Written by: @0xBenniee
TL;DL;
Issuing tokens is no longer the only solution: Teams with clear cash flow, channels, and compliance paths do not necessarily need a TGE.
Short to medium-term prices are mainly driven by three factors: liquidity, attention, and chip structure.
The long-term value of a token depends on value capture; how this value capture is conducted is crucial for the token's long-term value.
The next stop for tokens may be a "machine economy": Payments between agents and native protocols like x402, promoting settlement by calls and profit sharing by contribution.
The thoughts in this article stem from @DrPayFi (Huma.Finance Co-founder) in response to the author's questions:
Q:
Huma has built a complete Payfi infrastructure over the past year, but tokens often limit project development within the ecosystem; for instance, the issued tokens essentially represent liabilities and act as counterparty to retail investors. Not everyone can benefit, and teams must invest substantial effort in market cap management or chip distribution.
Of course, there were no debts owed to any early participants during the TGE, making it feel somewhat out of place in a market where "no one looks long-term."
Details of the response are as follows;
Firstly, the TGE may be a harvesting tool for some aimless projects, but for a long-term project, it might represent an "accelerator."
This is also a repeated topic of discussion during Consensus: For the vast majority of projects with stable cash flow, issuing tokens may not be the highest-gaining choice, and often has more drawbacks than benefits.
Once a TGE begins, teams must manage not only product advancement and growth polishing, but also bear the additional burden of managing expectations on token price, liquidity structures, market making arrangements, complex communications with exchanges, and market sentiment fluctuations—this series of uncertain external variables continuously consumes organizational attention and can adversely affect product pace and strategic decisions.
What is an "accelerator"?
In the Payfi network, as opposed to traditional Fintech growth paths that often rely more on licenses, channels, and regional networks, scaling liquidity in a very short cycle and quickly converting it to usable TAL (Total Active Liquidity) generally requires a longer time.
The TGE provides a more efficient "global distribution and attention aggregation" mechanism: Unlike the thresholds and regional limitations of stock market listings, tokens allow global users to participate, hold, and trade with the growth of the network at low barriers via DEX/CEX, thereby providing additional momentum for ecological cooperation and growth flywheels, which can help projects gain user attention in a shorter time and improve the actual user growth of products.
What is a "harvesting tool"?
Conversely, for some projects that already lack products/users, TGE → selling tokens becomes the only exit/profit route; through continuous pulling and selling, the simplest extraction of liquidity from the market and exiting can be achieved.
More brutally, this is not an isolated case but the norm in the current market. Over the past year, the vast majority of newly issued tokens have experienced significant pullbacks; 97% of tokens had an average price drop of 78%. As market liquidity becomes thinner and exits increasingly rely on the secondary market, this "blood-sucking" strategy in the secondary market becomes more frequent, effective, and irreversible.
Factors determining token price post-TGE and potential external yields
Currently, Crypto projects still face some structural issues—there is a long-term mismatch between "exit channels" and "external growth."
On one hand, the supply side of public chains and projects has long been "over-issued," but the market's capital volume and the real transaction intensity on-chain are insufficient to support the continuously elevated FDV/market cap. Most projects struggle to establish steady, scalable protocol income solely through the product itself, making it impossible to absorb significant unlocking pressures in the future with this cash flow.
For example, according to DeFiLlama's statistics, only 6 protocols have generated over $1M in protocol revenue in the past 24 hours, and only 49 have exceeded $5M in the past 30 days. This means that relying solely on protocol income often fails to support excessively high valuations, and is even harder to withstand supply shocks that various tokens may face during subsequent unlocking periods.
On the other hand, factors like market makers, exchanges, and users also play a role as highly uncertain variables in token price. When early capital exits increasingly rely on the secondary market, prices become inherently dominated by stakeholders' interests.
Besides early VCs being able to exit through mergers or subsequent financing, more projects in the phase where cash flow has not yet been established and financing windows are tightening tend to shift their financing function to the secondary market: through phased unlocks and so-called "reasonable reductions," the already limited market liquidity is "transferred" from retail investors to the project side.
In the short term, this can prolong the project's life, but in the long run, it leads the market toward a negative cycle, ultimately evolving into an irreversible process of "bad money driving out good."
This also corresponds to what @ChaseWang mentioned in an interview: in the current environment, many target's short to medium-term trends often revolve around the following three variables:
-Liquidity: Currently, whether everyone has money, the strength of buying intent/risk appetite, and whether there are more attractive alternative assets, determine the upper limit of price increases.
-Flow (Attention): The diffusion of top KOLs, the input from agencies and channel resources, and the concentration of retail investor attention often determine the amplitude of short-term fluctuations.
-Chip Structure: The size of the circulating supply post-TGE, the distribution of chips, the unlocking rhythm of token economics, and arrangements around liquidity.
