Designing Tokens That Create & Capture Value

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In the rapidly evolving world of blockchain and decentralized protocols, one critical question continues to challenge investors, developers, and users alike: What gives a token real, lasting value?

Many crypto protocols generate immense utility—facilitating trades, enabling staking, powering games, or hosting decentralized applications. Yet, surprisingly few of their native tokens effectively capture the value they help create. Take Uniswap, for example. It processes billions in trading volume and generates substantial fees, but none of that revenue flows directly to $UNI token holders. The protocol creates value; the token does not capture it.

This disconnect highlights a crucial shift the industry must make: moving beyond purely speculative token models toward productive assets that generate measurable returns. To assess a token’s true potential—and arrive at a meaningful valuation—we must analyze both value creation and value capture.

Value Creation vs. Value Capture

At its core, value creation refers to the process of generating new economic or social benefit through innovation, efficiency, or improved access. In traditional business, this could mean launching a product that saves time, reduces costs, or enhances user experience. In crypto, value creation might be measured by:

On the other hand, value capture is the mechanism by which an entity retains a portion of the value it creates—typically as profit or equity returns. Consider a lemonade stand that spends $50 on supplies and earns $100 in sales. It created $100 in market value and captured $50 in profit.

As venture capitalist Peter Thiel famously noted, innovation without monetization is incomplete. You can invent the next big thing—but if you can’t capture any of its value, long-term sustainability becomes impossible.

👉 Discover how leading platforms are turning protocol value into tangible token returns.

Applying Value Creation & Capture to Crypto Protocols

Many blockchain projects excel at creating value. But too often, their tokens remain disconnected from that success. Let’s look at some prominent examples:

✅ Protocols That Create Value:

While these platforms drive adoption and generate economic activity, only some have built mechanisms for their tokens to capture that value.

Tokens That Successfully Capture Value

🔹 Smart Contract Platform Tokens: The $ETH Model

Ethereum’s native token, $ETH, stands out as one of the most effective examples of value capture in crypto. Here's how:

Moreover, Ethereum benefits from a powerful network effect: more developers build on it → more users adopt it → more demand for $ETH → higher security and value. This flywheel turns usage into economic value that directly benefits token holders.

🔹 Crypto Gaming Tokens: When Fun Meets Function

Well-designed crypto games can capture value when players are willing to pay for entertainment—not just speculation. If a game offers engaging gameplay and meaningful in-game economies, its token can gain intrinsic utility.

For instance:

However, many early crypto games failed because they prioritized Ponzi-like reward structures over actual gameplay. The lesson? Value capture only works if the underlying experience is valuable on its own.

Tokens That Fail to Capture Value

Despite generating massive user activity and revenue, several high-profile protocols do not pass economic benefits to their token holders.

❌ Uniswap: Governance Without Revenue Sharing

Uniswap generates millions in daily trading fees—but those fees go entirely to liquidity providers, not $UNI holders. The $UNI token currently offers:

But no direct financial return. This makes $UNI a governance-only token—one whose value depends largely on speculation about future changes rather than current cash flows.

While governance has merit—especially in decentralized decision-making—it represents a weak form of value capture compared to revenue sharing or fee redistribution.

Note: Uniswap is used here as an illustrative example due to its prominence—not as criticism. Many other DeFi protocols face similar challenges.

How Tokens Can Capture Value: Key Mechanisms

To design sustainable, high-value tokens, projects should consider integrating one or more of the following mechanisms:

1. Revenue Sharing

Token holders receive a share of protocol earnings—such as trading fees, subscription revenue, or minting proceeds.

Example: **Lido ($LDO)** – While stakers earn ETH yield directly, $LDO holders benefit indirectly through increased demand for node operators who must lock $LDO.

2. Governance Rights

Tokens grant voting power over protocol parameters, upgrades, or treasury allocations.

Example: Curve ($CRV) – Its governance is highly sought after because controlling veCRV positions influences which liquidity pools receive emissions—making it valuable to other protocols seeking exposure.

3. Token Utility

Tokens are required to access services, pay fees, or unlock features within the ecosystem.

Example: Braintrust ($BTRST) – Used to access discounted software tools, career coaching, and community events—creating real-world utility beyond speculation.

4. Scarcity & Supply Mechanics

Limited supply or deflationary policies (like burning) can increase scarcity as demand grows.

Example: Ethereum ($ETH) – With EIP-1559 burning base fees, periods of high network usage lead to net deflation—boosting long-term value accrual.

5. Intrinsic Value Through Access

Tokens unlock exclusive content, services, or experiences.

Example: BanklessDAO ($BANK) – Grants access to educational resources, events, and contributor roles within the decentralized autonomous organization.

👉 See how top-tier ecosystems are aligning token incentives with real economic output.

Frequently Asked Questions (FAQ)

Q: Can a token have value even if it doesn’t capture protocol revenue?
A: Yes—but that value is often speculative. Governance, brand loyalty, or future expectations may support price temporarily. However, long-term sustainability usually requires some form of economic return.

Q: Is governance alone enough for strong value capture?
A: Rarely. While governance allows influence over a protocol’s direction, it doesn’t guarantee financial upside unless voting power correlates with revenue rights (e.g., Curve’s ve-token model).

Q: What makes Ethereum’s value capture model so effective?
A: It combines multiple mechanisms: fee payment in $ETH, deflation via burning, staking requirements, and network effects—all reinforcing each other to create compounding demand.

Q: How can new projects ensure their tokens capture value from day one?
A: By designing clear utility loops—such as requiring tokens for core functions, redistributing fees to holders, or using buybacks/burns funded by revenue.

Q: Are all speculative tokens doomed to fail?
A: Not necessarily. Speculation drives early adoption and liquidity. But for lasting success, tokens must transition from speculation to productivity—offering real utility or returns.

The Future of Value-Capturing Tokens

As the crypto market matures, investors are becoming more discerning. They’re no longer satisfied with vague promises or governance theater—they want tokens that deliver tangible benefits.

The next wave of successful projects will be those that intentionally design their tokens to participate in the value they help create. Whether through fee sharing, utility-driven demand, or deflationary mechanics, the goal is clear: build tokens that are not just symbols of ownership—but engines of economic return.

Projects that ignore this shift risk becoming obsolete: widely used protocols with underperforming tokens.

👉 Explore how emerging token models are redefining digital ownership and investor returns.

Ultimately, the future belongs to tokens that move beyond speculation and become productive assets—where holding isn’t just a bet on hype, but a stake in real economic activity.