Network tokens vs Company tokens

Nov 23, 2025

Every time a big acquisition happens in crypto, the same question comes up: what happens to the token? When Pump acquired the Padre trading terminal, $PADRE holders discovered that nothing tied their token to the actual business. The same debate is now happening with Coinbase’s acquisition of Tensor. The reason this keeps happening is that most tokens today are trying to do something tokens were never designed to do. Tokens originated to solve a coordination problem. BTC inflation incentivizes PoW, ETH and SOL inflation incentivize PoS and keep validators accountable with slashing. Decentralized networks are hard to start because you need many independent participants (validators, stakers, builders, users) to show up before the system is useful. Tokens help bootstrap a network by giving early participants an incentive to join before it has value. Once a network reaches escape velocity, the token stops being about bootstrapping and becomes an integral part of the network’s structure. At that point, the network no longer depends on any single company. If Consensys or Solana Labs disappeared tomorrow, ETH or SOL wouldn’t go to zero, because the thing they coordinate, the network, has already become independent. Validators are producing blocks, stakers are staking, and builders are building products that users want. The network isn’t the company, and as a byproduct, its token is resilient. The definition of network tokens includes decentralized protocols whose value accrual comes from operations without human intervention or control.

Company tokens are different. They don’t solve a coordination problem because there’s nothing to coordinate. The “network” is just the company and its users, and the token depends entirely on the team’s continued development of the product. Company tokens can have noble intentions, like distributing fees or raising capital from users, but it doesn’t change the fact that the main value driver is the team and the company’s effort as opposed to a decentralized set of participants. Sometimes the team genuinely wants to decentralize, but until it actually happens, the token is still centralized in practice. Other times, the product was never a network to begin with, so the token has nothing fundamental to attach to. In both cases, the value of the token comes from the company’s effort, which is exactly what equity is supposed to represent. Calling it a token doesn’t change the underlying physics. That’s the test you should use for any token: If the team disappeared tomorrow, would the token survive?

If not, then what you’re looking at isn’t a network token. It’s equity without rights. A MetaDAO-style ownership coin is an interesting middle ground because it replaces trust in a team with trust in smart contracts and market-driven incentives. If the project stops delivering or the team leaves, the contract rules can unwind the treasury, mitigating losses for investors. However, it assumes the team concedes control over the company treasury to the market, which comes with its own set of problems. Most teams issuing tokens don’t want a system that lets short-term-oriented investors dictate the fate of their early-stage companies. The other problem is that futarchy with programmatic treasury management can’t magically turn a company token into a network token. They can’t summon a new team or change how the token accrues value. So while it is an interesting concept, it is not a silver bullet and no market structure can erase the distinction between value created by a network and value created by a company.

People know this intuitively, but they don’t like the implications. Crypto attracts people who want the freedom of unregulated markets. But when something goes wrong, when a company gets acquired, shuts down, or pivots, the same people complain that they weren’t protected. They want the freedom of unregulated assets but the guarantees of regulated ones. But tokens can’t have both. This is the pattern behind every “what happens to the token?” moment. If you’re building a company, issue equity. If you’re building a network or a decentralized protocol, issue a token.

And if you’re not sure which one you’re building, don’t issue anything yet.