CUTcoin Token is the named entity representing a specific value. Once created, token can be owned or sent to another owner. No token duplicates (tokens with the same names) are allowed.
CryptoNote Tokens implemented in CUTcoin is the extention of CryptoNote protocol that allows creating and manipulating named tokens. Tokens are very similar to the coin itself, and that's one of their advantages: well known and time proved protocol that guarantees reliable privacy and security. The only place where the information about tokens is stored is the CUTcoin blockchain, and this means no additional centralization were brought.
Tokens have unique names and the corresponding unique ids. CUTcoin id is 0 (zero). Each transaction output in the system has its id, and it's not encrypted, so users can see it. When a transaction with tokens has been sent, somebody can note that the tokens with specific id are circulating, but the sender and receiver are not known due to one time addreses protocol. Transaction amounts are also hidden thanks to Ring Confidential Transaction (RCT), so overall privacy is not worse than CUTcoin's one.