What Is the Difference between a Security Token and a Utility Token in a DCF Context?

A security token represents an ownership stake in an underlying asset, like equity or a debt instrument, making its cash flows more directly comparable to traditional assets, often via dividends or profit share. A utility token's value is derived from its use in accessing a service, meaning its "cash flow" is indirect, linked to the demand for the service and the fees generated.

Security tokens are easier to value with DCF as their cash flows are more predictable and legally defined.