What Is the Difference between a Utility Token and a Security Token? ⎊ Path

What Is the Difference between a Utility Token and a Security Token?

A utility token is designed to provide access to a product or service within a blockchain ecosystem, like paying for network fees. A security token represents an ownership stake in an asset or enterprise, similar to a traditional stock, and is subject to securities laws.

The distinction often hinges on whether the token's value is derived from its use or from the expectation of profit based on the issuer's efforts.

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Glossar

Utility Token

Framework ⎊ A utility token, within the context of cryptocurrency, options trading, and financial derivatives, represents a digital asset designed to provide access to a specific product or service within a defined ecosystem, increasingly intertwined with sustainability initiatives.

Security Token

Provenance ⎊ Security Tokens, within the context of cryptocurrency and financial derivatives, represent a digitized form of ownership rights, typically in an underlying asset, and their verifiable history is paramount for establishing trust and regulatory compliance.