What is Utility Token?

Utility tokens are used to access a service offered as a benefit to users. Users who own these tokens can access services offered exclusively to them. In this article, you can find the answer to the question of what a utility token is.

What is Utility Token?

Utility token contributes to project developers to finance their projects and to find resources to develop their projects. Users can access services offered by project developers through utility tokens. It is aimed to offer benefits that users cannot have with money. It is aimed to increase the loyalty of investors towards their tokens. It is tried to create a kind of loyalty program for investors. Utility token holders have the privilege of accessing these services offered exclusively to them by the project owners. Utility tokens are often offered for sale as ICOs.

You would find more detailed information about ICOs from What is ICO (Initial Coin Offering)? article.

Why Are Utility Tokens Needed?

Project owners use utility tokens to improve their projects for finding funds for their projects. Utility tokens support the financial development of projects as well as users can benefit from project services with their utility tokens by accessing specific products and services.

How Does Utility Token Work?

Utility tokens do not have their own blockchain. They are developed on existing blockchains. Utility tokens are often offered for sale as ICOs and users can have these tokens at a low price. Project owners create resources for the future of their projects with ICOs. Utility token investors have the privilege of accessing special services offered by project owners.

Differences Between Security Token and Utility Token

Security tokens and utility tokens have different purposes. Utility tokens provide access to a project’s service. Utility tokens are not produced for investment purposes. It helps to create a loyalty program for users. Security tokens are supported by real assets and subject to security laws.

You can find more detailed information about security tokens from What is SecurityToken? Article.