A switch recently flipped in everybody’s head… “what is it that we are buying and holding?”. This is a question we all ask ourselves every year at one point or another. We did it with ICOs, we did it with NFTs, and we are doing it right now with different “types” of crypto-native tokens.

The switch was triggered by multiple events over the course of this year, but the most recent example was the Vector acquisition by Coinbase.

The team behind Vector (and also Tensor), is a team that the community on Solana trusted and championed (for good reason!). These guys are real builders, they disrupted a major player in the NFT market, and are generally incredibly sharp/impressive. Surely buying exposure to their token would pay off in some way, right?

Wrong! Coinbase acquires Vector, and responsibly notes in the announcement tweet, “Coinbase is only acquiring Vector. The Tensor Foundation will remain independent from Coinbase and will steward the Tensor NFT marketplace and native token, which will remain independent and unaffiliated with Coinbase.”.

In other words, Coinbase basically said we want the retail order-flow + Solana Dex trading tech, but nothing else. Good luck with “stewarding the token!”.

Tensor Foundation, now faced with an interesting situation where they should be happy + proud, but are now paranoid about the wrath of angry tokenholders storming their comments, start the damage control efforts promptly.

They claim that this is actually an incentive alignment benefit, and it comes with:

• 50% increase in marketplace fees going to the TNSR treasury.
• The teams unvested tokens, to the tune of 21.6% of the supply, gets burned immediately.
• And the founders are re-locking their vested tokens for 3 more years.

Sounds like a decent remedy on paper, but the core questions remain… what actually IS the $TNSR token? Why have people been holding it?!

Pictured above is the tweet they put out. Naturally, the response from token holders wasn’t necessarily positive, or friendly. (see below)

The hate-fueled reaction from CT is par for the course over ANY minor snafu, but in this situation most of the space actually shares the same sentiment. How do we gain exposure to these projects if not through the token? What is the token’s purpose? How do we even value assets or hold them if they can’t be clearly defined?

The anger from CT stems from a few reasons. One of them being the fact that interestingly, the TNSR token started unnaturally pumping on the 19th of November, two days before the announcement was released. This is what triggered some comments about insider trading.

But the real reason CT is so angry, is due to the fact that the equity holders are the only group able to celebrate the acquisition. The community, which helped them get to where they are today, is once again left with nothing but questions and a tide pod in their mouth.

Token holders feel a deep sense of disappointment over being left out. They feel cheated. They did all of the right things on paper…

They helped the team by providing their own hard earned capital as liquidity. They spotted a great opportunity and held what they thought was skin in the game (TNSR tokens). “Why shouldn’t we be rewarded for this risk?!”.

They are right. Buying exposure to the $TNSR token theoretically should payoff in some way after a Coinbase acquisition if the token actually had any inherent value. They were duped by not understanding the game.

The community reaction to this, and many similar situations, is to not forgive and/or forget, but to just stop participating.

The feeling of defeat that you get knowing that the risk you took + the time you wasted holding a token was not only meaningless, but actually adversarial toward you is one that is indefensible. Token holders have a right to be pissed off and demand change, because this has been a constant in the crypto ecosystem for as long as I have been apart of it. The difference back then was that people had legitimate fears about issuing securities by accident. Now it is simply that founders discovered a “new meta”. Raise money without giving up any piece of the pie. Comes with the added perk of not having to deal with the tedious process of VC rejections or appeasing investors.

Many of those tokenholders will forever hold a grudge against Vector, Tensor, and Coinbase because of this. This in my opinion is one of the main reasons why so many new users churn within crypto.

Classic scenario: Friends or family have a horrible experience with crypto after Timmy told them to buy Fartcoin at Thanksgiving dinner. Or they lose a bunch of money by buying an illiquid honeypot token, or clicking a malicious “free solana” button. They get drained and rightly feel cheated. They then tell everyone they know that it is a perma-scam made by drug dealers. These rumors spread like wildfire and are the main reason why crypto has such a horrible stigma.

It is even easier to get people to hate crypto if you explain to them that what they bought was supposed to be a “governance” token. I mean the concept of these things was acceptable at the time, but now we know that they are laughable. The problem with tokens as governance is simple, the “insiders” (team, investors, equity holders) typically hold most of the supply, and nobody actually votes except for them anyway. These are entirely useless.

$TNSR was and still is just a non-functional governance token the entire time. There was no financial incentive to hold it, much like many other tokens that are currently “tied” in some way to successful projects in the space. People only want to buy a token and support a team if they know they have a financial incentive to do so. This is why there is a “ghost-bid” on everything right now. There is no financial incentive to hold basically any of these things. (but there is hope as we will discuss!)

There are many examples of crypto M&A resulting in situations like this, where the “native token” is left for dead, and yet we still wonder why a lot of these coins never attract real capital. If we want to be taken seriously, we need to restructure many of the tokens that are currently available on the market. They need to represent real ownership, ideally through equity and dividends.

A very similar situation happened when PumpFun acquired a trading terminal called “Padre” in October. In their version, they were more blunt about the announcement. They tweet, “the $PADRE token will no longer have utility on the platform, with no further plans for the future.”. Imagine being a long-time supporter of Padre just to see that tweet come out. It also must be disheartening to be on the Padre team and see an “asset” that you brought into the world, negatively impact all of your original supporters. Standards need to be raised all around.

PumpFun has also taken down the Padre team’s Medium articles and documentation regarding the original token details. Apparently it actually had some useful utility, all for it to be destroyed in one day. Here is a screenshot of the price chart. Notice what happens to price in October.

The sad part is, another example of this just happened as I have been putting this article together. Yesterday, December 15th, Circle acquired Interop Labs, the team that developed Axelar, and once again left token holders with nothing but dismay. This is impacting the growth of the industry and leaving new-entrants who aren’t used to this stuff disgusted. I like to say, “if you don’t understand the game you are playing, you shouldn’t play the game”, but I don’t think anyone actually understands the game we are currently playing by holding these tokens. If that were the case, Solana and Ethereum would have closer valuations, and memecoins wouldn’t go to $1B marketcaps.

Nobody is going to want to invest in “crypto-native” assets if “token vaporization” is a possible outcome. The challenging part is that we need “crypto-native” assets if we want to continue growing, or else people will just keep trading where they already do, with assets they already know and trust.

New assets that were generated from this space like ICOs, NFTs, and memecoins unironically bring a ton of new users into the ecosystem. If we want to keep it that way, we need to also have assets that aren’t solely speculative to remind people that we are building a serious one-stop-trading-shop. Not just a virtual casino.

From what I observe, a lot of the current “crypto-native” tokens on the market are basically un-investable for rational people. The current standards around tokenholder rights is wildly insufficient. That is why we are currently seeing a lot of dissonance regarding token “types” in the space. I tend to think that there are basically 6 “types” of tokens that exist right now in the crypto space. And this has evolved over the past 5 years since ICO’s were all the rage.

