Utility Tokens: What They Are and Why They Matter in Crypto

When you hear utility tokens, digital assets designed to provide access to a product or service on a blockchain platform. Also known as functional tokens, they’re not meant to be speculative investments—they’re meant to be used. Think of them like a subway card: you buy it to ride the train, not to resell it later for profit. But in crypto, too many people treat them like lottery tickets. That’s where things go wrong.

Utility tokens are the engine behind decentralized apps. Take DeFi tokens, tokens that let users lend, borrow, or trade on decentralized finance platforms. You need them to stake, vote on upgrades, or pay for transaction fees. Tokenomics, the economic design behind how a token is created, distributed, and used decides whether a token survives or dies. A bad tokenomics model? It’s like building a gas station with no fuel. You see this in projects like Poupe or Vital Network—tokens with no real use, no users, and zero trading volume. They’re not utility tokens. They’re ghosts.

Real utility tokens solve problems. CUDIS gives you crypto for wearing a health ring. NAYM lets you vote on insurance rules for digital assets. DeepBook’s DEEP token powers its on-chain order book. These aren’t hype. They’re tools. But here’s the catch: most tokens claiming to be utility tokens aren’t. They’re just rebranded memes with a whitepaper. The market is full of projects that promise access but deliver nothing. That’s why you need to look past the name. Ask: Can you actually use this token today? Does it do something no other token can? Is it tied to a working product, or just a promise?

What you’ll find below isn’t a list of winners. It’s a collection of real stories—some cautionary, some revealing—about what happens when utility tokens fail, succeed, or disappear. You’ll see how airdrops like OneRare’s ingredient NFTs or TOPGOAL’s Footballcraft rewards were tied to actual gameplay. You’ll see why Vauld collapsed even though it promised yield. You’ll learn how account abstraction makes wallets smarter, and why Iran’s citizens turned to crypto not to evade sanctions, but to survive. These aren’t random posts. They’re case studies in what real utility looks like—and what happens when it’s missing.