Definition ∞ Consumptive Token Use describes the utilization of a digital token where the token is spent, burned, or otherwise removed from circulation in exchange for a service, access, or resource within a blockchain ecosystem. This mechanism typically reduces the token’s circulating supply, potentially contributing to its value if demand remains consistent or grows. It contrasts with speculative holding by directly linking token demand to practical application.
Context ∞ The discourse around token utility frequently addresses consumptive token use as a vital indicator of a project’s long-term viability and intrinsic demand. A critical future development involves designing tokenomics that effectively incentivize such consumption to create sustainable economic models. News often reports on projects implementing or adjusting these mechanisms to bolster token value and ecosystem health.
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