1. “Memecoins” — tokens with no value whatsoever. Just for speculation and entertainment. You know what you sign up for when buying these.
2. “Governance” Tokens — many of the tokens that exist today grant “governance” rights to holders. This is cope in tokenized form, a failing model. Essentially on the same tier as a memecoin atp.
3. “Utility” Tokens — fee rebates or tier thresholds that grant certain access to the product’s functionalities. Almost like a paywall that you bypass through holding certain amounts of tokens. These don’t really work either, but are much better than the previous two. The token actually has a real economic purpose.
4. “Value accrual” Tokens —a percentage of revenue that is generated from the project’s underlying product goes toward token buybacks. These have the correct properties, but arguments posed about startup capital allocation are still important to consider. Many agree that there are “good” token buybacks and “bad” ones.
5. “Ownership” Tokens — currently being pioneered by MetaDAO, these take on an entirely different approach that is becoming more widely accepted across the ecosystem. Basically, token holders vote by expressing intent through skin in the game, forcing all parties to make the “right” decision. If they don’t they will have a financial consequence on either side of the outcome.
6. “Network” Tokens — things like Solana, or Ethereum. With these you know what you are getting, and the utility in them is clear. You need the token to interact with the network (paying to transact). A story for another day will be how value will accrue to these, as that is a hot-topic right now as well.

The optimal path forward is not totally clear to some yet, but hopefully we can all agree on a standard soon.

In my opinion, we should copy the model that already works in other markets. Equity and dividend distributions directly to token holders.

There needs to be common ground on this: Either issue tokens that represent equity, or distribute equity without a token. No more hybrid models trying to incorporate both. That is how these perverse incentives start to form.

One thing is certain, “crypto-native” assets still have a LONG way to go.

It appears that participants from every ecosystem are starting to agree on one thing, we need to address this ASAP.

Right now, teams seem to have a “get out of jail free” card that they can pull out when being asked about their token. Most of the teams launching tokens today are sure to include a peculiar disclaimer, that usually reads something along the lines of “this token should not be considered an investment” or “more details to come in the future”.

This has become a cop-out way of saying “our token doesn’t technically give you anything yet because we don’t know what we can or cannot do with it due to regulatory concerns”. This in my opinion is one of the biggest roadblocks that we must collectively fight to overcome within the ecosystem. You can’t just point at uncertainty and use it as the reason to create more uncertainty in the world.

Ideally, these teams would just avoid launching a token if they do not know what they can or can’t do legally. But crypto doesn’t operate like that.

Most of the tokens that have launched to date have provided vague descriptions on what it is that they are actually granting holders. This is mainly due to the Howey Test, which prevents tokens from distributing things akin to dividends, or equity in the business. This would classify the token as a security, which is not kosher in the US and other major countries where teams are building. This is what allows teams to have this quasi “get out of jail free card”, and it enables them to raise a ton of money through the token launch, with no definitive responsibility to do right by the investor.

This is preventing new entrants from experimenting with these tokens. Why would you ever invest in something that you can’t clearly understand, or even confidently say what it is that you own?

For DeFi to realize its true potential, a few things need to happen.

First and foremost, we need to really increase the quality of the assets we have available to lend, borrow, or provide liquidity for. This starts by clearly being able to define every token in the space. If that means restructuring or even relaunching a token, so be it. We need to address this head on or people will lose all faith in “crypto-native” assets. If we are still unable to do right by investors because of a lack of “regulatory clarity”, then we simply just need to increase our effort in the areas where we do have clarity, and start tokenizing more traditional stocks and commodities so that people have assets they can trust available to trade on these networks.

Secondly, we need to raise the standards of token launches + launchpads. This won’t be easy because a launchpad’s natural financial incentive is to try to launch as many things as possible, which is deeply problematic for a number of reasons. But thankfully, companies like MetaDAO are approaching this with tact.

No longer can we provide teams the luxury of releasing a vague and uninspired roadmap that points to the future and says “we will figure it out later”. These two things alone will greatly increase the willingness for investors to actually consider holding these assets, and importantly, it will enable people like me, who genuinely want to onboard new people into the space, to confidently be able to describe exactly why it is lucrative to participate within this ecosystem. This is how we actually bring everything and everyone on-chain.

The thing that many crypto-native builders do not recognize is that the rest of the world who isn’t spending their time chronically online investing in internet “currencies” are typically very risk-averse. They want slow, steady, consistent, low risk investments that they know will grow overtime. They don’t want to check their portfolio one day and see that the token they bought for a project they believed in last year got acquired, but the token was left for dead. This isn’t a risk that people investing in the equities market have to price-in, and it shouldn’t be a risk in our markets either if we want them to be taken seriously.

Furthermore, I believe this is the core reason why holding times for crypto assets is typically so much shorter than holding times for other assets.

Token holders are basically playing a zero-sum version of hot-potato with their portfolio. Things can change so quickly in the space that you have constant paranoia holding most of these tokens. Individuals are now being rugged through the thing that used to signal an absolute grand-slam success! (an acquisition)

So the takeaway here is that we need to clearly define onchain assets while continuing to bring traditional assets onchain that have already established demand in other markets. Tokenized equities will probably be the most coveted onchain assets within the next 2 years. I have already written about commodities and why I think they will have a massive impact as well, but now I am starting to think that both will be equally transformative. (can check that article out here)

Crypto-native assets will also have a great rise in demand as soon as we start labeling them appropriately and ensuring that investors have basic rights. On a positive note, at least you can say you got to witness the period of time in crypto where we all knowingly bought and held vaporware disguised as governance. We are still quite early.

According to data from Defi Development Corp and RWA.xyz, tokenized stock trading volume on Solana surpassed $1.1B so far this year. This data was released on October 16th.

Notably, they pointed out that tokenized stock volume on Solana essentially doubled MoM from August to October, signaling real demand for these assets during a short span of time.

There is no doubt that tokenized stocks will be an interesting vertical within the crypto markets, and hopefully tokenized equity will become the standard for crypto-native assets.

Importantly, regulatory clarity should be coming very soon for everything. On December 12, 2025, big news dropped. “DTC received a No‑Action Letter from the SEC to tokenize certain DTC‑custodied assets. By leveraging blockchain, DTCC aims to bridge TradFi and DeFi, advancing a more resilient, inclusive and efficient global financial system.”.

This is a major step forward, allowing for assets like the Russel 1000 to be tokenized on blockchains. Bingo! Better assets are on the way!

This is an on-going fight, and there are so many questions that need to be answered from a regulatory perspective which is certainly prolonging the timeline. Until we figure out the optimal way to structure tokens on-chain, DeFi will not reach anywhere close to its full potential. It is imperative that people are able to lend/borrow/trade assets that they can actually trust.

