The debate about tokens versus equity is just beginning. Many crypto projects were born during the era of former SEC Chairman Gary Gensler, when strong regulatory pressure forced development companies to direct almost all value towards equity rather than tokens. Now, the policy environment is changing, and new opportunities are emerging.
It will take a lot of time and experimentation to figure out how (or if) tokens and equity can work well together. This experimental phase is starting right now. I don’t have a specific stance on Aave’s situation, but I want to emphasize one point: clarity is always the most important. Token holders must clearly understand what they actually own, what they can control, and what they cannot control.
The design space for value capture in tokens is extremely broad, far exceeding that of traditional equity. I believe that for a considerable time, it will be unlikely to form a standardized token model like stocks. We believe that tokens should carry on-chain value, while equity should carry off-chain value. The core innovation unlocked by tokens is self-sovereign ownership of digital property.
Tokens allow holders to directly own and control on-chain infrastructure without relying on off-chain intermediaries. Off-chain value, however, is different. Token holders cannot directly own or control off-chain income or assets, so in most cases, this value should belong to equity rather than tokens. Of course, other models may also work; some projects may choose a single asset model with no equity at all, or tokenized securities under future SEC rules.
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