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Crypto NeedsValuableTokens
Crypto has spent fifteen years proving that tokens can move value. It has spent far less time proving that tokens can hold value.
A token can trade. A token can govern. A token can unlock a feature, vote on a parameter, pay a fee, or sit on a balance sheet.
But the question that now matters is simpler: why should this token be valuable?
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Why should this token be valuable?
Crypto has spent fifteen years proving that tokens can move value. It has spent far less time proving that tokens can hold value.
A token can trade. A token can govern. A token can unlock a feature, vote on a parameter, pay a fee, or sit on a balance sheet.
But the question that now matters is simpler.
Why should this token be valuable?
Not why should it be liquid. Not why should it be listed. Not why should it trend. Not why should it pump.
Why should it be valuable?
That is the question this industry avoided when the market was young, when regulatory lines were unclear, when exchange listings were the terminal event, and when speculation could carry every weakness in the asset underneath.
That era is ending.
Introduction
If you have followed crypto for the last decade, you have felt something changing.
The first era of crypto is well behind us, and with it the belief that every token would become valuable simply because it was scarce, liquid, decentralized, or early. Bitcoin proved that digital scarcity could hold value. Ethereum proved that programmable networks could coordinate global markets. DeFi proved that financial systems could be rebuilt in public. But the token market that followed those breakthroughs learned a more uncomfortable lesson: not every tradable token is a valuable one.
The most glaring sign of this failure is not that tokens go down. All markets go down. The failure is that many tokens cannot explain why they should go up.
They trade. They list. They unlock. They govern. They sit in treasuries. They appear on exchange screens beside Bitcoin and Ethereum.
But when the market asks what the token actually owns, what value flows to it, what rights protect it, or what happens when the underlying protocol is sold, merged, upgraded, abandoned, or acquired, the answer is often silence.
This was not an accident. It was the product of the regulatory world crypto grew up inside.
In 2017, the SEC's DAO Report made clear that token sales could be securities transactions when the economic reality looked like an investment contract. The message was simple: calling something a token did not place it outside the securities laws. Issuers still had to consider registration or an exemption, and trading venues still had to consider whether they were operating securities exchanges.
That guidance shaped the next decade of token design. Founders learned to describe tokens as commodities, utilities, governance instruments, network fuel, membership rights, rewards, or access credentials. The industry did not merely build utility tokens because they were useful. It built them because utility was safer than ownership. A token that looked too much like a claim on value could invite securities analysis. A token that looked like a tool could travel further.
So crypto learned to make tokens useful without always making them valuable.
The compromise worked for a time. It allowed networks to launch. It gave communities a way to coordinate. It gave protocols capital before traditional markets would have understood them. It allowed users to participate in systems that would otherwise have been financed privately. It created the most open capital formation machine in modern financial history.
But it also created the central contradiction of the token market.
The token was the thing everyone could buy. The token was the thing everyone could trade. The token was the thing everyone could price.
Yet in many cases, the token was not the thing that captured the value.
There is a better way.
The last few years have begun to clarify what the market needs. Regulators have moved from a world of broad suspicion toward a more precise language for crypto assets. The SEC's Crypto Task Force says its work includes drawing clearer regulatory lines, distinguishing securities from non-securities, crafting tailored disclosure frameworks, and providing realistic paths to registration. In 2026, the SEC described a taxonomy that includes digital commodities, digital collectibles, digital tools, stablecoins, and digital securities, while also recognizing that a crypto asset itself may be a non-security even when certain transactions involving it can still be securities transactions.
That progress matters. It creates room for better token design.
And the market is already responding.
Hyperliquid has brought one of the most important token questions back to the front of the industry: where does protocol value go? Its documentation states that protocol fees are directed to community destinations, including HLP, the Assistance Fund, and deployers; the Assistance Fund converts trading fees to HYPE automatically as part of L1 execution, and HYPE in the Assistance Fund is burned.
That is not merely a buyback detail. It is a design statement.
Activity creates fees. Fees are routed. Routing affects the token. The market can see the mechanism.
This is what the next era of tokens will require: not vibes, not implied ownership, not governance theater, not a ticker attached to a protocol narrative, but a visible route from value creation to token value.
