(Redirected from Utility token)
Means the token will be needed to use the accompanying network.
Like explained with SIA:
This requirement means that as Sia grows in usage, so too will demand for Siacoins. As demand grows, the price will increase. If Sia is being used for billions of dollars of storage, billions of dollars of Siacoins will be required. The value of the Siacoin is inextricably tied to the amount of storage in use on the Sia network.”
However, this does not give a very strong value proposition for an investor. Coins/tokens with burning (throwing away tokens into addresses that cannot be accessed, therefor reducing the supply) characteristics, verifiers that hold stakes with slasher algorithms and other mechanisms to lock up or reduce the supply of the token have better value propositions.