Differences Between Governance and Utility Tokens

Cryptocurrencies often start with a purpose before becoming subjects of financial speculation on exchanges

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The two common types of tokens are governance and utility tokens

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Governance tokens are issued by DAOs or projects with DAOs, allowing holders to vote on improvement proposals

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Utility tokens, on the other hand, are application tokens used in a project's system

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DeFi platforms use utility tokens creatively, from fueling attention economies to serving as the only acceptable payment option for services

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Governance tokens represent stakes in administration, while utility tokens act as gateways to technology or services

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Both governance and utility tokens operate on the blockchain and hold financial value

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