TAU Labs

Some random thoughts on the token <> equity value topic (not VVV specific, but a general discourse) after this video. PS, I've never interacted with @ErikVoorhees, but he seems like an aligned chad (his pro-crypto statements at tradfi interviews, decentralization, privacy, etc.) The issue is that alignment is no longer enough of a justification, given how many alignment stories fell through. So let's put that moral stuff aside and look at the arguments. First of all, there have been countless cases where there was a network token (staking, paying fees for usage as a license model granting access, etc.) + an equity company being one of the stakers / nodes working on adoption of the network. It's an old model which might feel like a symbiosis. A token granting usage of software over periods of time is not far from that. In all cases similar to this, clients & users would pass through a centralized equity company and pay money for some service in fiat - while the company would then buy the token, burn it, stake it for them, or pay fees on their behalf somehow else. 1. All things being equal, $100 of inflow is $100 of inflow. You can be coy with the market long enough, but the pie size is the same end of the day. End of the day, you will be left deciding how much of that goes into equity and how much into the token. 2. A company holding a lot of tokens is not a strong argument, I don't know how they make themselves believe that. Holding many tokens is the case for almost every company, that just means they can tap into 2 bags at the same time. And they will always get rid of the second tier citizen first (which is the token in case an equity structure is present). That's simply a must. Back to the model: it's potentially doable if new, other for-profit entities start working on adoption alongside the original company - and the eventual benefactor is then the network (token) itself. There is a bit of competition among such providers (most likely geo-focused, that was it's less cutthroat). But that must mean that the value clients pay for is in the network itself (and not obfuscated end-user products where clients don't ever see the network itself). Basically the value has to remain onchain, but that means that those for-profit entities are simply well-branded gateways (resellers) with little pricing power themselves. And eventually we are left with the same conclusion: conflict of interest, meaning equity + token is a bad model. Anyway, if I read it right, Erik kinda confirmed the issues which are tbd how to deal with: x.com/ErikVoorhees/s…. There are ways to deal with it, but each one of them assumes acting a little bit altruistic - and we all got burned by that already. All in all, this damage control video doesn't help (gg on being vocal about investments and trying to protect your founders engaging in discourse - but do the same for more questionable cases too). Haseeb is good at selling his own narrative. As itself, the VVV DIEM model is interesting (I dont hold any, this aint a shill). Would love to see AI compute markets be more onchain (with proper structures) and turn that part of the market financially-online.

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