A Dividend Token is a type of cryptocurrency that pays holders a share of profits or earnings generated by a specific project or platform. These tokens serve as a way for investors to earn passive income, similar to how traditional stocks distribute dividends to shareholders.Typically, when a project earns revenue—through fees, sales, or other means—it allocates a portion of that revenue to dividend token holders. This is often done through regular distributions, which can be in the form of additional tokens, other cryptocurrencies, or even fiat currency.The appeal of dividend tokens lies in their potential for generating ongoing returns, making them attractive to investors looking for more than just price appreciation. However, it’s essential to remember that not all projects guarantee dividends, and the viability of these rewards depends on the project’s performance and management. Investors should conduct thorough research before purchasing dividend tokens, assessing factors like the project’s transparency, its business model, and the sustainability of its revenue-generating activities.