Plain English
A utility token gives access to a product — paying for compute on a decentralized network, storing files, querying data, settling fees on an app. ETH is technically a utility token for the Ethereum network. FIL, RNDR, AKT, GRT, LINK, and many infrastructure tokens fit the category.
How it actually works
Demand for a utility token, in theory, tracks usage of the underlying network. More queries → more LINK demand. More storage → more FIL demand. The economic model only works if (a) the network is actually used and (b) the token is genuinely required, not bypassable. In practice many “utility” tokens are weakly tied to actual revenue.
What it means for you
When evaluating a utility token, the test is simple: would a user/business pay for this if the token did not exist as a speculation? If the answer is “yes, gladly,” the token has a defensible floor. If the answer is “no, they would route around it,” you are holding a financial asset wearing a utility costume.
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Educational content only. Not investment, tax, or legal advice.