main logo

Utility Token

/juːˈtɪlɪti ˈtoʊkən/noun

A utility token is a cryptocurrency that is designed to represent a certain unit of utility or value within a specific ecosystem or platform.

Utility tokens are usually created to provide access to a particular product or service, such as

  • the ability to buy goods or services
  • access to special features
  • voting rights within a community

Utility tokens derive their value within the platform or ecosystem for their intended use. This is contrary to cryptocurrencies such as Bitcoin because utility tokens do not hold any intrinsic value on their own.

Thus, the value of a utility token may fluctuate depending on the demand for its product or service.

Copyright DefiDive © 2024