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Utility vs. Security Tokens: Why Not Both?

Article by William Mougayar

I’m seeing increased activity in the “token airdrop” model, and this topic deserves some thoughts.

In the most primitive scenario, companies declare that a certain percentage of their tokens are designated for users, and they send them randomly to wallet addresses with the hope that these wallet recipients become actual users.

The problem with these early scenarios is that most often the network is not ready, so there is no real token utility, in essence defeating (or considerably delaying) the purpose and effect of that air drop. Furthermore, these users weren’t pre-qualified as real potential users, so there is no market awareness about the products behind these companies. As a result, token usage remains a mirage. In this scenario, users are buying into a lotto, because a large number of token-based companies will not make it, compared to the ones that will be lucky enough to enjoy market value appreciation that is commensurate (to a degree) with actual token utility.

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