What Is the Legal Difference between a “Pre-Functional” Token and a “Consumptive Use” Token?

A "pre-functional" token is one that is sold before the underlying network or product is fully operational, meaning the token currently has no real utility. This token is highly likely to be classified as a security under Howey because investors are relying entirely on the promoter's future efforts.

A "consumptive use" token, conversely, is one that is already being actively used to access a service or product on a functional network. This distinction is critical because the presence of consumptive use significantly weakens the "expectation of profits" prong of the Howey Test.