Three primary uses of tokens

Tokens can serve three primary purposes, each one classified under a different name. If a token’s purpose is to sell a piece of the company, much like a stock, then it is an Equity token. If the token is backed by a tradable good, such as gold, real estate, storage space, etc., then it is known as a Security token (these are often more heavily regulated because they are more similar to fiat currencies). Last, but not least, is the Utility token that provides access to a specific product or service. Depending on the token classification, knowing about the relevant laws in association to tokens is very important since regulations change quickly.