Pragmatic investors do not want to buy tokens that cannot answer even the most simple of questions, which unfortunately still are as basic as “what are we getting when we buy your token?”. So in the meantime, while we figure out the answers to those questions, the stage is set to bring in assets that already have those questions answered. This is how we bring serious capital from serious investors onchain.

Thanks for reading.

This article outlines how consumer products will evolve on the decentralized internet and why “online economies” may represent the final form of consumerism.

The Five Forms of Value in Consumer Products:

Consumer applications have evolved significantly over time, yet one fundamental question remains. What value do they really provide users? Every relevant web2 consumer application or product thrives because it delivers at least one of five forms of value:

1. Entertainment Value: They make users feel happy, heard, and engaged.
2. Financial Value: They help users earn, save, or grow their money.
3. Knowledge Value: They teach or inform users in a significant way.
4. Time Value: They save users time and make tasks easier.
5. Social Value: They give users the feeling of recognition and a sense of belonging.

The most successful consumer products offer their users a combination of the value sources outlined above. The same principles of value creation apply to crypto and web3 applications, but there is one major difference. Users who experiment on consumer crypto applications, expect financial value to be the highest priority and biggest value proposition.

Speculation Attracts Consumers to Crypto:

The crypto industry has introduced a new standard of consumer value. Memecoins, NFTs, and other speculative digital assets may appear ridiculous on the surface, but they have exposed a deep human desire.

The desire is to participate in systems where ownership, status, and digital identity are conveniently bundled. The most coveted consumer experiences crypto has pioneered up to this point (memecoins and NFTs) delivered exactly that, and the result is a potent combination of the value forms I originally outlined above.

They provided users/holders with a trifecta of entertainment value via digital identity, financial value via ownership, and social value via status, which has proven to be the winning recipe in the crypto space. We can see evidence of this with a lot of the most popular applications on Solana today, like Axiom and PumpFun. We also saw it in 2022 with Magic Eden and Tensor.

Most of the successful web2 (non-crypto) consumer applications that have existed up to this point, have mainly found success providing purely entertainment value, or social value, or a combination of both. We haven’t really seen the crypto consumer trifecta in the web2 world yet, with the exception being sports betting platforms and prediction markets, which are early examples of online economies.

Now that we have established what the “blueprint” for successful consumer applications in both web2 and web3 currently looks like, let’s explore why future consumer applications will evolve into “online economies” that expand upon this foundation.

Digital Assets Already have Product Market Fit:

Digital assets, tokens, collectibles, and whatever else they are labeled as have already found product market fit (PMF), and the future for them is incredibly bright. So bright in fact, that I believe they will help create new versions of online economies.

Marc Andreessen defines PMF as “being in a good market with a product that can satisfy that market”.

Harvard Business School defines PMF as a phenomenon that occurs when the “value hypothesis is validated”. Meaning that the product solves a real problem, customers adopt it and are willing to pay, and the business can capture enough value to be sustainable.

Digital assets by these definitions have found PMF, yet they continue to face ridicule from both crypto-natives and “normies” alike. The reason why they get so much scrutiny is because, similarly to other fads that come and go in crypto, they had an enormous and eye-opening phase of growth, followed by a long period of stagnation and decline in both value and demand. Because of this, people assume it was simply a passing fad.

Just because the proverbial “bubble” has popped on NFTs, does not mean that it is over for them, or digital collectibles more broadly. They proved their ability to attract ridiculously large amounts of capital and solve problems. Remember, Bitcoin, Ethereum, and Solana all have had their “bubble” popped multiple times and still recovered to new highs.

In my opinion, 2017–2022 was just a trial period for digital collectibles and their true potential will be realized in the coming years. Let me explain why:

Physical vs Digital Collectibles and Why They Both Have Value:

I have always argued that the value proposition for NFTs is that digital collectibles have already proven to be an in-demand market for people of all ages, which is evident by the success of video games like Fortnite, Clash of Clans, NBA 2K, and many others. These games allow players to purchase a virtual currency with fiat, and spend the virtual currency within the game environment on various digital collectibles/assets/upgrades.

If you asked any “normie” on the planet if they know someone who has purchased a Fortnite skin, or NBA 2k VC, they would most likely say yes. If you ask the same person if they know anyone who has purchased a digital collectible, they would most likely say no. This is because they do not consider a Fortnite skin as a collectible yet, they just consider it a purchase.

There is never really any pushback from the mainstream if you were to say that physical collectibles are highly coveted assets with legitimate markets. That is because a lot of “normies” actually own physical collectibles themselves and have attached an imaginary value to these items based on how much they personally covet them. The most obvious physical collectibles people immediately think about when they hear the term are normally things like Pokemon cards, Baseball cards, sports memorabilia, watches, physical coins, vintage clothing, Hermes “Birkin” bags, Air Jordan Shoes, and even Labubu’s…

Physical collectible markets rise and crash just like speculative digital asset markets, yet collectors shrug those crashes off because the value is personal. When these same people hear the term “digital collectible”, they typically will scoff because they believe anything digital is intangible and therefore is valueless.

They don’t acknowledge that similarly to how they place an “imaginary” value on something like a signed Tom Brady helmet, that might be the same way somebody else values an in-game video game asset that took a lot of hours to acquire, or silly NFT PFP that makes them happy. They simply don’t recognize that “value” for these items is inherently relative.

Some people care deeply about signed Tom Brady memorabilia, while some people don’t even know who Tom Brady is. Obviously those two people in this scenario will attach wildly different values on a signed helmet. The same rule applies to NFT collections, and web2 digital collectibles.

Web2 Games Already Prove the Online Economy Model:

Web2 digital collectibles are already highly coveted by a wide demographic. Think about Fortnite and CSGO skins. Think about Fifa, Madden, or NBA 2K VC or “virtual currency”. Again, these are digital currencies that are purchased with fiat currencies, and then used within digital environments to acquire digital items.

In Fortnite, you can buy “V-Bucks” with USD and are able to spend them on new character customizations called skins. In 2023, Fortnite generated $3.5 billion in revenue. This is a completely free game to download and play… We can assume much of that $3.5B in revenue comes from V-Buck and skin sales. Both V-Bucks + Skins are web2 digital collectibles and they are highly in demand. V-Bucks + Skins actually have real utility in these digital worlds, which is why they are heavily in demand.

In Madden, Fifa, and NBA 2k, the same concept applies. You can purchase digital VC with fiat that allows you to upgrade your teams rating with coveted players. You can buy gatcha-style packs of players for your teams. You can use VC to upgrade your own “myplayer” with better skill moves and animations that make your player better. You can even buy character customizations via digital clothing with your VC just like in Fortnite. They also have a marketplace built out for buying players for your teams with VC.

Another great example of the demand for digital collectibles with a baked in utility is buying gems in Clash of Clans, which allow you to speed up upgrades on your base or army.

