The Token Issuance Game Has Been Ruined: Only Two Paths for Tokens to Survive in the Future

Author: donn (Tze Donn Ng, Investor at Brevan Howard Digital)

Compiled by: Deep Tide TechFlow

Deep Tide Introduction: In the current landscape where token production and selling processes have been pushed to extreme industrialization by factories like Pump.fun, and retail investors' holding periods have drastically shortened to "measured in seconds," the crypto industry is undergoing a brutal cognitive clearing: creating tokens has become extremely cheap, but building a long-lasting asset worth holding for over a year has become increasingly difficult.

Tze Donn Ng (@tzedonn), an investor from the renowned hedge fund Brevan Howard Digital (BH Digital), published an in-depth article proposing the "Crypto Endgame Dual Peak Model" that penetrates the market fog. He points out that tokens capable of crossing cycles and solidifying real demand actually have two distinctly different yet highly clear climbing paths: the left side is the pure "faith asset" supported by spiritual leaders, near-death rebirth, and fervent communities; the right side is the "cash flow asset" with on-chain verifiable real profits, excluding equity siphoning and implementing mandatory buybacks and dividends.

In this article, the author not only performs a scalpel-like classification and dissection of BTC, ZEC, HYPE, PUMP, LIT, and SKY, but also raises sharp questions about numerous projects that delay dividends under the guise of "investing in growth," and makes forward-looking predictions about US stocks RWA, on-chain casinos, and next-generation perpetual DEX tokens. Deep Tide TechFlow has conducted a comprehensive deep compilation of this, providing a penetrating framework guide for every investor seeking true alpha in the secondary market.

The token issuance game in cryptocurrency has been thoroughly conquered. The Pump.fun-style pump-and-dump factories have achieved high automation, with every token release being pre-bundled by robots, and the KOLs fearing missing out (FOMO) have already honed their secret selling techniques through bypass wallets to perfection. The average holding time for tokens is now measured in seconds.

The entire industry has become extremely efficient at creating new tokens, but creating an asset with lasting vitality that investors are willing to hold for over a year has become unprecedentedly difficult.

When considering how tokens can form enduring real demand, I found it extremely effective to approach from two distinctly different core dimensions: the strength of the belief power supporting the asset; and whether the economic value flowing to token holders is real and reliable.

Faith Assets: Consensus Religion Beyond Cash Flow

Faith assets refer to those that have no underlying cash flow, with their value entirely derived from the collective belief of the group. Their value exists solely based on whether others firmly believe they have value.

As a rational investor who does not blindly believe in Bitcoin dogma, the reason I buy BTC is simply that I believe there are enough people who hold an unbreakable faith in it.

However, what exactly distinguishes fleeting, short-lived memes like WIF or BONK from the eternally enduring super meme like BTC?

Looking back in history, those enduring faith assets that can cross cycles generally possess the following five highly overlapping hallmark characteristics:

First, they have a sacred spiritual totem and a god-like leader. For faith assets, there must be a transcendent spiritual leader. BTC has Satoshi Nakamoto, ETH has Vitalik, SOL has Anatoly who fiercely debates Ethereum minimalists on Twitter daily, and HYPE has Jeff. The leading figures of faith assets must possess a surreal sense of nobility, and whenever people mention the token, that name must instantly spring to mind.

Second, they have experienced near-death moments and risen from the ashes. BTC has survived the catastrophic collapse of Mt. Gox, ETH has gone through the split and reconstruction of The DAO, and SOL was deeply mired in the ruins of the FTX empire, but they all escaped death. HYPE faced the JellyJelly attack, with its price once plummeting to single digits, and the entire market questioned whether it would completely vanish. Surviving the test of near-death filters out all speculators, leaving only the most fervent loyalists, thus forging the core and most hardcore foundation of consensus.

