What Is the Primary Function of a Utility Token versus a Security Token?

A utility token is designed to provide access to a product or service within a specific network or ecosystem. Its value is derived from its usability, not from speculation on the efforts of the issuing entity.

A security token, conversely, represents an investment contract, such as ownership, dividend rights, or a share in future profits. Its primary function is to represent a financial interest in the underlying asset or enterprise.