Utility token vs security token

Because they’re far more like promotional tools and don’t grant ownership stakes in companies, utility tokens aren’t considered investments . Utility tokens can grow in value if what your token represents suddenly becomes very popular and in demand.16 Kas 2021

The ERC20 Ethereum standard is the most common type of utility token using it , companies build decentralized applications on the Ethereum blockchain and launch ICOs using the tokens.

The tokens derive their value from the fact that they will be used to purchase the goods or services offered by the issuer once its project becomes operational . The value of the token is therefore expected to increase with the popularity of the business, thus rewarding early investors.