Why can't the existing market simply do better?
Because the existing market was built to price liquidity, not value. Exchanges are optimized for listing assets, not underwriting the rights beneath them. Venture funds are optimized for private entry and public exit, not long-term token-holder protection. Foundations are optimized for ecosystem growth, not necessarily for routing economic value to the token. Protocol teams are often forced to choose between regulatory caution and economic clarity. And token holders are left buying assets that look like ownership in public but behave like coupons, votes, or nothing at all when it matters.
These structures built the token market we have. They will not build the token market we need.
We at Street Labs are building ERC-S because crypto needs a new standard for valuable tokens. A token should be able to declare what it is, why it should be valuable, where value flows, what holders receive, what holders do not receive, and what happens in the events that determine real ownership: upgrades, migrations, acquisitions, wind-downs, and changes in control.
We are not trying to make every token the same.
We are trying to make every token legible.
Some tokens are commodities. Some are tools. Some are securities. Some are governance rights. Some are claims. Some are access instruments. Some are cultural assets. Some are network fuel. The market can handle that complexity. What it cannot handle forever is ambiguity pretending to be innovation.
The next era of crypto will not be won by the tokens that list the fastest, launch at the highest FDV, or borrow the strongest narrative from Bitcoin.
It will be won by the tokens that can answer a simple question: why should this token be valuable?
ERC-S is our answer.
CHART.1
Washington D.C. — 2017–2026
From token sales to token taxonomy.
The legal vocabulary around tokens has become more precise. The market vocabulary has not caught up.
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Regulatory Clarity
The market problem has become more severe.
The progress matters.
It is now more possible to say that an old coin may be a commodity. It is more possible to say that a protocol asset may not itself be a security. It is more possible to say that a token can start in one posture and end in another. It is more possible to reason about staking, wrapping, mining, distributions, tools, collectibles, stablecoins, and digital commodities with a vocabulary that did not exist in 2017.
The regulatory debate has become more precise.
But the market problem has become more severe.
Because once the regulatory cloud begins to lift, the hidden question becomes impossible to avoid: what is the token actually worth?
Not whether it can exist. Not whether it can trade. Not whether it avoids one legal category or another.
What is it worth? And why?
The old coins have benefited from clearer categories. Bitcoin has a commodity-like narrative. Ethereum has a network, a fee model, a staking economy, and institutional recognition. Certain older assets now have the advantage of time, liquidity, regulatory familiarity, and public-market infrastructure.
But newer tokens have not received the same relief.
Many are down. Many list and decay. Many launch with high FDVs, low float, unlock schedules, thin utility, and unclear value routing. Many trade less like independent assets and more like leveraged exposure to overall crypto liquidity.
The problem is no longer only that tokens may be illegal.
The problem is that many tokens may be legal and still worthless.
That is the harder problem.
While the regulations have lifted for old coins, where are we going? Why are tokens down so much? Why are so many old coins used as extractive tools? Why are there now stories of protocols getting acquired while the token is left with nothing?
That is where the real story begins.
03
How Did We Get Here?
Crypto did not begin with valuable tokens.
Crypto did not begin with valuable tokens.
It began with one valuable token.
Bitcoin was not valuable because it had governance rights. It was not valuable because it entitled holders to cash flow. It was not valuable because a company promised to make it valuable. It was valuable because the market came to believe that a scarce, censorship-resistant, credibly neutral monetary asset could exist outside the state and outside the banking system.
Bitcoin's value model was radical, but it was coherent.
There would be twenty-one million. The issuance schedule was public. The system did not require a company. The asset did not pretend to be equity. The value proposition was simple enough to argue about.
Then crypto tried to generalize the token.
Ethereum added the idea that a token could represent not only money, but computation. ERC-20 made issuance easy. Smart contracts made token economies programmable. ICOs made token sales global. Exchanges made token exits liquid. Venture made tokens institutional. Social media made every token a story.
By 2017, a founder no longer needed to wait for revenue, product-market fit, a traditional financing process, or a public listing. A founder could publish a white paper, sell a token, and finance a protocol before the protocol existed.
