Description: A utility token is a type of cryptocurrency that provides access to a product or service within a blockchain ecosystem. Unlike security tokens, which represent an investment in an underlying asset, utility tokens are designed to be used within a specific platform. These tokens allow users to interact with decentralized applications (dApps), access services, pay transaction fees, or participate in network governance. Their value is intrinsically linked to the utility they offer within the ecosystem, meaning their demand can fluctuate based on the adoption and use of the platform. Utility tokens are fundamental in the realm of decentralized finance (DeFi) and non-fungible tokens (NFTs), where they enable users to access various digital products and services. Additionally, in proof-of-stake (PoS) systems, these tokens can be used to validate transactions and secure the network, which in turn can generate rewards for holders. In summary, utility tokens are a key piece of blockchain infrastructure, facilitating interaction and access to a variety of digital services and products.
