There are over 2 million cryptocurrencies listed on CoinGecko. Most will go to zero.This isn't pessimism - it's math. The vast majority of tokens exist for one purpose: to transfer value from buyers to creators.Real utility tokens - the ones that survive and grow - are rare. Here's how to spot them. For the red flags to watch, see our token red flag checklist.
Why Most Tokens ExistLet's be honest about why tokens get created:Fundraising: Easier than equity, fewer investor protectionsQuick money: Launch token, dump on buyers, disappearSpeculation fuel: Create something tradeable, take feesMarketing: "We have a token" sounds more innovative than "we have a SaaS product"Notice what's missing? Actual necessity.Most projects could work fine without a token. They add one because it makes money, not because users need it.
The Utility TestAsk these questions about any token:1. Does the token DO something?Can you use it for anything besides selling to someone else? If the only use case is "hold and hope," it's not utility - it's speculation.2. Would the project work without it?Could they accept credit cards instead? If yes, the token is optional, not essential.3. Does holding create real value?Not "governance rights" that mean nothing, or "staking rewards" paid in more of the same token. Real value: access, discounts, revenue share.4. Is the utility scalable?As the platform grows, does token demand grow? Or is it fixed utility that doesn't scale?Most tokens fail at least 3 of these 4 tests. The one metric that actually predicts price ties directly into these tests.
What Real Utility Looks LikeBNB (passes all 4):Does something: Fee discounts, launchpad access, gas paymentsEssential: You can't get these benefits without BNBReal value: Measurable savings and accessScalable: More Binance users = more BNB demandLINK (passes all 4):Does something: Pays for oracle servicesEssential: Protocols need LINK to use ChainlinkReal value: Critical infrastructure for DeFiScalable: More DeFi = more LINK demandRandom meme coin (fails all 4):Does nothing beyond being tradedNot essential to anythingNo real value creationNot scalable - pure speculation
How $IPO Fits This FrameworkApplying the utility test to $IPO:1. Does it DO something?Yes - holding $IPO unlocks access to vetted pre-IPO deals and AI-powered due diligence. Not "governance" fluff - real investment access.2. Would the project work without it?Technically yes, but the tokenomics create aligned incentives between platform and users that wouldn't exist with traditional models.3. Does holding create real value?Access to investment opportunities + staking rewards from platform revenue = measurable value.4. Is utility scalable?More deals on platform = more reason to hold for access. Demand scales with platform growth.This doesn't guarantee success - execution matters. But the utility foundation is there.Related: How IPO Genie Works | AI-Powered Scoring
Why This Matters for YouKnowing that 99% of tokens are utility-free isn't pessimism - it's liberation. You don't need to evaluate thousands of projects. You need to find the handful that pass the utility test.Apply these four questions to every token: Does it DO something? Would the project work without it? Does holding create real value? Is the utility scalable? Most tokens fail immediately, saving you time and money.The 1% of tokens with real utility are where the sustainable wealth gets built.
Frequently Asked QuestionsQ: Isn't all crypto speculation?Most is, but not all. Tokens with real utility have a demand floor from actual usage. Pure speculation tokens can go to zero overnight.Q: Can a token gain utility later?Theoretically, but it's rare. Projects usually launch with their utility model. Adding real utility retroactively often fails because the token economics don't support it.Q: What about NFT utility?Same test applies. Does the NFT DO something beyond being resellable? Most don't. Some (access passes, game items) do.Q: Why do useless tokens pump at all?Speculation and marketing. Short-term, narratives can drive any price. Long-term, no utility = no floor = eventual crash. The music always stops.