This was not merely speculation.
It was speculation with liquidity.
That distinction changed everything.
A startup equity investment is usually locked. A protocol token can trade immediately or soon after. A venture round is priced by a small group of investors. A token can be priced by the entire market. A private company's valuation changes slowly. A token's valuation can change every second.
The ICO era compressed the financing lifecycle.
White paper became seed round. Token sale became IPO. Exchange listing became liquidity event. Telegram became investor relations. Speculation became product discovery.
Some of this was productive. The industry funded infrastructure that traditional capital would not have understood. It created open-source networks with global investor bases. It gave users a stake in systems before those systems were mature.
But it also taught the market the wrong lesson.
It taught founders that tokens were capital-formation tools first and value-bearing instruments second. It taught investors that narrative could matter more than rights. It taught exchanges that listings could be liquidity events. It taught teams that value could accrue to foundations, companies, treasuries, insiders, and service providers while token holders received governance or access.
The token became a financing wrapper.
Not always. Not everywhere. But often enough to become the default suspicion.
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The ICO Was the First Token Return Machine
Speculation before utility.
The ICO era produced some of the most important networks in crypto. It also produced some of the most revealing failures.
Block.one's EOS sale raised billions and later settled SEC charges over an unregistered ICO. Filecoin raised more than $250 million in 2017. Tezos raised roughly $232 million and then became a case study in foundation governance disputes and delayed delivery.
The point is not that every large ICO failed.
The point is that the amount raised was often easier to measure than the value delivered to token holders.
During the ICO era, the market rewarded the idea that a token was early access to a future network. The more ambitious the future, the larger the valuation. But many token buyers did not have a clean claim on the future they were funding. They had exposure to a tradable asset whose relationship to the underlying enterprise was deliberately incomplete.
This produced the first major token-return driver: speculation before utility.
A token could rise because a network might exist. A token could rise because a listing might happen. A token could rise because a category might become hot. A token could rise because investors believed later investors would pay more.
The market was not irrational. It was responding to the structure it had been given.
The structure said: buy the token because the company cannot sell you equity, the network is not finished, the rights are limited, the upside is undefined, the float is small, and the story is large.
That is not a value model.
That is a speculation model.
Vitalik Buterin captured the risk bluntly in a widely circulated 2026 warning: "If people are only gambling," he said, "this industry will die."
The industry did not die. But the warning remains correct.
Speculation can start a market. Speculation can bootstrap liquidity. Speculation can fund experiments. Speculation can make impossible ideas financeable.
But speculation cannot be the only thing a token does.
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What Drove Token Returns
Every token era had its own return driver.
Every token era had its own return driver.
The Bitcoin era rewarded monetary belief. The ICO era rewarded early access and future network speculation. The DeFi era rewarded yield, governance, and liquidity mining. The NFT era rewarded cultural scarcity. The exchange-token era rewarded fee discounts, burns, and platform growth. The venture-token era rewarded private-market markups, low-float listings, and unlock timing. The new era is beginning to reward explicit value routing.
The problem is that crypto kept confusing these drivers.
A governance token was priced like equity. A utility token was marketed like ownership. A memecoin was traded like a venture investment. A gas token was treated like a macro asset. A DeFi token was valued as if fees would accrue to holders even when they did not. A protocol token was assumed to benefit from an acquisition even when the acquirer bought only the company, team, or IP.
This is why tokens break.
Not because tokens cannot be valuable.
Because their value model is often not declared.
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The Venture-Token Era
The listing itself became the liquidity event.
The venture-token era is where the problem became most obvious.
By 2024 and 2025, many tokens did not fail because no one wanted crypto exposure. They failed because the listing itself became the liquidity event.
A token would launch at a large fully diluted valuation. The circulating float would be small. Early investors and insiders would have future unlocks. Retail buyers would get access at the public listing. The market would price the asset on narrative and scarcity first, then gradually absorb supply, disappointment, and the absence of a clear value route.
The result was predictable.
Empirica's seven-year Binance listing analysis found that 2024 Binance-listed instruments, measured from first-day close, averaged +2.78% the next day, +0.40% in the first week, -1.76% in the first month, -22.66% after three months, and -37.64% after six months. Only 5.5% of 2024 listings that completed six months of trading showed positive returns.
