Last week I joined Pete Townsend on Money Never Sleeps for a conversation about token design, value accrual, and what's changing across the digital asset ecosystem. What started as a fairly focused discussion about token economics turned into something broader: ownership, incentives, product development, and the decisions founders make early that shape everything that follows.
As CEO of SVRN and Managing Partner at A100x Ventures, I've spent years evaluating early-stage Web3 companies. One thing I've come to believe pretty firmly is that the most important questions founders face have very little to do with tokenomics spreadsheets. They have everything to do with understanding where value is actually being created, and who it's being created for.
The market is finally asking tougher questions
Pete opened by asking what has changed. Why is value accrual suddenly getting so much attention after years of being largely ignored? My view is that we're seeing a combination of market maturity and regulatory evolution converge at the same time.
For years, many teams were operating in an environment of genuine uncertainty around how tokens would be treated, particularly in the US. That uncertainty shaped token design in ways that often weren't great for investors or users. Projects deliberately avoided building direct relationships between network activity and token value because they were navigating regulatory gray areas. The result was a long period of experimentation that left people asking the same question: what does this token actually represent?
What I've seen over the past three to six months is a meaningful correction. Projects with stronger ownership primitives, clearer value accrual mechanics, and more direct relationships between network activity and token economics are being rewarded in the market. I don't think this is a short-term move. It reflects a more fundamental shift in how the market evaluates these assets.
The test I keep coming back to is: does the token represent ownership of the thing that creates value in the project, or is it something bolted onto a business that would otherwise be a traditional equity story? That distinction has always mattered. The difference now is that the market is getting better at identifying it.
Founders need to decide where value lives
One of the topics Pete and I spent the most time on was the relationship between equity and tokens. People often frame this as a tokenomics question. I think it's more fundamental than that.
At the earliest stage of building a company, founders are making decisions that will shape the economics of that business for years. If you're raising through equity and building a centralized operating company that generates revenue, you're effectively saying value accrues to that company and its shareholders. If you're building a decentralized network where ownership and participation are meant to live at the protocol level, you're saying something very different about where value lands over time.
The challenge is that many teams try to occupy both positions at once. They want the structure and protections of a traditional company while pursuing a token model that implies value will ultimately live elsewhere. Sometimes that works. More often, it creates confusion for investors, for users, and eventually for the founders themselves.
The strongest founders I've seen are clear on this early. They may not have every mechanic figured out, but they have a clear point of view on ownership. That clarity matters because every decision that follows flows from it: fundraising, governance, product design, incentive structures. It all becomes easier to navigate when there's a coherent answer to the question of where value should accumulate.
Conviction matters more than a fully formed token model
Pete asked what I look for when evaluating founders at the pre-seed and seed stage. It's an interesting question because at that point, products are evolving and roadmaps are changing. In many cases, only a portion of the intended system has even been built.
What I'm not looking for is a perfectly designed token model. What I'm looking for is conviction. The best projects we've seen reach scale usually start with a very strong view on why the system needs to be decentralized in the first place. The founder can articulate why ownership should live at the network level, why decentralization creates genuine advantages for users or developers or operators, and why that architecture is central to the product's success rather than just an interesting feature.
You can often sense that direction even if only 60% of the mechanics are fully developed. There's clear inertia pointing somewhere. That's very different from a founder who wants to build a traditional business and retrofit a token later. Those conversations tend to focus heavily on the token itself, because the token still needs justification. In the strongest projects, the discussion is about the network and the product and the value being created. The token becomes an extension of that vision rather than the starting point for it.
Utility has to show up in the economics
Another theme we covered was how value accrual actually works in practice. The most effective approaches I've seen are the ones that reflect the demand economy inside the token itself. There needs to be a legible relationship between the success of the network and the economics of the asset. If users are creating value, if the network is generating real activity, if adoption is growing, there should be a coherent explanation for how those dynamics flow through the system.
For a long time, there was legitimate debate about whether markets would actually reward these mechanics. Projects implemented buybacks and treasury programs only to see limited market recognition. Critics would point to examples where strong fundamentals didn't translate into price performance.
I think we're starting to see that shift. There are still cases where value accrual mechanics haven't moved the needle on price. The Pump.fun example is worth mentioning: $350 million in revenue used to buy back tokens, with price performance that didn't reflect it. But there are meaningful context-specific reasons for that. In contrast, what we've seen with NEAR over the last 60 to 90 days, driven by NEAR intents and the revenue being generated to facilitate buybacks, is a real-world example of fundamentals being recognized and rewarded. The more the market pays attention to utility and genuine value creation, the healthier the ecosystem becomes.
Build the product before you design the token
If there's one thing I'd encourage founders to take from this conversation, it's this: build the product first.
My view on this has been consistent for years. The race to token generation events, the market-maker games, the centralized exchange listings, the whole ecosystem of getting a token into circulation as quickly as possible has never been particularly interesting to me. Those mechanics play on incentives that don't serve long-term value creation.
At the early stage, you still don't know enough. You don't know how users actually behave. You don't know which incentives work. You don't know which behaviors to encourage or discourage. You don't know which parts of the product people genuinely find valuable. All of that comes from usage.
The sequence that has always made the most sense to me is to build the product, understand the user, learn from the market, and then begin designing the economic system that supports those behaviors. Once people are using something and deriving real value from it, you can start asking how that value should be captured inside the network.
This is one of the clearest differences between the current market and prior cycles. The conversation is shifting from how quickly can we launch a token to what are we actually building and for whom. That's a slower path in some respects. But it's the more durable one.
Investor alignment is more important than most founders realize
Toward the end of our conversation, we got into fundraising and alignment, which is where some of the most practical friction tends to show up. At the pre-seed stage, building a cap table around a shared vision is usually straightforward. The challenge emerges as you grow.
Once you're into later financing rounds, you often encounter investors with very different mandates. Some can hold tokens. Some cannot. Some are comfortable with decentralized value accrual models. Others are structured entirely around equity.
That creates real tension. I've seen situations where founders raised early capital around a clear promise: we're building a decentralized system, value will accrue to the token. Then they brought in later investors whose mandates made them unable to participate in that outcome. Everyone is still invested in the company's success, but not everyone is aligned around where value actually lands. Those situations are genuinely difficult to navigate.
This is why alignment from the beginning matters. Product vision, fundraising strategy, ownership structure, and long-term economic design should reinforce each other rather than work against each other.
The question I wish more founders would ask
Pete closed by asking what question I wish more founders came into meetings prepared to answer. My response had almost nothing to do with tokens. The reality of early-stage investing is that what a founder pitches today is often very different from what ultimately reaches scale. Customer feedback changes the roadmap. Market conditions shift priorities. Assumptions prove wrong. That's not failure. That's how startups work.
In our second fund, roughly half the companies have pivoted between pre-seed and seed. The founders who are aggressive and decisive in those moments are generally the ones who succeed. So the question I wish more founders would ask is simply: will you still back us when the moment comes to pivot? Will you still support us on the third iteration, when the original plan has evolved and reality looks different from the pitch deck?
That's the conversation that actually matters, because it determines whether founders have the flexibility to adapt when things don't go as planned. And they never fully do.
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