Now you have a digital plot of land that you are trying to “max out” so that you have the ability to withstand attacks from other opponents. Again, this further proves that if people can spend fiat to increase their chances of being superior to their opponents in a digital landscape that they care about, they will do that because of how much they enjoy the game. That is the “utility” I am referring to with these virtual currencies and collectibles — you can use them in the game.

Video games are some of the most successful consumer appreciated products of all time, and one of the reasons for that is because of the entertainment and social value you get from the competition built within them. People want to be the best and have fun playing these games. When they can buy items that help them be the best, or stand out from others, they will take those opportunities if they personally value the virtual world enough.

The key point is that web2 collectibles already demonstrate PMF through their in-game utility, which is the foundational element for creating true online economies. If you already have demand for the virtual world created by the game, the digital collectibles you use within the virtual world, and a virtual currency that powers the interactivity of the virtual world, then you already have the tools necessary to create a full-fledged online economy. Fortnite already offers entertainment + social value to their users, and if they implement financial value the way consumer crypto products do, then they will effectively create a micro-economy for their virtual world.

Evolving From Games to Online Economies:

If any of the game creators that I have mentioned thus far put a limit on the number of skins they produce, or actual “VC” tokens they create, they would instantly create much more demand for these digital products. By implementing supply caps on these assets, they would unlock the ability to create extremely competitive markets that present a lot of interesting opportunities.

Secondary Marketplaces: This would enable P2P trading of verified in-game items. The fact that these do not already exist is highly surprising to me.

Guaranteed Authenticity: This is currently a massive challenge in physical collectible markets, because counterfeiting is becoming harder to spot everyday for some of the most sought-after items. Legitimate secondary marketplaces are a net-positive in these scenarios because authenticity for collectors becomes trustfully verifiable if the game or brand itself implements the marketplace. This also eliminates a lot of the opportunities that scammers currently have over people who are trying to purchase digital collectibles from non-trustworthy third parties. It eliminates the risk their consumer encounters daily.

Raffles and Auctions for coveted in-game items: This would democratize the access to them, thus making them even more coveted and rare. If you price-out a certain group with an expensive one-size-fits all price, you are limiting the assets potential for price discovery. If you allow the market to simply decide the value through an auction, then you have an efficient market with more accurate and agreeable pricing.

Botting Resistance: Botting is also a massive problem in the physical collectibles market. Opportunists who find a trending physical collectible with a lot of demand will normally do everything in their power to clear out the inventory available for these items because they know they can corner the market and drive up the price. You see this most commonly with sneaker drops, or Pokemon card releases. Bots are dominating these markets and inflating the prices up dramatically, making casual participants feel frustrated, disappointed, and hopeless. If these digital assets are being issued by the brand, they theoretically should be able to identify + track problematic participants and control the situation more effectively than with in-store purchases or website releases that are harder to pinpoint. Eliminating that frustration and sense of hopelessness that comes with people controlling the market, naturally increases consumer appetite to participate.

Royalty Implementation: Across the trading of all of these products a royalty could be issued. The result is a massive boost to their bottom line, and multiple new revenue streams. This is important because the company wouldn’t have to rely as much on game sales as they would in-game asset sales, which theoretically should give them more users. More users gives them more advertising leverage, and this gives them more optionality to profit in unexplored pathways. All of this equates to more money for the creators of the game, and more enjoyment for the people playing it.

In the near future, these online economies will exist for every popular video game. I also believe that streaming and gaming will become even more lucrative as a career path as a result of this. I also deeply believe that their communities would grow even stronger, and pay more attention to the ecosystem. These markets already attract a lot of attention through their entertainment and social value, but the missing catalyst necessary to transform these games into online economies is to allow people to have real skin in the game. They need to implement the financial value that as of now only really exists in consumer crypto applications, and sports betting sites.

As in any sport, prize money attracts the best competitors, which in turn drives viewership. There are millions of people in the world right now, that would drop everything they are doing to be a competitive gamer who has the potential to earn $1,000,000 per year or more. The only thing preventing this from happening, is that it currently isn’t very interesting to watch e-sports because the prize money isn’t very enticing for the best talent to drop everything and want to compete. I expect this to change in the very near future as these gaming companies start to realize the potential of converting their digital collectible markets into online economies.

Overall, online economies are similar to internet capital markets in concept, and both in my opinion will live on Solana within the next 5 years. The real difference, is that online economies encapsulate more than just trading. It provides users with digital utility in the form of assets like v-bucks and digital collectibles like skins, weapons, cars, and abilities. These do not and cannot exist within most of the web3 games as of now, because they do not have dedicated fanbases who love the virtual world and game they have created. The key to unlock this in my mind is for an established gaming franchise to introduce it.

Potential Downsides and Ethical Considerations:

There are some obvious downsides for a game like Fortnite to implement a secondary marketplace, because their audience is generally a lot younger and do not have a steady stream of income, among other things.

For games like Call of Duty, or CSGO, Fifa, Madden, NBA 2K and GTA who have die-hard fanbases of 20–45 year olds it makes perfect sense. The key here is that the game should keep a freemium model. You do not have to pay to play the game and you still have opportunity to get the same items, it will just be more difficult to do so if you are not buying in.

I strongly believe that a freemium model is the best approach because a consumer isn’t necessarily excited to pay $70 for a new video game they have not played yet. But if they get to test it out, and pay $8 for a cool skin or in-game perk, that appears to be much more worthy of the payment IF they like the game. They likely would rather make multiple $8–$20 purchases over a long-time period if they enjoy the game, rather than the initial $70 blind purchase.

Another potential downside is that certain participants may value speculation over the actual enjoyment of the game, which wouldn’t be great for the longevity of the game. The beauty of gaming right now, is that people spend their time playing them because they actually get something out of the experience, which is again a combination of entertainment value, and social value. If you add a financial value to the mix, it might negatively impact the fun experience that users currently receive.

Furthermore, like every market, people will try to exploit it for personal gain. This can create an adversarial environment within communities that are supposed to promote inclusion. This potentially could harm certain community members who may be participating for purely financial reasons.

Lastly, it would be somewhat difficult to understand the supply caps of certain assets with their associated rarity, but they could derive a lot of inspiration from the work NFT collections have already done around this. In most popular NFT collections, there are common traits/items, uncommon traits/items, rare traits/items, and extremely rare traits/items.

The only difference in these items outside of their appearance and potential use-cases, are the fact that there is a smaller supply, making them much harder to acquire. This technically is already baked into games like Fortnite and CSGO that only release skins during certain periods of time. As long as those assets aren’t re-released, the value of them will likely continue rising because there simply isn’t an easy way to acquire these items and the demand is very real.

Conclusion:

The TLDR is that online economies can exist right now under certain conditions, and if an already successful major franchise does not implement primitives that resemble what I have outlined above soon, a new major franchise is about to be born.

