What are Utility Tokens and ICOs?

Utility tokens are used for initial coin offerings (ICOs) and give buyers the opportunity to financially support a particular tech start-up. This is the way an upcoming blockchain project is usually funded.

ICOs, like IPOs, are the activity when the selected coin is offered to public sales for the first time. It is used to raise the initial capital for development of a token or new blockchain technology.

The Different Ways to Use Utility Tokens

In most cases companies use utility tokens to generate interest in their service and to enable their usage in the blockchain ecosystem. The tokens can be used on a platform to redeem a particular service or obtain special status. However, utility tokens do not provide investors with a real share of a company’s monetary ownership.

Such tokens may grant holders the right to use the network, as in the case for Filecoin, which allows users to access decentralized file storage, or Axie Infinity, where the AXS token permits players to join the game. Utility tokens may also be used to confer loyalty benefits and rewards, as with the EQO token with which EQONEX users can accumulate more EQO tokens by performing trades on the exchange or through staking and lending. BAT aims to use blockchain technology to improve digital advertising security, fairness, and efficiency. The plan is to create a blockchain platform that would assist content creators of all kinds in discovering more equitable ways to earn money.

What is the Future of Utility Tokens?

Blockchain technology is developing quickly and has grown exponentially in recent years. We believe utility tokens will be a key to future development of the metaverse and cryptocurrencies. They will be used ever more frequently in ICOs and technology start-ups.

If you would like to become part of an ICO, regularly check the information about new projects and participate in the initial offering.

Frequently Asked Questions

Below are simple answers to some of the most asked questions about utility tokens and the technology which supports them.