Glossary
Utility Token
A token that grants access to a function within a product, from fee discounts to staking rights.
A utility token is one that does something: pay a fee, access a service, stake for rewards, or settle a fee discount. It is a claim on the use of a product rather than a claim on its profits.
That distinction matters for judging demand. Fee revenue shows real usage in dollars, which is hard to fake. Emissions paid to users show a project buying its own activity, which is easy to fake and easy to end.
A token whose only function is to be traded on an exchange is not a utility token, no matter what the documentation says. If you cannot name what the token does, the price reflects speculation alone.
Related terms
Airdrop
Free tokens distributed to wallet addresses, usually to reward early users of a protocol.
AMM
Automated Market Maker — a protocol that prices assets with a formula instead of an order book.
APR vs APY
APR is the yearly rate without compounding; APY includes compounding and is always higher.
ATH
All-Time High — the highest price an asset has ever traded at.
Bear Market
A prolonged decline, conventionally 20% or more from recent highs.
Bull Market
A prolonged rise driven by new demand, easy credit and rising confidence.