What Is the “Securities Life Cycle” Concept for Tokens?

The securities life cycle concept suggests that a token's regulatory classification can change over time. A token may start as a security during its initial fundraising phase (reliant on the founders' efforts), but as the network matures and becomes sufficiently decentralized, it may transition into a non-security (utility) status.

This concept acknowledges the evolving nature of blockchain projects and is often cited in discussions about a regulatory 'safe harbor.'