There is demand for speculation via financial value, and digital collectibles have proven to be a respected vehicle to speculate on both in web2 and web3. I also do strongly believe that there is a large portion of the population who would start playing these games more frequently if there was a financial incentive to do so. If you can accomplish the crypto consumer application trifecta, marrying entertainment value, financial value, and social value, you have the potential to create the most enticing consumer application of all time.

Thank you for reading, and I would love to hear your thoughts below.

The leading teams on Solana have laid out an ambitious roadmap to address the current limitations and areas of improvement. This article attempts to display the most important parts of the current roadmap and is intended to shed light on the technical ways in which Solana will fundamentally improve over time, in a way that is digestible to non-technical readers.

The ICM roadmap relies on three equally important pillars:

- Scaling throughput and reducing latency for real-time performance.

- Ensuring fairness by minimizing MEV and protecting transaction ordering.

- Enabling flexible market microstructure so applications can cater to their specific needs.

Each roadmap item we discuss in this article strengthens one or more of these pillars. Together, they not only form the foundation for ICM, but also deliver broader benefits for Solana’s ecosystem.

In the near term, incremental upgrades improve Solana’s performance and reliability, but in the long term, three major advancements will position Solana to become the natural home for global capital markets.

The items we will discuss are as follows. Bolded items are major advancements.

Conditional Liquidity
P-Tokens + Prop-AMMs + Compute Unit Optimization
Block Assembly Marketplace
Multiple Concurrent Leaders
Alpenglow
Asynchronous Program Execution
Application Controlled Execution

Before we get too granular, let’s briefly talk about where Solana stands right now.

It is an amazing time to be an advocate, developer, or user on Solana. The developer ecosystem on Solana is thriving. Solana’s application layer is prospering. Platforms like PumpFun and Axiom are generating millions of dollars per day in revenue, and they are both less than a year old. To get a sense for how vibrant on-chain life is, it’s worth nothing that the top 10 Solana apps generated $193.5M in revenue in August alone according to SolanaFloor.

Life on Solana is already whimsical, but it is about to get a whole lot better…

Essential Background Context:

Solana originally set out to build a blockchain “so fast and so cheap that you can put a working central limit order book on top of it” (Anza, 2025a, para. 1), but 5 years later, the goal is still in progress.

Central limit order books (CLOBs) are market structures that legacy players like the New York Stock Exchange and NASDAQ have used to facilitate trading for decades. NYSE and NASDAQ remain the largest trading venues in the U.S. equity capital markets at the time of writing.

Solana aims to compete with them and position itself as the destination for “Internet Capital Markets”. According to flipthe(dot)market, the network is already making significant progress.

However, blockchains today are not purposefully designed for trading specifically, so to achieve that original mission, Solana needs to rethink a few major design decisions.

The core task that Solana needs to accomplish in order to compete with legacy players like the New York Stock Exchange + NASDAQ, is to enable exchanges on Solana to provide better prices than centralized entities.

With that in mind, let’s explore how Solana can accomplish this task.

Why Market Microstructures Matter:

In markets, the price of an asset is determined by the bid-ask spread. The spread is the difference between the highest price someone is willing to buy the asset for, and the lowest price somebody is willing to sell the asset for.

The tighter the spread, the better the price a trader will get, and therefore the more attractive the market will be to trade on. The spread matters for two essential parties, market makers (MMs) and takers (traders).

The job of a market maker is to provide liquidity. Takers consume liquidity that makers provide. The best market makers have excellent inventory management when it comes to the assets they trade, and this provides them an opportunity to profit off of the spread, among other things.

But there are instances where they can potentially lose a lot of money when large fluctuations in price occur. This allows sharp takers to catch them off-guard and exploit stale quotes. This is one of the risks of being a market maker, and it is called adverse selection. To understand this better, think about it like this:

“Market makers have this idea of a fair price (fair) that changes stochastically over time. When the fair is inside the bid ask spread, market makers’ quotes are safe because takers cannot make a profit by crossing the spread to pick them off. As soon as the fair moves outside of the bid ask spread, a race begins. The market maker tries to cancel their order as fast as possible and takers try to snipe the stale order before the market maker can cancel it. A successful taker earns the difference between the fair price and the stale quote in expectation. A large part of reducing friction from adverse selection is ensuring that the market maker wins this race as often as possible.” (Anza, 2025b, para. 5)

This context is important because:

“Data from centralized exchanges shows that market makers successfully cancel stale quotes and win this race only 13% of the time after a sudden price jump” (Anza, 2025b, para. 6). MMs win this race even less frequently on Solana, so improvements must be made to make on-chain markets more competitive, and tighten spreads.

The reason why MMs win the race even less on-chain, is due to Solana’s single-leader design, where one block producer controls transaction ordering during its slot. With this design, some takers effectively get a head start, putting MMs at a disadvantage.

The Jito auction, Solana’s auction for blockspace, further amplifies this issue. Even if a market maker has a faster order, someone else can potentially outbid them for blockspace, which allows the taker to capture value at the maker’s expense.

According to Anza (2025b), “The Jito auction, which is a symptom of having a single proposer who controls access to the state for an extended period makes it nearly impossible for market makers to win the race to cancel their quotes. Even if the market maker is faster, what really matters for who wins the cancel race is who pays the highest bid in the Jito auction.” (para.7)

So this leaves MMs in a lose-lose situation, they can either pay a lot of money to cancel their quote, or they can let somebody else pay a lot of money to pick off their quote. In either scenario, they are the loser in this example.

Addressing these intricate microstructure challenges is critical for building vibrant markets on-chain. We need to improve both MM and taker experiences to achieve better prices. As a result, Solana will become a more attractive venue for real-time, capital-intensive trading.

With that as background context, you should extrapolate a few key points.

• The single-leader design is sub-optimal for high-intensity trading, as it creates competition for blockspace between MMs and takers.
• MEV opportunities arise directly from these blockspace battles.
• Good microstructure = MMs and takers are happy = tighter spreads and more liquidity.
• The goal is to improve execution fairness, reduce MEV, and optimize blockspace usage.

Now let’s dive into how Solana is optimizing for what we have discussed so far.

Recent Implementations:

Conditional liquidity (CL):

Conditional liquidity is liquidity that is only available to takers, if the taker order meets a predefined condition. The condition that matters in this case is non-toxic vs toxic flow.

What is “Toxic-Flow”? This is trading flow from those “sharp” takers we just mentioned. It is called “toxic” because the maker will find themselves to be out-of-the-money nearly immediately after the order is filled. This occurs most frequently when a taker has an information or latency advantage, and punishes the maker as a result.

What conditional liquidity is actually doing, is ensuring that a given unit of liquidity can only be taken if the taker order is endorsed by a known front-end application. Places like Jupiter, Kamino, Phantom, Backpack, and many other good-faith entities. Think of it almost like a bouncer letting people into a bar. As a bar owner, you don’t want patrons who enter your bar to create problems for other patrons who are making the atmosphere enjoyable.

