Founder of 6th Man Ventures: How to Find the Most Valuable Crypto Projects?

Original link: https://x.com/mdudas/status/2008882665781612701

Compiled by: Ken, ChainCatcher

Whether the "dual-token + equity" structure is feasible does not have a simple or "one-size-fits-all" answer. However, there is a core principle: you must be confident that the team is not only absolutely excellent but also possesses a long-term mindset, committed to building an enterprise-level business led by founders that can last for decades, like Zhao Changpeng.

I believe that for application-layer projects that require long-term leadership, in many cases, the token mechanism is actually inferior to the equity structure. For example, you can see that many founders of DeFi 1.0 protocols have mostly left their projects, many of which are struggling and essentially running in "maintenance mode" by DAOs and other part-time contributors. It has been proven that DAOs and token-weighted voting are not good mechanisms for projects (especially at the application layer) to make sound decisions; they cannot make quick decisions and lack the "founder-driven" level of knowledge and capability.

Of course, a pure equity model is not absolutely superior to tokens either. Binance is a strong example—tokens give them the ability to offer fee discounts, staking for airdrops, access permissions, and other rights related to their core business and blockchain, which cannot be clearly carried by equity ownership.

"Ownership tokens" also have their limitations and are currently difficult to apply directly within products or protocols. Distributed applications and networks are fundamentally different from traditional companies (otherwise, what significance do we have in this industry?), and pure equity is clearly less flexible than tokens. In the future, there may indeed be "equity +" type token designs, but that is not the current situation (and the lack of market structure legislation in the U.S. currently poses risks for issuing pure equity-like tokens with direct value capture capabilities and legal rights).

In summary, you can envision a scenario (as Lighter describes): equity entities operate in a "cost-plus" model, serving as an engine for token-driven protocols. In this structure, the goal of the equity entity is not profit maximization but rather maximizing the value of the protocol tokens and ecosystem. If this model works, it will be a huge benefit for token holders. Because you have a well-funded Labs entity (for example, Lighter has a token treasury available for long-term development), and the core team holds a large amount of tokens, there is a strong incentive to drive token appreciation (while maintaining the crypto-native nature and on-chain characteristics of the core token, distinguishing it from the structurally complex associated Labs entities).

In this model, you do need to have a high level of trust in the team, because in most current cases, token holders do not have strong legal rights protection. Conversely, if you do not believe the team has the ability to execute and create value for the tokens they are heavily invested in, then why did you initially participate in this project?

Ultimately, it all depends on the team's capability, credibility, execution, vision, and actual actions. The longer an excellent team stays in the market and fulfills what they promised to do, the more their tokens will exhibit the "Lindy effect." As long as the team maintains good communication and clearly directs value to the tokens through buybacks, substantive governance, and utility within the underlying protocol, we will see the highest quality tokens by 2026—even if they have equity/Labs entities—experience an explosion.