Author: Mike Dudas, Founder of The Block and 6th Man Ventures
Compiled by: Ken, ChainCatcher
There is no simple or "one-size-fits-all" answer to whether a "dual token + equity" structure is feasible. But one core principle is that you must be confident that the team is not only absolutely excellent but also has a long-term mindset, committed to building a founder-led, enterprise-level business that can last for decades, like Changpeng Zhao.
I believe that for application-layer projects that require long-term leadership, in many cases, token mechanisms are actually inferior to equity structures. For example, you can see that many founders of DeFi 1.0 protocols have mostly left their projects, many of which are struggling and essentially being maintained by DAOs and other part-time contributors in "maintenance mode." It turns out that DAOs and token-weighted voting are not good mechanisms for making sound decisions for projects (especially at the application layer); they cannot make decisions quickly and lack the "founder-driven" level of knowledge and capability.
Of course, a pure equity model is not absolutely superior to tokens either. Binance is a strong example—tokens enabled them to offer transaction discounts, staking for airdrops, access rights, and other benefits related to the core business and blockchain, which equity ownership cannot clearly carry.
"Ownership tokens" also have their limitations and are currently difficult to apply directly within products or protocols. Decentralized applications and networks are fundamentally different from traditional companies (otherwise, what is the point of this industry?), and pure equity is clearly less flexible than tokens. Of course, "equity+" type token designs may emerge in the future, but this is not the current reality (and the lack of market structure legislation in the U.S. makes issuing pure equity-like tokens with direct value capture and legal rights still risky).
In short, you can envision a scenario (as Lighter describes): an equity entity operates on a "cost-plus" model, serving as an engine for a token-driven protocol. In this architecture, the goal of the equity entity is not profit maximization but rather maximizing the value of the protocol token and ecosystem. If this model works, it would be a huge benefit for token holders. Because you have a well-funded Labs entity (e.g., Lighter has a token treasury for long-term development), and the core team holds a significant amount of tokens, they have a strong incentive to drive token value (while maintaining the crypto-native and on-chain nature of the core token design, separating it from the structurally complex associated Labs entity).
In this model, you do need a high degree of trust in the team, because in most current cases, token holders do not have strong legal rights. Conversely, if you don't believe the team can execute and create value for the tokens they heavily invest in, why would you participate in the project in the first place?
Ultimately, it all comes down to the team's capability, credibility, execution, vision, and actions. The longer a great team stays in the market and delivers on their promises, the more their tokens will exhibit the "Lindy effect." As long as the team maintains good communication and clearly directs value to the token through buybacks, substantive governance, and utility in the underlying protocol, we will see the highest-quality tokens—even those with equity/Labs entities—explode in 2026.
