Network Token

Definition ∞ A Network Token is a digital asset that serves a specific function within a particular blockchain network or decentralized application. These tokens are often used to pay for transaction fees, access services, grant governance rights, or incentivize participation within the ecosystem. Unlike cryptocurrencies primarily used as a medium of exchange, network tokens are integral to the operation and utility of the underlying platform.
Context ∞ Discussions about Network Tokens are prevalent in news related to the utility, governance, and economic models of various blockchain projects. Changes in tokenomics, the introduction of new utility functions for a token, or debates over its classification as a security versus a utility are key areas of focus. Understanding the role and value proposition of a network token is essential for assessing the health and sustainability of its associated decentralized ecosystem.