As liquidity thins, the market relies more on narratives and prices; the more it relies on prices, the more it harms the confidence of users and long-term funds, ultimately evolving into a chip game between the project side and retail investors.
However, in reality, project teams, retail investors, and exchanges are not naturally opposing entities. The true common interest of the three parties is to enlarge the "ceiling & imagination of the leaders" and to bring in incremental funds and real use cases from outside, rather than repeatedly PVP within existing funds, treating the secondary market as an endlessly flowing ATM.
Flow does not compete for priority; it competes for an endless stream.
Product Value and Value Capture
Many projects don’t lack "product value," but rather, the value does not feed back into the token.
Returning to today's topic, one discovers a more counterintuitive fact: Not issuing tokens does not equate to a lack of greatness. For example, @Pumpfun demonstrates that "product value" can definitely exist in Web3, but whether a project's token can maintain long-term pricing depends on value capture: Without a clear backflow mechanism, token value often only relies on sentiment and chip structure for support.
A typical positive case is Hyperliquid. Its “token value capture” is widely recognized in the market: the real income generated by the protocol → forms continuous buying backflow (e.g., buyback mechanism) → binds the value of the token directly to trading activity. As trading becomes more active and income increases, the token's holding capacity strengthens, providing a clearer pricing anchor.
Conversely, common negative cases often fall into three structures:
- The product has income, but the token price does not hold: Money earned by the protocol remains with the team/company/channel side, while the token itself only serves "governance voting" or "narrative performance," lacking value backflow, and can only rely on sentiment pricing in the long run.
- The token provides incentives but lacks real demand/users: It builds data momentum through high inflation subsidies (TVL/trading volume looks good), but once the incentives are removed, data plummets, leaving only unlocking and selling pressure.
- Treating the secondary market as a financing and exit channel: When projects have not yet stabilized cash flow, they choose to bear financing pressure through the secondary market, and the token becomes the project side's "liability," leading to a decline in pricing logic toward chip games.
So, where is the future?
If we perceive the "path" of traditional payments as a significant breakthrough, solving geographical isolation: enabling transactions between people and merchants, and banks to banks, even across great distances under unified rules for trustworthy settlements, then in the next twenty years, the real main theme may shift from "person paying person" to "program paying program," where agents using crypto for payments will become a new form of high-frequency trading.
If we rewind the timeline to 2006, Mastercard completed its IPO on May 24, 2006, at $39.00 per share, and at that time, it was more regarded as traditional financial infrastructure for "card networks/clearing processing."
Today, Mastercard's network connects over 210+ countries and regions and has a network of 150M+ merchants and more than 3.5B cards in circulation. Mastercard implemented a 10:1 stock split in January 2014, and at the current price of about $521.93, investors holding Mastercard stock have seen a 134-fold increase over the past 20 years.
What about crypto? The blockchain might not just exist for transfers among humans; it resembles a set of settlement languages prepared for the next generation of automation.
In the future Agent economy, the demand for payment through API calls may likely become a new high-frequency scenario: Agents will not only exchange information and tasks but also engage around data, models, computing power, and service calls with “pay-per-use, instant settlement.” Experiments like Clawbot that allow agents to transfer funds to each other to "earn money" have already been partially validating the feasibility of this pathway.
For this reason, the 24/7 efficient settlement, programmable funds, and traceable ledgers provided by blockchain have the opportunity to become a more universal payment foundation in future robotic societies.
In the next phase, retail investors don’t need to place all their hopes on the TGE. Stricter regulations do not have to mean the end for tokens; it's more like forcing the industry to separate two aspects: financing and exits, reverting to a more replicable approach of equity/IPOs; tokens should return to what they are meant to do (on-chain incentives, node collaboration, resource distribution).
Meanwhile, TGEs may still coexist but should serve more as "lubricants" for the network. Especially in the future Agent economy, tokens layered over protocols like x402 that write payment into HTTP may become the foundational infrastructure for settlement by calls and profit sharing by contribution.
In Conclusion
It is undeniable that we are in a colder and harsher four-year cycle; the pains are unavoidable, just as the body's self-protection expels toxins. The industry also needs to squeeze out the toxins within its system (bubbles, scams, poor quality projects). Bad money, if not expelled, makes it difficult for the true infrastructure to be seen. Currently, we are more like sitting on a high-speed train, with the scenery outside changing, the people beside us may change, but our direction has never changed.
To conclude, I want to borrow a sentence from Richard: "The current winter is akin to the bursting of the 2000 internet bubble, purging unreliable .coms and leaving behind Amazon and Google. Regulation will squeeze out scams, and the blockchain protocols that truly solve problems will reshape global financial infrastructure in the next 5 years."
If given a chance to return to those years, do we still have the courage and awareness to catch unicorns like Amazon and Google? If the next cycle is a game for institutions, then all past patterns will be reshuffled, and by the time the new landscape arrives, I hope we will still be at the table.
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