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Insight: Tokens should capture on-chain value, while Equity should capture off-chain value

By: theblockbeats.news|2025/12/24 04:16:09
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BlockBeats News, December 24th, Jake Chervinsky, Chief Legal Officer of the cryptocurrency venture capital firm Variant Fund, posted on social media that "the debate on tokens versus equity is just beginning. Many crypto projects were born during Gary Gensler's tenure as the SEC chairman, a time when intense regulatory pressure forced development companies to channel almost all value into equity rather than tokens. Now, the policy environment is changing, new opportunities are emerging, and understanding how tokens and equity can (or cannot) work well together will require a significant amount of time and experimentation. And this experimental phase is starting now."

"I don't have a specific stance on Aave's situation, I just want to emphasize one point: clarity is always the most important. Token holders must clearly know what they own, what they can control, and what they cannot control. The design space for capturing token value is extremely broad, far exceeding that of traditional equity. I believe that for quite some time, it is unlikely that a standardized token model will emerge like stocks. We believe that tokens should carry on-chain value, while equity should carry off-chain value. The core innovation unlocked by tokens is self-sovereign ownership of digital assets. Tokens allow holders to directly own and control on-chain infrastructure without relying on off-chain intermediaries."

"Off-chain value is different. Token holders cannot directly own or control off-chain income or assets, so in most cases, this value should belong to equity rather than tokens. Of course, other models may also work. Some projects may choose a single-asset model with no equity at all; other projects may decide to treat their tokens as tokenized securities and comply with new SEC rules for this market in the future."

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