What Is the Primary Difference between an American and European Style Option in a Tokenized Environment?

The difference lies in the exercise window. A tokenized American option can be exercised by the holder at any time up to and including the expiration date.

A tokenized European option can only be exercised on the expiration date itself. This distinction is enforced by the smart contract's code, which dictates when the exercise function can be called, mirroring traditional finance rules.