1. Governance$ICP
$ICP tokens are used for network governance through the Network Nervous System (NNS), which is a decentralized autonomous organization (DAO) controlling the Internet Computer.
ICP holders can lock up tokens (“stake” them) in neurons to participate in voting.
Voting determines protocol upgrades, economic parameters, and network policies.
Participants earn rewards in $ICP for voting and participating in governance.
. Network Utility (Cycles)
ICP can be converted into “cycles”, which are used to power computation and storage on the Internet Computer.
Think of cycles like “fuel” for running decentralized apps (dApps).
Developers pay cycles to deploy and run smart contracts (called canisters) on the network.
This mechanism allows the network to scale without charging traditional gas fees like Ethereum.
3. Incentives & Rewards
ICP is also used to reward participants and maintain network security:
Node operators earn ICP for providing computational resources.
Individuals earn rewards through neuron staking, encouraging long-term participation.
4. Medium of Exchange (less common)
While ICP is primarily designed for governance and network usage, it can also be traded or used as a cryptocurrency, though that’s not its main intended use.