Definition
Most VPN servers operate on a shared-IP model: many users connecting to the same server all egress from the same external IP address. A dedicated IP is a paid add-on that reserves an IP exclusively for one customer. The IP is still owned by the VPN provider, but only that customer's traffic flows through it, and the IP remains the same across reconnects.
Why Anyone Would Want One
Use cases include: accessing services that require an IP allowlist (corporate VPNs, banking, certain admin panels); avoiding repeated CAPTCHA or 'suspicious activity' challenges that are triggered when many users share the same IP; running a server reachable from the internet without exposing your home IP; avoiding the 'shared neighborhood' problem where a streaming service blocks your IP because someone else on the same shared address abused it.
Privacy Trade-Off
A dedicated IP is the opposite of anonymity. By definition, the IP is associated with one paying customer. If the provider is compelled to identify the user behind a given IP, a dedicated IP makes that trivial — there is exactly one candidate. For users prioritizing convenience and IP stability, dedicated IPs are useful; for users prioritizing anonymity, they are counterproductive.