Definition ∞ ‘On-Chain Utility’ describes the practical use or function of a cryptocurrency or token within its native blockchain ecosystem. This utility can manifest as the ability to pay transaction fees, participate in network governance, access specific services, or serve as collateral within decentralized applications. High on-chain utility is often correlated with increased demand and value for the token.
Context ∞ Reports on ‘On-Chain Utility’ frequently analyze metrics such as transaction volume, active addresses, and the usage of decentralized applications (dApps) built on a specific blockchain. News highlighting new applications or services that leverage a token’s on-chain utility can signal increased adoption and potential price appreciation. The demonstrable usefulness of a token within its ecosystem is a critical factor in its long-term valuation.
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