Utility Token

Utility tokens provide access to a product/service and/or represent the right to use a product/service or function of a project.

Utility tokens are digital vouchers that guarantee their holder (owner) access to a platform and/or the use of functions on it. Contrary to security tokens, utility tokens usually cater to a blockchain use case, e.g. a purpose-bound service.

Such could be the unlocking of certain functions or areas within a Blockchain application or app, or the authorization to redeem credits or rewards. Another difference to security tokens (which are digital securities) is that utility tokens are not allowed to contain any financial incentive according to the U.S. Securities and Exchange Commission (SEC); issuers are therefore not allowed to offer investors any kind of return on investment.