Third, they allow early believers to become wealthy. Price increases are the best business development (Number go up is the best BD), and those you lead to financial freedom will naturally evolve into your most fervent evangelists. BTC brought 200-fold returns to early participants from 2013 to 2018, ETH achieved a 40-fold increase from 2020 to 2022, and SOL also created a hundred-fold myth. HYPE achieved a 30-fold growth under sufficient liquidity, distributing extremely generous airdrops to early believers.

Fourth, they establish a fervent community with exclusive symbols and unique memes. Even with real wealth incentives, you still need a meme that can virally spread. You need internal jargon that the community understands, creating a sense of belonging to an exclusive elite club; you need people to blindly follow for a grander vision. BTC has "laser eyes," ETH has the ".eth" domain, SOL has "◎" and ".sol," while HYPE has its active and slightly provocative ".hl" supporters.

Fifth, they have a simple and heart-stirring slogan. To spread a digital religion, a highly concise slogan is needed. BTC's slogan is "digital gold"; ETH's banner is "world computer"; SOL was once called the "Ethereum killer" or "decentralized Nasdaq"; while HYPE's positioning is "house of all finance."

In the recent market, ZEC (Zcash) has approached the above standards to some extent: it has faced a life-and-death test due to a major vulnerability in its shielded pool; its price skyrocketed from $40 to $1200 within a year; and it has highly recognizable narrative slogans like "privacy version of Bitcoin" and "upcoming quantum-resistant Bitcoin."

These traits cannot be artificially industrialized or faked. You cannot simply declare a community a religion just because you created it. In this track, I personally pay attention to PRL (the so-called "AI Bitcoin") and see it as an early asymmetric bet, observing whether it can gradually solidify the above characteristics.

However, there is actually a more straightforward path to reach the peak of enduring tokens.

Cash Flow Assets: Verifiable Real Economic Surplus

In the crypto world, assets that can generate real positive cash flow are extremely rare. The reasons are mainly twofold:

First, selling tokens to the market with grand narratives to obtain exit liquidity is far easier than building a real business with positive free cash flow (FCF).

Second, if the team truly has a cash cow business that operates day and night without needing external financing for expansion, then choosing not to issue tokens and directly pocketing all net profits can save endless compliance and governance troubles.

Teams with extremely high profits, such as DexScreener, Axiom, and Trojan, have long been happy to take 100% of their business profits for themselves. The entire industry has tacitly allowed this unspoken rule until Hyperliquid emerged and completely broke the deadlock.

Hyperliquid has irrefutably proven to the market that you can build a business empire with extremely strong cash flow and continuously empower value to tokens, ultimately achieving market cap leverage and ecological results that far exceed the outcome of greedily pocketing short-term profits.

When screening for this type of asset, the core must ask the following five key questions:

First, economic foundation: Is there a lasting economic surplus and business profit? HYPE and PUMP are the best examples in this dimension, as they can consistently create $1 million to $2 million in real profits every day throughout the year. The income of perpetual contract DEXs is usually more sustainable and has smaller cyclical fluctuations, especially after introducing US stocks and other RWA perpetual contracts. The sustainability of income from token issuance platforms (Launchpads) is often questioned; the market previously determined that platforms like PONS, STONK, and GP could not sustain income, but PUMP has continuously disproven this stereotype.

Second, data transparency: Can these economic surpluses be transparently verified on-chain? The purest and most flawless income occurs entirely on-chain, such as HYPE and PUMP, as they require extremely low trust costs. In contrast, projects like GRASS generate their income entirely off-chain (through private business contracts with leading AI labs), leading the market to question the authenticity of these revenues, even though I believe they genuinely exist.

Third, token vs equity ownership: Is the economic surplus empowering the token or being siphoned off by equity companies? Is there a traditional equity entity quietly draining value behind the scenes? This has sparked widespread debate recently: Venice just completed financing through equity but distributed tokens to the community for free; GRASS also had to urgently hold a communication meeting to clarify that all business value belongs to token holders.

