Opinion by: Daniel Taylor, Zumo Policy Director
The CryptoX community believes that tokens are toasts. That’s why they’re right – dead.
If there is a chart that summarizes today’s crypto token dollar, it would be Bloomberg Comparison of chart packaging bitcoin (BTC) Against Altcoin Basket. Bitcoin holders are rejoicing and looking at its highest level all-time. The tokens were bleeding and bruised, seeing their holdings wither while Bitcoin soared.
As BTC decreases 11.6% of the average retail investors’ portfoliothis is a painful division. This is the story of how tokens fail and why there are still opportunities for tokens.
What’s wrong with the token
The intouchable token van lowers three famous elements.
Ironically, cryptoprotein succumbs to internal concentrations, almost entirely non-publicly capturing value.
Most large-scale crypto projects for tokens have been launched in recent years Reserved for teams and private supportersonly a minority reserved for the public.
Most tokens will be considered “normal”, i.e., private fundraising rounds, and after public disclosure, the token should experience 95% depreciation.
That’s not something anyone should accept.
Utilities and governance tokens are misunderstood by investors as passive price appreciation tools. One wants to believe that when there are often active protocol measures (staging or liquidity provision), passive token holdings can be directly enjoyed in network or application value.
The price list of famous utilities and governance tokens has made this confusion and the general lack of correlation between tokens and stock style revenue sharing. This is aimed at a few token-based projects and first earn links.
Investors are mainly covered in the “crypto” token market. This means there is no large-scale (legal) access to the tokenized form of “real world” assets, whether it is stocks, bonds, or any other existing assets.
In short, this is how we arrive: Most cryptocurrencies have been working to maintain long-term constructive market performance.
Great Token Revitalization
Despite this, writing is still on the wall, finally solving long-standing structural flaws. In token fundraising activities, frameworks such as the EU market for crypto assets (MICA) show how regulations drive innovation and provide guardrails.
With proper disclosures, EU investors now have a regulated framework to participate in public token quotes. This spurred a wave of universal access token fundraising projects that sought to revitalize the initial coin offering the best of the spirit: open the public to gain merit-based early investment opportunities rather than contact, regulatory exclusion or privileged status.
In the token structure, emerging regulatory clarity in expectations of token issuers lays the foundation for better quality assets.
Related: The real world asset token is the new ETF-CoinFund president
Token designs that avoid providing tangible investor value are often shaped by regulatory ambiguity and the desire is not captured by traditional investment regulation. But, as the UK’s emerging approach to token products suggests, anyway, current regulations will go into crypto tokens. It doesn’t matter whether you offer a “backless” crypto asset or a more secure token. The concepts applied – all persons’ asset trading authorization, market abuse control, investor information documents and internal disclosure – all persons are the same.
Apart from the burden and the necessary adaptation, this is a long-term good thing.
Tokens can be designed from the outset to capture holder values. Not only that, doing anything else will no longer be an option. Strict token disclosure will soon expose manipulated token learning. Centralized execution of detailed due diligence requirements presented on the site will prevent all assets except the highest quality assets from reaching extensive transactions.
This never ruled out investors’ free choice in a diversified setting. As far as token design is concerned, it will highlight where the emperor has no clothes.
Finally, in the real world assets (RWAS) space, crypto investors can expect to be able to invest in the entire token asset, not just crypto-local tokens. The provision of tokenized RWA is primarily a legal issue, not a technical issue. How are underlying assets and rights guaranteed? The government needs to be the tokens that require traditional finance.
Both are going all out. And BlackRock, etc. Developing their first tokenized product and publicly embraces the tokenized narrative, the government continues to reveal strategies to embed tokenization into the next generation of financial pipelines. Combined, it provides investors with a variety of exposures that “crypto-only” portfolios cannot.
Long live tokens
The combined effect of these powers is profound. Where retail direct investment is blocked, this is the path to major fundraising. If the project is disconnected from the fundamentals, a structured investment framework appears. A wide range of token investment types can be offered in the case of centralized investment options.
The future of convergence is one of the tokenizations that will permanently be embedded in the capital markets and is also a generally decentralized application that flows directly to global holders bases.
It needs to be cleared and reinvented. Also, do not write tokens.
Opinion by: Daniel Taylor, Zumo Policy Director.
This article is for general information purposes and is not intended to be considered legal or investment advice. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or represent Cointelegraph’s views and opinions.
