Mil-Spec is the middle of the CS2 rarity ladder and the entry point for case skins. It sits above Industrial Grade and below Restricted. The label is a medium blue, so traders call these skins "blues". The Counter-Strike wiki's grade table lists the full ladder: Consumer Grade, Industrial Grade, Mil-Spec, Restricted, Classified, Covert, then the gold Rare Special tier for knives and gloves.
When you open a weapon case, Mil-Spec is by far the most likely outcome. The odds Valve's Chinese publisher Perfect World published in 2017 put Mil-Spec at 79.92% per case, with Restricted at 15.98%, Classified at 3.2%, Covert at 0.64% and a Rare Special Item at 0.26%. So roughly four out of five case openings land on a blue.
Why are Mil-Spec skins usually cheap?
Supply. Every active case pumps out Mil-Spec skins all day, so the market is flooded and most sell for under a dollar. A case key costs more than nearly every Mil-Spec skin, which is the main reason case opening loses money on average. Some Mil-Spec skins from discontinued cases hold more value because the supply has stopped growing, and a few with popular designs trade well above the tier's norm.
Are Mil-Spec skins good for trade-ups?
Yes, they are the most common trade-up input. Steam Support's trade-up rules say ten Mil-Spec skins always return one Restricted skin drawn from the collections of the inputs. Because Mil-Spec inputs are cheap and Restricted outputs can be worth several dollars, this is where many traders run their first contracts. The trick is picking collections where the Restricted outputs are worth more than the ten inputs, then keeping input floats low so the output lands in a good wear tier.
StatTrak Mil-Spec skins follow the same rules but cannot be mixed with normal skins in one contract, and ten StatTrak inputs return a StatTrak output.