The Funding: Is a token-to-equity shift emerging in crypto?
A growing number of crypto projects are considering shifting from token/DAO structures to traditional equity models due to partnership hurdles and regulatory clarity.Summary
Across Protocol's proposal to shift from a token and DAO structure to an equity and corporate setup signals a potential trend in the crypto industry, driven by difficulties in forming partnerships and growing regulatory clarity. Experts suggest the DAO model often slows down execution and risk-taking compared to traditional business structures, with some viewing past DAO adoption as 'decentralization theater' used primarily for regulatory camouflage. Furthermore, many tokens fail to reflect underlying protocol revenue because linking them directly to cash flows poses securities risks. While this shift is not universal—tokens remain suitable for true protocols like Bitcoin or Ethereum—it is most likely for projects operating as businesses, such as infrastructure or middleware protocols needing enforceable contracts for enterprise clients. This potential move toward equity could shrink the investable token universe, leading to fewer, but potentially higher-quality, token projects remaining.
(Source：The Block)