Token Value Disconnect Remains Unresolved
David Pakman, managing partner at crypto venture firm CoinFund, said the blockchain industry has yet to solve the core tokenomic problem: linking a native token's value to the long-term success of its underlying network or product. In a recent appearance on The Block's podcast *The Starting Block*, Pakman described the industry as caught in a tug-of-war between short-term incentives and long-term value.
He explained that paying contributors in native tokens is attractive if participants believe the network's future value will far exceed current market prices, allowing them to share in the upside. However, many tokens fail to establish a connection with product or network fundamentals, making it hard to distinguish value driven by real demand from that driven by short-term speculation. "If tokens rely solely on narratives or community chatter without returning to the fundamental value of the network or product, they are not truly attractive," Pakman said.
Stablecoins as an Alternative Incentive
Given the uncertainty around token value, Pakman suggested that some emerging blockchain projects should consider paying contributors in stablecoins instead of relying entirely on native tokens. Stablecoins offer clearer immediate value, allowing those unwilling to bear long-term price volatility to participate in early network building.
He noted that younger investors and developers often want faster results, seeking quick gains or losses before moving to the next opportunity, making stablecoin payments more suitable for some. However, he emphasized that holding native tokens could still offer higher potential returns for those who believe in a network's long-term growth.
Ethereum's Success vs. Most Projects
Pakman shared his early experience mining Ethereum, where receiving Ether as rewards and holding it long-term allowed him to benefit from the network's value growth. But he acknowledged that most crypto projects have not replicated Ethereum's success, with many tokens performing poorly over time and leaving early participants with significantly depreciated assets.
The market faces a key question, he said: whether tokens have long-term growth momentum or are merely driven by short-term narratives and community hype. "If tokens are just the result of short-term market fluctuations, they are not attractive products. But if they can reconnect with the fundamental value of the network or product, they may still have development potential," Pakman added.
SEC Rules Block Token-Value Links
Pakman cited the decentralized finance protocol Ether.fi as an example where the market wants governance tokens tied to actual enterprise value. Ether.fi has a real product and business model, and its governance token should allow investors to share in future network value. However, due to regulatory uncertainty in the U.S., projects often struggle to directly link token value to revenue or economic outcomes.
He believes the SEC's past approach has limited such connections, and the proposed Clarity Act, now under review in Congress, could provide a clearer regulatory framework. The crypto industry widely expects the act to clarify digital asset oversight and reduce uncertainty for businesses and investors.
Clarity Act Seen as Regulatory Turning Point
Supporters argue that a clearer regulatory environment could encourage more capital to flow into the blockchain sector and help build more rational tokenomic models. CoinFund, founded in 2015, focuses on early-stage blockchain and crypto investments, with portfolio companies including World, Superstate, and Ondo.
As the crypto market shifts from speculation toward infrastructure and applications, making token values truly reflect network growth remains a critical challenge for the industry's sustainable development.