Why Your Tokens Keep Going Down: A Love Letter to Broken Incentives

And every time, someone steps up with a thread explaining that tokens are broken, founders are confused, and VCs are… Well, VCs. 

So here’s my quick two cents, a warm-up before a bigger deep-dive later on why the token world feels like Neverland, and what actually needs to change.

Let’s start with the basics: crypto is basically capital coordination technology. That’s it. It moves money faster than a five-year-old running after an ice-cream truck.

But speed comes with side-effects. When capital can flow in and out with a single click, it means it can also abandon you with a single click. That’s why tokens that list at sky-high FDVs often end up doing one thing: going down.

Not because founders are evil, but because they forget that fast money comes with fast exits.

Now here’s the messy part: markets are basically giant incentive machines, and everyone in crypto has a reason to list at a ridiculous FDV. VCs want it. Founders want it. Exchanges want it. Market makers want it.

It’s like a group project where everyone cheats and then acts surprised when the teacher catches them. Back in 2021–2023, high FDVs were the meta and nobody cared about revenue. 

But markets, as always, are truth-detecting machines. Retail got burned. ICOs got weird. Exchanges played games. And when the marginal buyer disappeared, suddenly everyone remembered revenue exists.

But even revenue isn’t the real problem. Smart contracts power some of the most profitable businesses on the planet. Hyperliquid, Pump, Aave, Uniswap, Tether, they move more capital than many traditional giants. So what’s broken? Simple: tokens don’t come with rights. 

You can buy UNI today, but good luck earning anything from Uniswap until the foundation stops taking long vacations before enabling fee switches. Pump generates a million in fees per day, but token buyers get… the joy of being included. Yay?

Founders have no incentive to tie real revenue to tokens because that comes bundled with DAO drama and nobody voluntarily signs up for 50,000 strangers yelling on Discord about governance proposals.

Meanwhile, DATs cracked open the door to TradFi, and surprise: they actually want to understand the “why” behind crypto valuations. Ironically, the projects with the best real revenue now trade like traditional fintech firms. 

And with AI mania, equity volatility, and geopolitical noise, TradFi hasn’t exactly been bored enough to gamble on tokens lately.

But maybe the biggest existential challenge is cultural. Crypto still suffers from the Peter Pan syndrome. L2s throw raves at conferences, ecosystem leads feud on Twitter, and marketing teams obsess over clicks instead of who’s actually clicking. 

Despite more users, more revenue, and more apps than in 2022, the ecosystem still can’t convince the world to value it.

And sure, TradFi isn’t perfect either — corporate governance is messy everywhere but at least it has a stabilizing force: capital that sticks around. 

In crypto, the big funds formed in 2022 mostly got cooked betting on liquid tokens, and the few operators who can bridge crypto and TradFi have little incentive to stay when the game is dominated by social signaling and exchange listings.

So here we are: founders searching for capital that won’t disappear, and investors searching for founders who won’t disappear. Both are rare species. Trust has evaporated. And no revenue alone won’t fix it. 

Thinking that is like believing that assembling airplane parts in your garage will magically produce a working jet. You need governance, incentives, revenue design, and an aligned ecosystem from day one.

Traditional tech took decades to mature. Apple, Windows, Linux those communities didn’t sell their equity every 18 months. They built. They committed. They stuck around.

Crypto will get there too. But only if we start with something simple: being honest about what’s broken. Sometimes that’s the first step toward fixing anything.

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