Innovation is a major feature associated with the crypto industry. with every new integration, there is a use case which is another fancy way of saying 'utility'.
Utility tokens are cryptocurrencies that have an essential role for creators and users of the token.
However, not all utility tokens are the best, so users need to learn how to spot good tokens out of the bad. A bad utility token not only negates the idea of being useful to the community but might also be detrimental to invested funds.
Below, I will be discussing utility tokens, how to spot good ones, and the best tokens to buy in 2022.
What are Utility Tokens
Utility tokens are cryptocurrencies that have special functions, as their primary aim is to raise funds for a crypto project.
Utility tokens are usually associated with initial coin offerings (ICOs) because this is majorly the period it is used.
An initial coin offering (ICO) is a way crypto investors raise money by selling blockchain-based assets.
Regarding blockchain-based assets, utility tokens are the primary way project founders fund their projects. Those who buy the utility tokens are in a position to benefit from profit sharing based on the amount they own.
Utility tokens perform many actions on the blockchain, including voting, functionality, value exchange, and earnings.
Apart from buying them, you can also earn utility tokens by engaging in activities on their platform.
In some cases, utility tokens during their developmental stages have a flat price.
Those who don't buy in its early stages mostly go for the best tokens, depending on the project's demand.
How to Spot Good Utility Tokens
After getting answers to "what are utility tokens," the next thing is to learn how to spot good ones from bad utilities.
Application/Use Cases
The first thing to consider when buying utility tokens is their application on the blockchain.
If a utility token only has voting rights, as is utility, and another has more than four applications, the latter might do better than the former.
The demand for utility tokens mostly depends on what and how they can be used on the blockchain.
Strong Community
The community is a very important factor in the crypto industry. It is not about the crowd but how the community pushes and supports the project.
If a utility token doesn't have a strong community, its value would probably stagnate.
The Team
The team heading any crypto project is critical, as they are directly connected to the project's success. When looking for the best tokens to buy, evaluate the team behind the project.
If the team has no verifiable information or contribution to the crypto space, then be skeptical about buying.
Documentation
You should assess the whitepaper and roadmap of a utility token very well before buying. These two major documents are essential, as they give you an idea of what those behind the utility token plan to achieve.
Best Tokens to Buy
BNB
BNB is the in-house token of the Binance Smart Chain ecosystem launched in 2017.
Looking at its historical growth trajectory, BNB has grown from trading at $0.11 at its launch to $670 during the recent bull market.
The token is the native token of the Binance ecosystem and serves many use cases. From voting to polls, the token is backed by a robust community. After the bull market of 2021, the token has been moving between $200 and $300.
Basic Attention Token (BAT)
Basic Attention Token (BAT) is a utility token at the forefront of Web3. The token primarily promotes using a dubbed Web3 browser named Brave.
The tokens are used to reward those who use the browser, it also has voting rights attached to it. After its launch in 2017, BAT is still trading more than 70% higher than its launch price.
Axie Infinity (AXS)
Axie Infinity is a utility token used in the play-to-earn gaming sector and an in-house token for the Axie Infinity blockchain game.
Despite the hack that happened to its blockchain in late March 2022, the utility token is still among the best tokens to buy. It has a strong community and many use cases ranging from voting rights to rewards.
Enjin Coin (ENJ)
Enjin Coin is the core token of the Enjin ecosystem and is one of the best utility tokens for NFT lovers.
Enjin Coin is used to mint in-game NFTs in the Enjin Metaverse and serves as a governance token in the Enjin ecosystem.
With a supply of one billion tokens, the price of Enjin Coin is very stable despite the turmoil the crypto market has been experiencing.
Tamadoge (TAMA)
Tamadoge is a new meme coin that serves many purposes in the Tamadoge ecosystem. It is used while playing a play-to-earn game named Tamadoge, and it is also used for governance.
TAMA started with a capped supply of 2 billion tokens, and about 5 percent of any in-game transaction is burned. TAMA is a very good token to buy as it is still in its early stages.
Battle Infinity
Battle Infinity is in high demand as it has recorded a lot of successes in 2022. The token is one of the best tokens to buy as it is low-cap crypto with its utility in the metaverse.
It raised about $5 million in its ICO in 2022 and has exceeded most of its aims in 2022. The token's presale was initially planned to last for three months, but demand made it sell out in less than 24 days.
Conclusion
Above, I answered the question, "what are utility tokens?"
Utility tokens serve essential purposes in the crypto industry, from in-game transactions to governance.
There are many utility tokens in the crypto market, so it is important to know how to spot good tokens. Strong community, solid team, real-life applications, and documentation are criteria.
Note that you should always invest in what you can afford to lose, even in the best utility tokens. The above assets are simply a recommendations due to current opinions, we encourage you to do your research before any investment.