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Alex Krüger 🇦🇷 @Crypto_Macro
, 7 tweets, 2 min read Read on Twitter
1/ There is nothing "decentralized" about a Utility Token.

Utility tokens are akin to gift cards that trade in secondary markets and allow their owner to use/access the platform or services of the issuer.

How great is that? Well, it is not.
2/ The origin of utility tokens was mainly to skirt regulatory requirements
to register a tokens offering as a securities offering. These tokens serve no purpose aside of avoiding regulations and enriching the issuer at a faster pace (before delivering any value).
3/ Not yet sure yet what utility tokens are?

Have a look at this:
4/ Yes, utility tokens do become more valuable the bigger the platform. That does not make them necessary. Utility tokens just add friction. Users would be better off paying for a service with fiat or BTC or ETH. Platforms would be better off as well without utility tokens.
5/ Having to use utility tokens is similar to having to buy tokens every time one goes to a supermarket. Worse, every market uses a different token. Even worse, food prices are set in tokens, which are highly volatile. Thus one can never have a good idea of his next meal's cost.
6/ Utility tokens add friction and thus reduce demand for a platform. They are bad for both users and platforms. Furthermore, utility tokens provide holders with no rights and are thus bad for investors as well.

Most utility tokens should disappear.

There are some exceptions.
I'll update this thread at some point on with analysis on specific utility tokens - the good, the bad, and the terrible.
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