Utility Tokens
Utility tokens are a type of cryptocurrency or digital asset that provide access to a specific product, service, or functionality within a blockchain-based ecosystem. They are not primarily designed as investments but rather to enable interactions, such as paying for transactions, accessing features, or participating in governance. Unlike security tokens, they do not represent ownership stakes but serve operational roles in decentralized applications (dApps) and platforms.
Developers should learn about utility tokens when building or integrating with blockchain applications, as they are essential for creating tokenized economies, incentivizing user behavior, and enabling decentralized governance. Use cases include powering dApps (e.g., for in-app purchases), facilitating staking in proof-of-stake networks, and managing access to platform-specific services like cloud storage or computing resources. Understanding utility tokens is crucial for roles in DeFi, Web3, and crypto projects to design tokenomics and smart contracts effectively.