Conditional liquidity helps create tighter spreads, because market makers won’t have to worry about their trades getting picked off as frequently by toxic takers. CL basically lets liquidity providers avoid giving their best quotes to flows that are more likely to be toxic, and that is a good thing for everyone else.

Dflow is the pioneer of this mechanism and they recently published an open-source “conditional liquidity crate” that DEXs can integrate. CL is one of the many upgrades helping to make ICM a reality.

Next we will talk about how transaction processing will improve.

P-Tokens + Prop-AMMs + Compute Unit Optimization:

Transactions that are performed on Solana don’t just happen, they require a validator to execute the instructions, consuming compute units (CUs) in the process. This matters because each block has a finite compute budget. For example, a single instruction can consume up to 200k CUs, while an entire transaction is capped at 1.4M CUs.

We have recently witnessed the benefits of CU optimization through the rise of prop-AMMs. Platforms like Humidifi are able to capture large trading volume via lightweight oracle updates using as little as 143 CUs, enabling far more efficient price discovery. For comparison, this is orders of magnitude cheaper than the thousands of CUs consumed by a typical swap routed on Jupiter, whom is increasingly directing flow through prop-AMMs today.

Further optimizations to compute bring us to the introduction of the Pinocchio Token (p-token), which reduce CU consumption for typical SPL token transactions by roughly 95%. Since token transfers are common operations on Solana, this efficiency gain frees up significant blockspace to process additional transactions, directly improving network throughput.

Additionally, Solana is working to expand blockspace to 100M CUs per block, a target that can be reached through several upcoming improvements we will now explore.

Block Assembly Marketplace (BAM):

Jito’s Block Assembly Marketplace is a high-performance transaction processing system that gives Solana validators, traders, and applications powerful new ways to enhance performance and generate value.

“BAM transforms Solana blockspace into an open sandbox where developers can build modular programs that add functionality to transaction processing.” (Anza, 2025b, para. 15)

BAM is similar in nature to one of the major advancements we will talk about at the end of the article, but not quite the same.

The way BAM works is by “introducing an encrypted mempool running inside Trusted Execution Environments (TEEs), where all transactions remain confidential until execution.”, giving developers more control over transaction ordering which unlocks a host of new capabilities.

“This architecture aims to significantly reduce, if not eliminate, many of the most extractive forms of MEV, providing users with stronger execution guarantees and better pricing.” (Helius, 2025, para. 2)

BAM’s capabilities are impressive, and directly address the pillars outlined at the beginning of the article. It can enable apps to implement customizable sequencing rules, allowing Central Limit Order Books (CLOBs) that rival traditional exchanges to exist.

“CLOB plugins can run inside BAM and rely on a mixture of off-chain and on-chain logic, allowing full transparency and deterministic execution.”

But there are more benefits than new financial primitives…

“Validators earn more through better block construction. Users get faster, cheaper, and more reliable execution. Professional traders gain unprecedented trust in Solana’s infrastructure because BAM’s open source and verifiable nature will guarantee fairness with no hidden games or backdoor deals.” (Anza, 2025b, para. 10)

Better block construction from customizability of the blockspace should result in a decrease in computational resources that validators have to use for transaction execution, revealing yet another improvement in efficiency and throughput.

The items we have discussed so far are already live and pushing Solana closer to enabling ICM, but there are still many more important unlocks that we must acknowledge that are forthcoming.

Alpenglow:

Alpenglow introduces a new consensus protocol, which is the biggest protocol change that Solana has ever had.

Alpenglow ditches legacy components of the core protocol, specifically TowerBFT and occasionally Proof-of-history. Instead it introduces Votor, which according to Anza (2025a, para. 2), “takes over the voting and block finalization logic. Moreover, rather than relying on gossip, Alpenglow adopts a faster direct communication primitive.”

These changes will catapult Solana to an unprecedented performance level. The team at Anza can explain why more eloquently than I can.

“With TowerBFT, Solana had about 12.8 sec from block creation until block finality. To bring latency down into the sub-second domain, Solana introduced the “optimistic confirmation” concept. Alpenglow will shatter both these latency bounds” (Anza, 2025a, para. 4)

“We expect that Alpenglow can achieve actual finality in about 150 ms (median). Sometimes finality can be achieved as fast as 100 ms, which is an unbelievably low number for a world-wide L1 blockchain protocol.” (Anza, 2025a, para. 5)

To clarify, finality can depend on factors like a validators geographic location, but nevertheless, this is an enormous and borderline obnoxious efficiency upgrade.

“A median latency of 150 ms does not just mean that Solana is fast — it means Solana can compete with Web2 infrastructure in terms of responsiveness, potentially making blockchain technology viable for entirely new categories of applications that demand real-time performance.” (Anza, 2025a, para. 6)

If you are a Solana user, you already know it is fast, but Alpenglow is about to redefine the very meaning of the word. Real-time performance is right around the corner.

Anza is targeting early 2026 for Alpenglow activation on mainnet. This is the most important advancement we have discussed so far, but we still have the most exciting upgrades ahead.

Asynchronous Program Execution (APE):

Asynchronous Program Execution (APE) removes execution replay from the critical path of transaction landing, reducing latency even further. In practice, this means that transactions can settle faster without the need for every validator to re-execute them before confirmation.

This has been a goal Solana has been working to accomplish for multiple years. With the improvements Alpenglow provides to consensus, it removes a lot of the complexities that were initially required to implement APE. So because of the reduction of latency Alpenglow provides, APE can exist, and reduce latency even further.

APE presents a lot of advantages:
1. Faster block times
2. Lower validator requirements
3. Faster Finality
4. Reduced window for reordering transactions (combating MEV further)
5. Provides a pathway to multiple concurrent leaders (we will visit this very shortly)

Anza expects it to be activated on mainnet shortly after Alpenglow rolls out in early to mid 2026. Now let’s discuss one of the most exciting roadmap items.

Multiple Concurrent Leaders (MCL):

Remember how we briefly talked about the single-leader system that was creating problems for MMs? Well Solana devs are cooking up a new mechanism that will change the fabric of the blockchain.

Maximum extractable value (MEV) on Solana exists from chain operators squeezing out small units of value from users. MEV on Solana typically occurs because block producers, called “leaders” have a monopoly for transaction inclusion when it is their turn to produce a block. This allows for “searchers” (entities looking for MEV opportunities) to take advantage of certain situations that can occur when a leader is producing a block.

The solution to this problem, is to change the single-leader mechanism that currently exists, to instead have multiple leaders producing blocks simultaneously. This levels the playing field and takes away that monopoly that currently exists with having a single-leader producing a block.

In Anatoly Yakovenko’s words, “The approach that Solana is taking (to minimize MEV) is to maximize the competition between leaders (aka block producers) that have a monopoly for transaction inclusion. This means minimizing slot times, minimizing the number of consecutive slots a single leader is scheduled for, and maximizing the number of concurrent leaders scheduled per slot.”.