A separate report citing Messari analysis found that a simple portfolio allocating $100 into each Binance 2025 spot listing, excluding stablecoins, would have fallen from $9,200 deployed to roughly $2,600 by March 2026. That is about -71%.
This is not an exchange problem alone.
It is a token design problem.
Listings made tokens liquid.
They did not make tokens valuable.
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The Liquidity Event Problem
When every token is bought the same way.
The 2025 listing portfolio is the cleanest expression of the problem: public liquidity without token-level underwriting.
A market can absorb a few ambiguous assets when liquidity is abundant. It cannot absorb an entire asset class built around ambiguity.
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Why Old Coins Became Extractive
The token sits beside value, not necessarily inside it.
Old coins are not all the same.
Bitcoin is not an exchange token. Ethereum is not a governance token. Solana is not a DeFi fee token. A memecoin is not a stablecoin. A staking token is not a private-market instrument.
But many old tokens share one structural feature: the token sits beside value, not necessarily inside it.
This is the extractive pattern: the protocol creates activity; the company, foundation, insiders, market makers, service providers, or early investors capture much of the economic value; the token holder receives liquidity, governance, access, or narrative; the market prices the token as if it represents the whole system; when the whole system is sold, financed, or restructured, the token holder learns what they actually owned.
That last step is where the industry is now.
The acquisition problem has made the gap visible.
Recent crypto acquisitions have shown that a company, team, terminal, brand, or technology can be acquired while the token remains outside the transaction. BlockBeats described a pattern in which acquirers buy teams or IP while token networks and token holders are left separate; its examples include Interop Labs / Axelar, Vertex, Padre, and Vector.fun. Blockworks reported that Padre's token offered access and fee discounts, but after the terminal was acquired, the token's utility was discontinued and the price fell sharply; token holders did not have shareholder-style protections.
This is the brutal lesson.
A token can be liquid. A token can be public. A token can be visible. A token can have thousands of holders.
And still, when the underlying business is acquired, the token can be left with nothing.
That should not be a surprise.
It should be treated as a design failure.
09
The New Regime
A valuable token has a reason to exist on the buyer’s balance sheet.
The new token regime begins with a simple question: what makes a token valuable?
Not legally permissible. Not exchange-listed. Not backed by a famous fund. Not integrated into a protocol interface. Not mentioned in a white paper.
Valuable.
A valuable token has a reason to exist on the balance sheet of the buyer.
That reason can take different forms.
A token can be valuable because it is scarce money. A token can be valuable because it is required to use a network. A token can be valuable because it receives fees. A token can be valuable because it is burned by protocol revenue. A token can be valuable because it grants enforceable rights. A token can be valuable because it controls a treasury. A token can be valuable because it represents a real-world claim. A token can be valuable because it is the settlement asset of an economy.
But it cannot be valuable only because it exists.
The new regime is not anti-token.
It is anti-empty-token.
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Hyperliquid and the Return of Value Routing
Where does protocol value go?
Hyperliquid is important because it moved the conversation from token vibes to token mechanics.
Hyperliquid describes itself as a performant blockchain for a fully on-chain financial system, with an L1, HyperCore, on-chain perps and spot order books, and HyperEVM. But the more important detail for token design is fee routing. Hyperliquid's docs state that fees are directed to community destinations, including HLP, the Assistance Fund, and deployers; the Assistance Fund converts trading fees to HYPE automatically as part of L1 execution; HYPE in the Assistance Fund is burned, removing tokens from circulating and total supply.
That is the part the market can understand.
There is activity. Activity produces fees. Fees are routed. Routed value interacts with the token. The token supply is affected. The mechanism is visible.
This does not mean Hyperliquid solved every token problem. Buybacks and burns are not magic. They can be reflexive. They can overstate durability. They can work in bull markets and disappoint in bear markets. They can be governance-dependent, treasury-dependent, or volume-dependent. They do not automatically create legal rights.
But they answer a question most tokens avoid.
Where does protocol value go?
That question is the new regime.
