Consumptive Use Model

Definition ∞ A consumptive use model describes digital assets that are used up or spent in exchange for services or functions. This model applies to cryptocurrencies or tokens primarily designed to be consumed within a specific ecosystem to access or pay for goods, services, or network operations, rather than being held primarily for speculative investment. Examples include gas tokens used to pay for transaction fees on a blockchain or utility tokens spent to access decentralized applications. The value of such tokens is directly tied to the demand for their underlying utility and the services they facilitate.
Context ∞ The discussion surrounding the consumptive use model often addresses the utility and classification of digital assets, particularly in the context of regulatory scrutiny. A key debate involves distinguishing genuine utility tokens from investment contracts, which has significant implications for securities laws. Future developments will likely involve clearer regulatory guidance on how consumptive use tokens are defined and treated, impacting their market liquidity and operational design.