# Types of Tokens 

Tokens serve different purposes, so you can pretty much narrow it down to three types.

**Payment tokens**. They are the most basic type of tokens. They allow users to make payments and transactions and don’t present any additional features.

**Security tokens.** Contrary to their name, they are used for investments. These are the tokens that can be staked (frozen on the account for a certain amount of time to receive rewards) and held for yielding.

**Utility tokens.** These tokens serve as the main currency for decentralized apps.

**NFT.** Non-fungible tokens represent the digital ownership of an object. They are used as collectible items.

### What can I use a token for <a href="#d804" id="d804"></a>

Purposes of tokens don’t exactly explain why your project might need one. So let’s take a deeper look into this.

Basically, tokens transfer value within a certain project. That’s the main reason they exist. And with that in mind, you can already see several ways a token could be used.

Some projects, especially at the very beginning, run ICOs — initial coin offerings to raise funds. Thus, the users support the project and receive the token that allows them to participate in the decision-making process or use some of the project’s features.

Tokens may be used to drive the adoption of a project or a DApp. Most apps use this tactic, especially new ones. Users may receive discounts for using a particular currency backed by the DApp.

Less often tokens are used as a promotional tool or for a particular cause. These tokens may attract new users but they end up being far less relevant.