The old token market asked: can this token go up?
The new token market asks: what forces make this token worth more?
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The Valuable Token Test
A token is valuable when the market can answer six questions.
A token is valuable when the market can answer six questions.
First: what is the token's purpose? Is it money, gas, access, governance, collateral, yield, identity, a right, a receipt, a claim, a scarce collectible, or something else? A token that cannot state its purpose will be priced as generic crypto beta.
Second: what creates demand? Demand can come from usage, settlement, collateral requirements, fee discounts, staking, burns, treasury policy, rights, access, or real-world claims. But demand must be more than "people will want it."
Third: what constrains supply? Supply discipline matters. Float matters. Unlocks matter. Issuance matters. Treasury behavior matters. Buybacks matter. Burns matter. The market has become more sensitive to high-FDV, low-float structures.
Fourth: where does value go? This is the core question. Fees can go to a company, a foundation, validators, users, a treasury, a buy-and-burn route, a distribution route, or nowhere near the token. A token without value routing is speculation on someone else's value capture.
Fifth: what rights does the holder have? Governance is not always a right. Voting is not always control. Access is not ownership. Discounts are not residual claims. Token ownership is not equity unless the structure makes it so.
Sixth: what happens at the end? What happens if the protocol is acquired, the team sells the IP, the foundation shuts down, the company pivots, the revenue route changes, the token migrates, governance is captured, or the treasury is spent?
Most tokens describe launch.
Very few describe terminal treatment.
But terminal treatment is where value is proven.
- +What is the token’s purpose?
- +What creates demand?
- +What constrains supply?
- +Where does value go?
- +What rights does the holder have?
- +What happens at the end?
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The Fragmentation of Value
Crypto has one market and many asset types.
Crypto has one market and many asset types.
That is the fragmentation of value.
Bitcoin is a monetary asset. Ethereum is a settlement, compute, staking, and monetary hybrid. Solana is a high-throughput network token. BNB is an exchange and ecosystem token. Aave is a DeFi governance and risk-management token. Uniswap is a governance token tied to a major exchange network but not automatically a fee claim. Maker / Sky is a monetary-governance system. Stablecoins are tokenized dollars. Memecoins are attention assets. RWAs are claims on off-chain instruments. Tokenized equities are securities. Compute tokens may be network credits. Social tokens may be reputation or community access. ERC-S tokens are designed to declare their value route.
These assets should not be priced the same way.
But they often are.
The reason is liquidity.
When capital enters crypto, it usually enters through the largest and most liquid assets first. Bitcoin sets the risk tone. Ethereum and large caps follow. Then mid-caps. Then smaller alts. Then high-beta narratives. When capital exits, the process reverses. The whole market reprices together because the marginal buyer is not underwriting every token independently. The marginal buyer is often buying exposure to the cycle.
That is why altcoins are rarely valued independently from the overall market.
They are valued as a proxy for liquidity, risk appetite, and Bitcoin-led momentum.
Independent token valuation is hard. There is no universal token balance sheet. There is no standard rights schedule. There is no uniform value-routing disclosure. There is no common acquisition treatment. There is no consistent way to compare fee claims, burns, governance rights, access rights, treasury rights, and off-chain company value.
So the market simplifies.
It prices Bitcoin. It prices liquidity. It prices narratives. It prices exchange access. It prices float. It prices beta. It prices everything at once.
The result is a market where every token is different but many tokens trade as if they are the same.
That is fragmentation.
Not because value is absent.
Because value is unstandardized.
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The Bitcoin Proxy
When value routes are unclear, tokens are priced by liquidity.
CoinMarketCap’s own altcoin-season framing defines an altcoin season by whether 75% of the top 100 coins outperform Bitcoin over a period. That framing is revealing: the market often asks whether altcoins, as a group, are outperforming Bitcoin, not whether each token’s independent value model is being correctly priced.
When value routes are unclear, the market defaults to the strongest available proxy.
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The Market Needs Fragmentation
Not sameness. Legibility.
Fragmentation sounds like a failure.
It is not.
Fragmentation is the natural result of crypto becoming many things at once.
The mistake is not that tokens are different.
