Utility tokens are typically pre-mined and created all at once by a cryptocurrency network’s developer. They are typically given away to investors during the initial coin offering (ICO) phase in order to spark interest in the good or service. They are created to perform a specific purpose inside a platform’s ecosystem.
Utility tokens don’t have any real monetary worth, even if investors may be able to buy and use them as a form of payment on the network to redeem or acquire access to a specific service. They are not meant for investment, in contrast to the coinage of the network.