The Future of Utility Business Models Is Token-Based

Traditional infrastructure (cloud, telecom, energy) requires massive upfront capital and centralized ownership, creating monopolies and stifling innovation.\n- $1T+ global infrastructure investment annually\n- Years-long deployment cycles for new capacity\n- <10% asset utilization rates in many sectors

DePINs (e.g., Helium, Render, Filecoin) bootstrap global networks by rewarding contributors with tokens for providing real-world resources.\n- Aligns incentives between users, builders, and operators\n- Unlocks latent supply (idle GPUs, storage, bandwidth)\n- Enables hyper-scalable deployment from day one

Token appreciation creates a self-reinforcing cycle: higher token value funds more network growth, which drives more utility and demand.\n- Token rewards subsidize early adoption and usage\n- Network effects are captured by the protocol, not a corporation\n- Creates defensible moats via integrated economic and physical layers

Successful DePINs will vertically integrate, controlling the full stack from hardware to financial settlement, disintermediating legacy giants.\n- AWS/Cloudflare disrupted by compute/storage DePINs\n- Verizon/AT&T disrupted by decentralized wireless (e.g., Helium 5G)\n- Proprietary APIs replaced by open, token-gated marketplaces

Traditional fee models enrich passive token holders, not active users or builders. Value accrual is misaligned, creating extractive economies.

• Fee Switch revenue is a blunt instrument with no utility.
• Speculative demand is decoupled from actual protocol usage.
• Liquidity is mercenary, fleeing at the first sign of higher yields.

Transform idle capital (staked ETH) into productive, yield-generating security for new protocols like EigenDA and AltLayer.

• Capital Efficiency: Unlock $10B+ in staked ETH for pooled security.
• Bootstrapping: New AVSs (Actively Validated Services) avoid the validator cold-start problem.
• Flywheel: More services → More fees → More restakers → Stronger security.

Create a crypto-native, yield-bearing stablecoin (USDe) by delta-hedging staked ETH collateral. It's a business model built into the asset itself.

• Native Yield: Captures staked ETH yield + futures basis (~15-30% APY).
• Capital Efficiency: No overcollateralization required like MakerDAO.
• Composability: Serves as a high-yield base asset for DeFi protocols.

Maximal Extractable Value siphons billions from users to validators and searchers, creating a toxic, opaque layer in every transaction.

• User Loss: Front-running and sandwich attacks drain wallets.
• Centralization: MEV profits incentivize validator pooling (e.g., Flashbots).
• Inefficiency: Blockspace is optimized for extractors, not users.

Protocols like CowSwap and UniswapX use batch auctions and intent-based architecture to capture and redistribute MEV back to users.

• User Rebates: MEV becomes a refund, not a tax.
• Efficiency: Solvers compete for order flow, improving prices.
• Transparency: The dark forest becomes a public marketplace.

Decouple execution from consensus and data availability. Rollups like Arbitrum and Base pay TIA for secure, scalable data publishing.

• Scalability: Enables 10,000+ TPS for rollups at marginal cost.
• Business Model: Pay-per-byte for DA creates sustainable, usage-based revenue.
• Interoperability: A neutral data layer fosters a multi-chain ecosystem.

High fee revenue doesn't accrue to token holders if the token is just a governance wrapper. This misalignment kills long-term viability.

• Key Benefit 1: Direct value capture via fee switch mechanisms (e.g., Uniswap, MakerDAO).
• Key Benefit 2: Sustainable treasury growth from protocol cash flows, not perpetual inflation.

Embed the token as a core, non-bypassable component of the protocol's function. Think staking for security, collateral, or access.

• Key Benefit 1: Creates inelastic demand driven by utility, not speculation.
• Key Benefit 2: Enables novel business models like restaking (EigenLayer) and Liquid Staking Tokens (Lido, Rocket Pool).

Protocols relying on token emissions to bootstrap usage face a death spiral when incentives dry up. This is the "mercenary capital" trap.

• Key Benefit 1: Focus on product-market fit that survives zero emissions.
• Key Benefit 2: Use emissions strategically to bootstrap network effects, not as a permanent crutch.

Models like Curve's vote-escrowed tokens lock capital to govern emissions and fees, aligning long-term holders with protocol health.

• Key Benefit 1: Transforms tokens from tradable assets into productive capital.
• Key Benefit 2: Creates a flywheel where fee revenue boosts token utility, attracting more locked capital.

Web2-style loyalty programs ("points") create opaque, off-chain claims on future tokens, centralizing power and frustrating users.

• Key Benefit 1: Transparency: all allocation logic is on-chain and verifiable.
• Key Benefit 2: Fairness: eliminates insider advantages and hidden cliffs.

Use the token itself as the record of contribution. Retroactive Public Goods Funding (Optimism, Arbitrum) and contributor NFTs prove engagement on-chain.

• Key Benefit 1: Builds verifiable reputation systems for DAOs and builders.
• Key Benefit 2: Enables new primitive: provable contribution history for airdrops and grants.