Token Utility Driving Web3 Ecosystem Growth and Key to Enduring Value for Digital Assets

• Value increases with demand, so it’s critical for cryptocurrency investors to comprehend what a token truly provides.
• The most well-known utility tokens may become very valuable as the Web3 ecosystem develops and grows, increasing their value.

Since 2009, when Bitcoin first appeared on the market, thousands of other cryptocurrencies have also emerged, many with more creative designs. Newer coins like ETH, BNB, BST, BAT, and MANA have much more utility, serving a variety of purposes within an expanding Web3 ecosystem, whereas Bitcoin and the initial alternatives were created purely as a form of payment mechanism.

Since people need crypto tokens to access a variety of applications, goods, and services, this utility may contribute to an increase in demand for them. Value increases with demand, so it’s critical for cryptocurrency investors to comprehend what a token truly provides to its users and the types of use cases it supports.

Utility tokens serve a number of purposes, including payment methods, voting rights, decentralized network access, and blockchain representation of real-world assets.

What are Utility Tokens?

We may describe utility tokens as those cryptocurrencies that can be helpful in Web3 ecosystems since the word “utility” is derived from the word “useful.” In contrast to conventional cryptocurrency tokens, utility tokens allow their holders to use the features provided by the projects they support.

Tokens such as Bitcoin or Litecoin (LTC), for example, are just digital currencies that serve as a store of value, a means of exchange, or a unit of account. They may be kept as investments, exchanged on cryptocurrency exchanges, or used to buy goods and services. Their usefulness essentially stops there.

On the other hand, utility tokens cover a lot more ground. In essence, they are digital assets that, on a blockchain network, provide holders access to a certain product or service. They are not meant to be used as a form of payment or as a general currency like conventional cryptocurrencies. Instead, they allow holders to make certain actions or gain access to a network. They’re used to pay for services and transaction fees, vote on issues of governance and get access to other, premium features within that network.

This is what allows utility tokens to provide greater value and drive more involvement in blockchain ecosystems, while encouraging more community engagement. Because utility tokens enable specific functions and offer incentives to users, they can enable more advanced decentralized applications and business models.

Different uses for different tokens

To understand how various tokens give usefulness, we may look at several instances. We may start with the Blocksquare Token, or BST, which is the principal digital asset of Oceanpoint, a DeFi portal for Blockquare’s tokenized real estate ecosystem. It’s a really useful asset. By depositing their tokens into the Governance pool, for example, BST token holders can acquire the ability to vote. They then get sBST tokens for every BST they stake, which are what allow them to cast votes on different protocol governance issues.

Staking BST on Oceanpoint has additional justifications. To support individual real estate tokenization projects, for example, users can deposit tokens into various pools. By doing this, they can passively earn more BST and get access to the unique token for each project, which stands for a portion of the relevant real estate.

Blocksquare DAO members who own sBST also benefit from early access to newly tokenized properties, including the chance to take part in their pre-sales.

As a result, BST holders can support marketplace operators via the Oceanpoint platform, take part in governance, and earn rewards through staking. Additionally, BST is made to match rewards with users who have a same long-term aim for the project. As a Certified Partner, people that invest in Oceanpoint’s Governance pool will be eligible for a number of discounts.

A entirely new sort of benefit is given by the Basic Attention Token or BAT, which is the principal digital asset of the Brave web browser initiative that intends to alter online advertising. BAT is the Brave platform’s means of exchange, and may be used to access different advertising services provided by the browser. Its value is an original effort to define a price for user attention, which is what all marketers want.

Brave is an open-source browser that prioritizes privacy and has built-in capabilities to prevent malware, intrusive cookies, and trackers. It is driven by blockchain technology, which tracks user attention anonymously and converts this data into incentives and income.

Users of Brave can earn BAT by consenting to occasionally view advertisements that the browser displays; in other words, they can be compensated for viewing advertisements. Alternatively, they can choose to block ads entirely, but in that case, no rewards will be awarded.

In the meantime, users can tip their preferred websites and publishers with BAT, rewarding content creators as well. This implies that content producers can receive income from a different source in addition to or instead of traditional advertising.

Because advertisers must pay with BAT in order for their ads to be displayed to users of the Brave browser, there is a high demand for the token, which raises its value.

In order to further increase the usefulness and worth of BAT, Brave has big plans to turn the token into a payment method for the network of online retailers it will eventually house. Additionally, it is developing a BAT utility for search engines and enabling BAT holders to purchase access to a premium VPN service that will be integrated into the browser. Longer term, Brave is also aiming to provide BAT use for its intended file-sharing service based on IFPS.

A third kind of example is MANA, the utility token of the well-known metaverse platform Decentraland, an online universe where users may build structures, organize events and games, buy and sell virtual land, and more.

Decentral Games, a kind of metaverse-based casino where visitors may play a variety of gambling games, is by far the most visited location in Decentraland. One of them is ICE Poker, which allows users to compete against other human players in intense poker games.

 Professional poker players and high rollers are drawn to the game and are required to purchase in using the MANA token, which is converted into casino chips.

In addition, MANA is the primary medium of exchange for digital products in the Decentraland world. Additionally, it makes it easier to buy and sell virtual land in Decentraland. In order to earn yield and take part in governance voting, MANA holders may also stake their tokens.

The more utility, the better a token is!

As more complex Web3 applications appear, utility tokens are becoming more and more significant in the crypto industry. They may swiftly establish themselves as vital resources in their ecosystems by giving users access to a variety of services and functions.

Utility tokens are the foundation of the most popular Web3 projects, and as these applications gain more users, the demand for the underlying tokens will rise. Because of this, if you have faith in the underlying concept, utility tokens may be a highly alluring investment.

The most well-known utility tokens may become very valuable as the Web3 ecosystem develops and grows, increasing their value and providing substantial benefits to investors that support them early on.