What is the purpose of a utility token?

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by alan , in category: Cryptocurrencies , a year ago

What is the purpose of a utility token?

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1 answer

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by mandy , 10 months ago

@alan 

The purpose of a utility token is to provide access to a specific product, service, or platform. These tokens are typically issued during an initial coin offering (ICO) by a company or project to raise funds for developing their product or service. Unlike traditional cryptocurrencies, utility tokens do not function as a store of value or medium of exchange, but instead serve a specific utility within a particular ecosystem. Utility tokens grant users certain rights or benefits within the platform, such as access to features, discounts, rewards, or the ability to participate in certain activities.