KIP7 establishes the implementation of a standard API for fungible tokens within smart contracts. KIP7 as a token standard is heavily derived from ERC20, the Ethereum standard interface for fungible tokens. To issue fungible tokens on top of Klaytn, the KIP7 standard specification must be implemented.
KIP7 tokens are used to establish the in-built currency of a metaverse. These tokens are digital assets that can be used as a means of exchange and a store of value. They enable users to participate in trade, exchange, and other virtual economic activities within the metaverse.
Similar token standard standards are used for various popular metaverses such as Decentraland and Axie Infinity to manage the trading of land, avatars, real estate, and other digital assets. Decentraland's native token, MANA, powers the purchase and sales of everything on Decentraland while SAND, Sandbox's native token, powers their metaverse likewise.
In summary, the KIP7 token standard is essential for implementing fungible tokens that can be used to pay for goods and services in metaverse applications, such as virtual real estate and tickets.