What Is the Difference between “Utility” and “Value Accrual” for a Token?
Utility refers to the functional use of a token within its native protocol (e.g. governance, paying fees, staking). Value accrual refers to the mechanism by which the token captures a portion of the economic value generated by the protocol (e.g. fee sharing, burn mechanisms).
A token needs strong utility to generate protocol value, and effective value accrual to translate that value into intrinsic worth for the token holder.
Glossar
Value Accrual
Derivation ⎊ Value accrual, within cryptocurrency and derivative markets, represents the quantifiable increase in an asset’s worth attributable to underlying network effects, protocol improvements, or the generation of yield from staked assets.
Value Accrual Mechanism
Capture ⎊ This mechanism describes the specific on-chain or protocol-level process by which fees generated from network activity, such as transaction fees or derivative premiums, are directed back to token holders or the system treasury.