The most typical cautionary tale is SHFL: it is indeed a highly profitable gambling business, but all the real money flows to a traditional equity company registered in Curacao (which just distributed a cash dividend of up to $18 million), while token holders in the secondary market only receive a meager lottery qualification.

Fourth, value capture path: Is value directly deposited to tokens through buybacks or dividends? This is self-evident, but automatically enforced buybacks and dividends through smart contracts (such as HYPE, LIT, SKY) far exceed the transparency and certainty of discretionary buybacks relying entirely on the team's subjective will (like PUMP).

Fifth, trust and generational growth: If dividends are delayed to invest in business growth, is the team truly trustworthy? This model is most similar to traditional venture capital. Tokens like GRASS, ENA, CHIP, and CARDS fall into this quadrant. They clearly state that all business value ultimately belongs to token holders, but are currently reinvesting profits into scaling expansion.

This heavily relies on moral trust in the project team, as token holders do not have legal protection and often lack even a board of directors and audited financial reports. This is why frameworks like the Token Transparency Framework (TTF) launched by Blockworks are particularly important.

Demanding an early-stage startup to distribute all profits too early will undoubtedly stifle its long-term growth ceiling. However, it is also understandable that token holders prefer the certainty of cash dividends now. If holders cannot confirm how retained earnings will ultimately benefit them, the so-called "investing in growth" is essentially asking investors to bet on both the team's business capabilities and future integrity. Automatic buybacks have alleviated this enormous uncertainty today, and I also greatly appreciate the recent positive improvements made by CHIP in clarifying the logic of token value deposition.

In the current market, the golden samples that perfectly meet all five stringent conditions are only HYPE, LIT, PUMP, and SKY. New tokens that can tick all five boxes are extremely rare.

PAPER was one of the best recent attempts; it originally had the potential to generate huge revenue, but unfortunately, the team ultimately abandoned the token because its mechanism design inadvertently created arbitrage loopholes that maliciously attacked exchanges.

I believe the cash flow token track is on the brink of a major transformation before an explosion. HYPE has pioneered the paradigm of high-value-added tokens, while PAPER has revealed the immense allure of this structure. Imagine if a high cash flow business like Polymarket, which rakes in about $20 million in profits monthly, formally issues tokens and deposits all profits to the tokens; it would unleash astonishing valuation potential.

In fact, the Shuffle team is currently exploring the launch of a purely on-chain decentralized casino. If such a system truly lands and uses 90% of the net gambling revenue daily for automatic token buybacks in the open market, SHFL would instantly leap to the top of the entire evaluation list. Buying into projects at the bottom of the list is essentially betting that their teams will genuinely reform and actively advance to the upper right corner.

Looking to the future, I am closely watching the emergence of the next generation of perpetual contract DEX tokens, such as VAR (Variational) and XTEN (Extended). Other quality trading targets worth continuous tracking include ARCUS, ENTROPY, and potential future token issuances from POLYMARKET.

Crypto Endgame: Two Mountains and the Endgame of Token Evolution

In the long history of crypto development, to become a durable hard currency that can traverse multiple bull and bear cycles, there are ultimately only two narrow paths to the summit:

BTC, ZEC, and early HYPE chose to climb the "Mountain of Faith" on the left side; while HYPE, LIT, and PUMP are steadily moving towards the peak along the "Mountain of Cash Flow" on the right side.

Among all digital assets, HYPE is undoubtedly the most comfortable holding experience, as it is not only a high-certainty cash flow asset but is also showing great potential to transform into a lasting faith asset.

In contrast, the vast majority of other tokens, despite repeatedly attempting to climb the peak, ultimately fall into the abyss. This includes new Layer 1 tokens that have long since become excess stock games, as well as those "ancient relic" DeFi tokens that lack real protocol income and cannot provide value back to holders.

Many purely concept-driven narrative speculative products (such as various shallow AI concept coins) attempt to repeatedly ascend the left side of the Mountain of Faith, but in the face of the cold gravitational pull and the laws of time, they will ultimately crash heavily to the bottom.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.