In order to decide how to structure a token, or to determine if a protocol/dApp requires a token at all, it is useful to examine the different token types. Not only do they have different dynamics and value capture mechanisms, but they also differ from a legal perspective.
The most common token types can be categorized into four classes:
Each of these types has different properties, so the final decision on which one to choose should be closely aligned with the value the token is intended to capture (see previous chapter: 
Protocol Value & Pricing Models).
Protocol Value & Pricing Models). Utility Tokens
Utility tokens enable protocol/dApp users to perform actions within the protocol that they otherwise could not do.
a) Protocol tokens
- Tying key protocol functions to the token, e.g. Staking/Transaction fees
- Example: $ATOM
b) Access tokens
- Granting users access to protocol features & software functionality
- Example: $KUJI (staking to enable dashboard functionality)
c) Loyalty tokens
- Receiving discounts, such as reduced fees for services or digital goods
- Example: $DYDX / $BNB (receiving trading fee discounts)
d) Community tokens
- Receiving access to communities such as entrances to events or community platforms
Security Tokens
Security tokens capture value from protocol revenue or represent a claim to another (real-world) asset.
a) Asset Backed tokens
- Digital claims to another asset, such as plots of land, real estate, gold, stocks, or any other tokenized asset
- Examples: Tokenized Gold via $PAXG; Tokenized Real Estate by RealT
b) Dividend Tokens
- Tokens that capture value from the protocol or rights to profit distribution (e.g., via buyback & burn or staking rewards)
- Examples: $GMX, $KUJI
Financial Instruments / e-Money
Tokenized financial instruments and tokens that are primarily used for facilitating payments.
a) Payment Tokens / Stablecoins
- Example: $USDC, $USK, $IST
NFTs (Non-Fungible Tokens)
NFTs are digital proving rights to non-fungible objects.
a) Digital Art
- Example: BAYC, Crypto Punks
b) Gaming
- Example: In-game objects
Some tokens may fall into more than one category, which might further complicate the legal status of the token. If you want to learn more about the legal implications of each token type, please follow this article by our partner legal Nodes.