Definition ∞ Token rights are the specific entitlements and privileges granted to holders of a digital token within a blockchain ecosystem or protocol. These rights can include governance voting power, access to specific services, claims to revenue streams, or the ability to stake for rewards. They are typically encoded into the token’s smart contract or defined by the protocol’s rules. These rights determine the utility and value proposition of the token.
Context ∞ The classification and enforceability of token rights are paramount in ongoing regulatory discussions regarding digital assets. Regulators often scrutinize the nature of these rights to determine if a token constitutes a security. Debates frequently involve distinguishing between economic rights, utility rights, and governance rights, and how each impacts a token’s legal status. Future legal frameworks will aim to provide clearer distinctions and protections for various types of token rights globally.
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