Utility token

A utility token is a type of cryptocurrency token that provides access to specific services, products, or features within a blockchain project’s ecosystem. It is not classified as a security since it does not represent company ownership or rights to profits. For example, a utility token can be used to pay transaction fees, obtain discounts, vote in decentralized applications (dApps), or unlock exclusive platform features.

Due to their functionality, utility tokens are widely used in Web3 projects, such as decentralized exchanges, blockchain games, or cloud platforms. Their value depends on the demand for the services provided by the ecosystem, making them highly volatile. While utility tokens are generally not subject to the same regulations as security tokens, some jurisdictions may classify them as securities if their structure resembles an investment.