What Is Utility Tokens?
A utility token is a form of token that can be used to fund or capitalize projects for startups, businesses, or project development groups. EI utility token is a type of token that is used as a safeguard for participation in mass sales to collect funds for a project.
What Are Utility Tokens Used For?
While cryptocurrencies are a type of digital currency, utility tokens are more accurately described as software. They can be used to transfer value, although that isn’t their primary function.
Users may require a specific DEX token to swap tokens on a decentralized exchange (DEX) or engage in any variety of decentralized finance (DeFi) activities. Alternatively, such a token might be used to reward platform users or to pay interest to individuals who deposit funds on the platform, which the platform then lends to borrowers.
Example Of Utility Tokens.
Binance Coin (BNB):
Belongs to the category of “exchange tokens,” or tokens that are unique to a certain crypto exchange’s environment. In the case of Binance, users that hold BNB on the platform receive a 25% reduction on trading fees. Fees are deducted from the trader’s BNB balance rather than being taken in the form of currency or the coin being exchanged.
Basic Attention Token (BAT):
The Brave browser, which is built to be secure and private, works with the BAT token. The Basic Attention Token enables a new advertising income model that eliminates the requirement for continuous user tracking. By opting in to view adverts, Brave users can earn BAT. BAT can then be used to tip website content authors.
Arweave is a decentralized storage network that seeks to retain data indefinitely, including the Permaweb, a permanent version of the web. AR is a utility currency that is used to compensate miners for storing all of the network’s data.
Zilliqa is a decentralized application development platform. For developers, the goal is to make these programs more inexpensive and safe. ZIL tokens can also be used to facilitate digital advertising and in gaming.