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Utility Token
A utility token is a type of cryptocurrency token that provides users with access to a product or service within a specific blockchain-based platform or ecosystem. Unlike security tokens, which represent ownership or equity in a project, utility tokens are not designed to be investment vehicles but are intended to offer functional use cases within a platform. Utility tokens can be used for various purposes, such as paying for transaction fees, participating in governance decisions, or accessing premium services. For example, Binance Coin (BNB) is a utility token used to pay for transaction fees on the Binance exchange, as well as to participate in Binance's decentralized exchange (Binance DEX) and other services within the Binance ecosystem. Utility tokens are essential in blockchain ecosystems because they create a method for users to interact with decentralized applications (dApps) and platforms while maintaining decentralization.
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