What Is the Role of a Smart Contract in Issuing a Utility Token?

Smart contracts are self-executing contracts with the terms of the agreement directly written into code. For utility tokens, a smart contract, often based on standards like ERC-20 on Ethereum, defines the token's total supply, its name, and the rules for its transfer.

The contract automates the issuance and management of the token without needing a central authority. This ensures transparency and immutability.