Do you know the differences between utility tokens, coin tokens and security tokens? Recently, the Chiliz token has caught the market’s attention by a significant valuation and this is a very current example of a utility token.
Chiliz, for example, is a type of utility token called a fan token. Associated with soccer teams, its holders can vote on the team’s uniform, choose the stadium’s music, challenge the players and even have access to who will be sitting on the bench, just like the most fanatical fan. The token is the fuel of the Socios.com platform and is an evolution of the clubs’ fan-partner program.
The app for Google Play and iOS of the Socios.com platform works like a wallet. In fact, it is through this app that fans can vote on the options given by the clubs. These, in turn, offer products and services to the token holders.
Chiliz is for sale on the Binance, Huobi Global, OKEx, Upbit, and HBTC exchanges.
Utility tokens have… a utility
Therefore, utility tokens are simply coins with specific applications. They give future access to the products or services offered by a particular company. Therefore, utility tokens are not speculative assets.
Another example of a utility token is BRZ, the first stablecoin pegged to the Brazilian real, which will allow Brazilians to access international exchanges without being exposed to the bitcoin. But there are several others, such as ether, neo, and dash. Ether allows transactions to be made with smart contracts on the Ethereum blockchain.
+Read also: 6 newly released stablecoins projects worldwide
Utility tokens are not a security or financial asset. As such, they do not suffer interference in its issuance or operation by the Securities and Exchange Commission (CVM) or any other equivalent body in the world.
This type of token can be issued, for example, by a company that is going to release an electronic game months later and accept these tokens as payment for services or products that it develops.
Coin tokens are used as if they were money
Coin tokens or digital currencies are generally used in the same way that a real-life currency is – just as money. You can think of coin tokens like bitcoin, litecoin, and monero as the coins in your wallet or piggy bank. For the most part, they serve no other purpose – unlike utility tokens – than to be used as money.
For example, coin tokens can be used to:
- – To transfer money
- – As a store of value
- – As a unit of account (for example: you can price products in bitcoins)
Security tokens are subject to federal laws
Security tokens are digital assets whose value is derived from an external asset that can be traded. Therefore, these tokens are subject to federal laws governing securities. Failure to comply with these regulations can result in serious consequences, including penalties and potentially preventing a project from continuing to be developed.
On the other hand, security tokens can offer a wide variety of applications if the issuer meets all regulatory requirements. The most promising of these features is the ability to offer tokens digitally representing a company’s shares.
In short, security tokens are investment or speculation assets. Therefore, they are intended for investors who expect an appreciation in the value of these assets. Holders can receive, for example, dividends on their investments in the form of additional tokens.
Were you able to understand the differences between coin tokens, utility tokens and security tokens?