The mistake is that different tokens are forced through the same market language.
A stablecoin should not be valued like a memecoin. A governance token should not be valued like equity unless it has equity-like economics. A gas token should not be valued like a revenue share. A protocol token should not be marketed like ownership if the company can be acquired without the token. A tokenized security should not hide behind utility language. A utility token should not pretend to be a residual claim.
The market does not need one valuation model.
It needs a standard way to identify which valuation model applies.
That is what fragmentation requires: not sameness, but legibility.
Every token should be priced uniquely. Every token should disclose what makes it valuable. Every token should declare where value goes. Every token should explain what holders own, what they do not own, what can change, and what happens in terminal events.
That is the work.
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A New Model
The next generation of tokens will declare value.
The next generation of tokens will not be defined by avoiding value.
It will be defined by declaring value.
For years, token design was shaped by fear. If a token looked too valuable, it might look like a security. If it had too much economic exposure, it might create regulatory risk. If it promised too much, it might create liability. So tokens were made weaker. Rights were made softer. Value routes were left implicit. Governance became a placeholder. Utility became a shield.
But a token that avoids value too well becomes uninvestable.
The industry now needs a better answer.
Not every token should be equity. Not every token should receive revenue. Not every token should have a claim. Not every token should be a security. Not every token should be a commodity. Not every token should be governance. Not every token should be scarce money.
But every token should be clear.
ERC-S is Street Labs' attempt to create that clarity.
ERC-S is not a claim that one token model fits all assets. It is the opposite. ERC-S starts from the premise that tokens are fragmented, that value is fragmented, and that the market needs a way to price that fragmentation correctly.
The problem is not that tokens are different.
The problem is that the differences are not standardized.
ERC-S is a framework for valuable tokens: tokens that can declare their purpose, value route, holder treatment, and economic structure in a way that markets, builders, users, and regulators can inspect.
The goal is not to make every token valuable by assertion.
The goal is to make value legible where value exists.
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The ERC-S Thesis
A token should be priced according to the value it actually carries.
The ERC-S thesis is simple: a token should be priced according to the value it actually carries.
That requires a new discipline.
Founders must stop treating tokens as a way to finance companies while avoiding the obligations of ownership.
Investors must stop pretending that every liquid token is a claim on the full enterprise.
Exchanges must stop treating listing as the end of underwriting.
Protocols must stop routing value away from the token while asking the public market to price the token as if it owns the protocol.
Communities must stop accepting governance as a substitute for economics.
The next phase of crypto will require more precise instruments.
Some tokens will be commodities. Some will be tools. Some will be securities. Some will be payment assets. Some will be governance rights. Some will be protocol collateral. Some will be revenue-linked. Some will be equity-like. Some will be none of these.
The market can handle that complexity.
It handles complexity everywhere else.
Public equities have sectors, accounting standards, shareholder rights, disclosure regimes, M&A rules, and valuation methods. Bonds have covenants, seniority, maturity, collateral, and ratings. Commodities have supply curves, inventories, and settlement mechanics. Real estate has leases, cap rates, zoning, and property rights.
Crypto has tickers.
That is not enough.
A ticker is not a value model.
ERC-S is an attempt to move the market from ticker-first tokens to value-first tokens.
Call to Action
Crypto does not need fewer tokens. It needs better tokens.
Crypto does not need fewer tokens.
It needs better tokens.
It needs tokens that do not hide from value. It needs tokens that do not pretend governance is economics. It needs tokens that do not leave holders behind when the company is sold. It needs tokens that do not rely on Bitcoin liquidity to explain every price. It needs tokens that do not ask the public market to buy ambiguity.
It needs tokens that can be priced.
The first era proved that digital scarcity could exist. The second era proved that programmable tokens could form capital. The third era proved that open financial networks could be built. The fourth era is proving that empty tokens decay.
The next era has to prove that tokens can be valuable.
That is what we are building at Street Labs.
ERC-S is our framework for that future: a standard for declaring how a token carries value, how holders are treated, how value is routed, and how markets should understand what they are buying.
The work is early. The problem is large. The market is ready.
Join us in this work.
We are hiring.