this was a good read but let me tell you 3 reasons why smart investors always want equity 1 > design failure it's the way this space is designed. most teams/projects intentionally don't design their tokens to generate revenue because it increases their risk of been treated as securities. if they give their tokens cash flow or ownership rights, they are basically lighting fire under their ass. (SEC and CFTC will have a field day) that's why most companies (or any company that wants to play it safe) tend to make all the good money through equity while they leave the token to do what most tokens do (go down) and if you hired good lawyers they'll advice you to take this path. 2 > exits when a company gets acquired, the buyer buys shares (equity) in the company. so if the token also has ownership rights, you've now created another problem because the buyer has to deal with thousands of tokenholders and majority of them are anonymous. keeping the tokens weak is better for the founders because a strong token makes exits harder for them. 3 > liquidity mismatch equity is illiquid, founders and VCs can't just wake up and dump their shares on the market because they're locked in for years and they only really get liquidity through an IPO/acquisition. but tokens are not like that, they're liquid and tradable from day 1. and this = more disalignment becauese the people holding equity are incentivized to maximize the long-term value of the company, while token holders are often left with an asset that has weaker economic rights by design (so they dump it because why not?) and that, my frens, is why smart investors prefer equity.

@levithefirst yeah agreed all around. main issue is the lack of alignment between equity-holders and token-holders, and the fact that insiders can have both and retail is only able to buy the token

@levithefirst Equity is good but only for credible companies in crypto, most founders will go for tokens because it's an easy way for them exit and crime

@levithefirst thanks for sharin this

@levithefirst if the token isn’t designed to capture value, why should the market continue assigning it value?

@levithefirst im pretty sure i have said it a while ago these guys dont care about the health of their token (only a few cases like hl) they only care about pumping up the price long enough to exit I'd read this article

@levithefirst This is the best breakdown on equity I've read here so far Thanks for sharing! Bookmarked

@levithefirst Well explained here bro and this is what I tell most people that these team members have equity and are the ones dumping their tokens

@levithefirst aside to make profits, I don't think most people hold token with hopes of equity, with the exception of governance tokens

@levithefirst Both of you are right and that's the problem. Tokens were never meant to compete with equity. The second they look too similar, regulators show up. So founders keep them weak on purpose. Retail just never got the memo that the weakness was always part of the plan.