This gives users some optionality…

“The more leaders per second, the lower the costs for good leaders to offer blockspace, the easier it is for users to exclusively transact with good leaders and exclude transactions from bad leaders.” (Yakovenko, 2024, X.com, March 2024, para. 2)

MCL will help maximize information propagation in financial markets, which is currently constrained in the world of Centralized Finance. In CeFi, geographic location presents a significant advantage to market makers, which can end up hurting takers who may have earned an edge originally. You can think of this in the opposite way for blockchains regarding how single-leaders disadvantage MM’s currently.

The way these improvements converge, is that “Solana is simultaneously improving execution for makers via conditional liquidity and takers via Multiple Concurrent Leaders”, (Samani, 2025, para. 12) improving the capabilities of both parties, and therefore creating a more attractive capital market on Solana.

MCL does not have a definitive timeline, and we shouldn’t expect anything concrete until after Alpenglow is fully deployed and stable.

The Final Puzzle Piece:

According to Anza, we need 3 things to build the most liquid markets on-chain.

1. The chain must have more than enough capacity to ingest all market-relevant information in real time at line rate
2. The chain must have fast confirmations and an even faster tick rate (slot time)
3. The chain must allow applications to control their own execution ordering in order to facilitate experiments with new market microstructures

The items we have discussed so far have addressed the first two points sufficiently, and BAM partially attempts to cover the third.

Application Controlled Execution (ACE) will fully enable the third.

Although BAM is similar in nature to ACE, it is not the full solution. BAM introduces custom sequencing within block assembly, but ACE extends that flexibility to the protocol level, giving applications true control. This brings us to the last unlock on the roadmap, which combined with the items we previously discussed, will change everything for Solana.

Application Controlled Execution (ACE):

At its core, ACE shifts the power over transaction ordering away from validators and into the hands of applications themselves.

In today’s single-leader design, one validator controls which transactions are included, and the order in which they are executed during its leader slot. This makes applications vulnerable to sub-optimal sequencing, which open the door to harmful MEV, and other scenarios we discussed earlier like MMs being at a disadvantage while racing to cancel stale quotes.

ACE changes that. By letting applications define their own ordering logic, Solana enables apps to customize execution in ways that protect their users and make markets healthier. For example, NFT platforms could randomize order to make mints fairer. Lending protocols could prioritize liquidation transactions deterministically, reducing chaos during volatile events. And a whole lot more…

The bigger picture is that ACE allows Solana’s app layer to support multiple market microstructures simultaneously, without being constrained by a single, one-size-fits-all ordering scheme. This flexibility is critical for meeting the requirements to build Internet Capital Markets (ICM), where each market may require a unique balance between fairness, latency, and determinism.

Like we touched on at the beginning of the article, blockchains aren’t usually designed for one specific thing. Most L1 blockchains like Solana are multi-purpose.

The problem with multi-purpose chains is that if you want to do a very specific thing on-top of them, the infrastructure may not be optimal for that specific thing you want to accomplish.

Solana and the technical innovations we discussed in this article, directly address all of the areas in which it can improve to meet the standards of what ICM should be, and transport the masses over from centralized platforms to decentralized finance.

Thank you for reading. I hope you enjoyed.

References:

• Anza. (2025, May 19). Alpenglow: A New Consensus for Solana. Retrieved from https://www.anza.xyz/blog/alpenglow-a-new-consensus-for-solana
• Anza. (2025, July 24). The Internet Capital Markets Roadmap. Retrieved from https://www.anza.xyz/blog/the-internet-capital-markets-roadmap
• Anza. (2025, May 8). The Path to Decentralized Nasdaq. Retrieved from https://www.anza.xyz/blog/the-path-to-decentralized-nasdaq
• Helius. (2025, August 1). Block Assembly Marketplace (BAM). Retrieved from https://www.helius.dev/blog/block-assembly-marketplace-bam
• Yakovenko, A. (2024, September 18). X Post: 1804937522998591577. Retrieved from https://x.com/aeyakovenko/status/1804937522998591577
• Yakovenko, A. (2024, September 18). X Post: 1810222589991583922. Retrieved from https://x.com/aeyakovenko/status/1810222589991583922
• Multicoin Capital. (2025, January 22). The Solana Thesis: Internet Capital Markets. Retrieved from https://multicoin.capital/2025/01/22/the-solana-thesis-internet-capital-markets/
• BAM Community Forum. (2025, August 1). Brainstorming Paths to ACE on BAM. Retrieved from https://forum.bam.dev/t/brainstorming-paths-to-ace-on-bam/28

With the introduction of smart contracts, developers could build markets, lending protocols, and entire financial ecosystems that lived entirely on-chain. This movement came to be known as DeFi, or Decentralized Finance.

I believe that DeFi as a sector is going to attract serious capital over the next 10 years, and tokenized commodities are the next big frontier that will push this ecosystem into the mainstream.

Brief Historical Context:

Ethereum initially paved the way for DeFi when the mainnet launched in July of 2015. Some of the earliest meaningful DeFi experiments include projects like MakerDAO (launched in 2017), which pioneered the concept of decentralized stablecoins, allowing users to borrow against crypto collateral for the first time. This laid the foundation for decentralized lending and opened up an entirely new world of possibilities for cryptocurrency users in the early days of blockchain technology.

Things started to get interesting in 2018–2019, when protocols like Uniswap, Compound, and Aave emerged. Uniswap introduced the concept of AMMs (automated market makers), Compound expanded upon the lending/borrowing markets that MakerDAO conceptualized, and Aave brought the concept of flash loans to the scene. But everything changed in the summer of 2020…

This period of time became known as “DeFi Summer”, when a frenzy of liquidity flowed into the DeFi ecosystem on Ethereum. New primitives emerged, such as yield farming and liquidity mining (earning rewards by providing liquidity or staking tokens), and composable “financial legos” attracted billions of dollars into the ecosystem in a short period of time.

TVL exploded from less than $1B to over $10B within months. This influx of capital encouraged developers to put their thinking caps on and start swinging for the fences in terms of innovation. This brings us to the “modern” era of DeFi that we know and love today.

The Era of Modern DeFi:

While DeFi summer was exploding on Ethereum, Solana was quietly building a new blockchain with an emphasis on cheap transactions that finalized rapidly. It was nicknamed the “Ethereum Killer”, and its goal was to do exactly that — kill Ethereum. Solana launched in March of 2020, and as you can assume, this period was a crucial time for blockchain acceleration.

Now, in 2021–2022, things on Ethereum were still very much thriving, but protocols were springing up elsewhere, offering faster and cheaper DeFi opportunities. Institutions even started poking their heads into the blockchain space to see what the fuss was about, and a few of them played around with DeFi integrations. By that time, the “blue chips” of DeFi were already established on Ethereum: namely, MakerDAO, Aave, Compound, Uniswap, Curve, and Yearn Finance. These protocols were the “top dogs”, and they had impressive amounts of liquidity stored on their respective platforms.

