlying blockchain’s infrastructure.
Examples of cryptocurrencies are Bitcoin (BTC), Ethereum(ETH), Ripple(XRP) and a thousand others. Although, Ethereum (ETH) is the most common cryptocurrency used in web3, there are also popular tokens built on other existing blockchains are Raydium(RAY) on the Solana network, PancakeSwap (CAKE) on the Binance Smart Chain (BSC) network and DAI Stablecoin (DAI) on Ethereum (ERC-20) network.
Cryptocurrency uses in web3: Exchange, payments, token sales and crowdfunding, decentralized finance (DeFi) protocols without relying on centralized institutions e.t.c. Crypto tokens uses in web3: DApps access and usage, decentralized exchanges (DEX), utility, security,Non-fungible tokens(NFTS), Governance (i.e the decision making process concerning the development of a dApp or protocol.
Both assets can be gotten through purchase, airdrops, ICOs, mining e.t.c .
In summary, cryptocurrencies and tokens designed to enable and work with other features within the web3 ecosystem. They offer exposure to the web3 era. Just like blockchain networks, without this, web3 wouldn’t exist.