Then there was a bit of a reality check… Terra (LUNA), an “algorithmic stablecoin”, completely collapsed and went to essentially zero in a matter of days. Many crypto enthusiasts remember that day vividly. If UST collapsing wasn’t bad enough, FTX’s insolvency was the true black swan that destroyed a lot of the great momentum that DeFi summer had brought to blockchain tech. Regulation clamped down on stablecoins, lending protocols, and tokenized assets in general. The blowups of these institutions created a ripple effect throughout the entire space, and hope for the future of finance was temporarily dampened.

The New Frontier: Real-World Assets (RWAs)

Since early 2024, DeFi has really matured. The next evolution of crypto isn’t just FartCoin trading, contrary to popular belief. It’s RWAs and stablecoins being brought on-chain by some of the most well-respected institutions in the world to use within DeFi ecosystems and build their own blockchains. According to DeFi Llama, as of September 9th, 2025:

• Ethereum has a DeFi TVL of ~$90B
• Solana has a DeFi TVL of ~$12B

Impressive growth considering how new these concepts are.

Right now, institutions are in a rush to get exposure to the stablecoin business. The reason is simple: stablecoin issuers back their tokens primarily with U.S. Treasuries, which currently yield around 4–5%.

With tens of billions in reserves, this translates into billions of relatively stable, low-risk annual revenue. Every time users deposit dollars to mint stablecoins, issuers can invest those reserves into Treasuries and money market instruments, turning stablecoin demand into a highly attractive yield business at massive scale. Here is the outlook on Stablecoins as of, September 9th, 2025:

RWAs are still in their infancy, but tokenization is accelerating. We’ve seen tokenized U.S. Treasuries, private credit, real estate, and even collectibles like Pokémon cards on-chain. Emerging regulatory frameworks are enabling more major players to participate in the coming months and years.

The leader in issuing institutional-grade RWAs is currently Securitize, who offers products that are just now being integrated into top-tier DeFi protocols like Aave. Whitelisted institutions can borrow against their RWAs on Aave’s Horizon Market, representing a significant step towards deeper RWA integration within the DeFi ecosystem. Currently, this access is mostly limited to institutions, resulting in ample supply but relatively little borrowing activity. That will likely change when web2 companies officially release their own L1 and L2 blockchains.

My prediction is that commodities will be the catalyst that brings DeFi into the mainstream, and I will explain why in the next section. This is the current breakdown of the entire RWA ecosystem as of today according to RWA.xyz:

Why Tokenized Commodities are bound to explode:

Commodities are generally “boring” assets that don’t experience a lot of volatility, but they are the backbone of the global economy. Oil, gold, metals, wheat, corn — these are the raw materials that drive industries and trade worldwide. Yet these markets are notoriously opaque, fragmented, and gate-kept by large institutions. That is why DeFi is the perfect place for them to flourish…

By tokenizing commodities and bringing them on-chain, we unlock:

• Accessibility: Anyone with a crypto wallet can gain exposure, not just hedge funds and governments.
• Liquidity: 24/7 global trading without intermediaries.
• Composability: Commodities can serve as collateral in lending protocols and fuel derivatives markets.
• Intrinsic Value + Familiarity: Commodities are widely recognized as trusted stores of value.
• Macro Demand for Inflation Hedging: Gold has historically been a hedge against inflation, but it is hard to transport, and cumbersome to store.
• Sophisticated Investors: Commodities typically attract risk-averse, professional investors. Exactly what the DeFi space currently lacks.

Imagine borrowing stablecoins against tokenized gold, lithium, or oil, or hedging energy costs in real time — all through a wallet that is accessible anytime.

This could finally push DeFi into mainstream finance. Until now, most DeFi assets — governance tokens, yield strategies — feel abstract or irrelevant to traditional finance participants. Food, energy, and raw materials, however, are universally understood. Tokenized commodities bridge this gap, offering efficient ways to unlock capital with assets people actually depend on. This is how DeFi can speak Wall Street’s language.

We are still very much in the early stages of tokenized commodities. Paxos leads with PAXG, Tether follows with XAUT, and after them, there’s a significant drop-off. Both of these assets are versions of tokenized gold from different issuers. This signifies that innovation has only just begun in this emerging market.

While every company rushes to tokenize stocks and other highly liquid markets, I believe the real opportunity will be to tokenize other commodities. Lithium, silver, copper, platinum, palladium, oil, natural gas, wheat, corn, and other key raw materials are the logical next step.

From MakerDAO to Uniswap to the chaos of DeFi Summer, DeFi has grown through cycles of experimentation and innovation. Now, the stage is set for the next giant leap…

Commodities are the world’s oldest markets; DeFi is the world’s newest. Bringing them together may be the breakthrough that finally pushes decentralized finance into the mainstream.

Thanks for reading. If you enjoyed this, check out more of my research here on Medium. For more niche market deep dives be sure to checkout my Youtube Channel: OnChain Education

PumpFun, the first and most popular token launchpad on Solana right now, generates roughly $700m in fees per year, with about ~$450m of that being revenue. Before other launchpads emerged, all of what they generated in fees were revenue. But that changed when new launchpad competitors started offering “creator rewards”, which forced Pumpfun and every other launchpad to follow suit.

Pumpfun takes a 1% fee off of every purchase or sale of each trade made with the coins on their platform. As of May 13th, 2025, the creator of the token now receives 0.05% of all trade fees.

Token launchpads are a highly profitable business, as evident with PumpFun’s success. But I am doubtful that they will continue thriving if something does not change with the # of tokens being launched per day. The screenshot below represents PumpFun’s revenue according to DefiLlama.

Due to the recent influx of operating launchpads, and the competition that comes with them, token deployers that are using these platforms to launch are now getting a split of the fees that are generated off of each new token they create. This can be HIGHLY lucrative for token deployers, and for the launchpads themselves, but in reality this incentive mechanism is actually deterring net-new blockchain users from staying on-chain.

There are a number of problems that these recently introduced “creator rewards” are causing. The first problem is that it is completely free and mind-numbingly easy to launch a token on any of the token launchpads, which are growing in number everyday.

This allows token deployers to have an unlimited number of chances to create a “runner” (term collectively used by memecoin traders to describe a token that breaks a 1m marketcap), with absolutely no downside risk if it does not work out. If their token goes to zero, they do not get discouraged, they do not face any financial consequence, they simply just think of a new idea and try again. The only people suffering in this scenario are the traders buying their tokens.

As a result, the launchpads are indirectly incentivizing the rapid demise of their own platforms, by welcoming these token deployers to create as many coins as possible.

The reason why this is hurting their own platforms is because memecoin traders are fatigued due to all of this token saturation. What used to be a fun and potentially lucrative way to use your Solana on-chain, is quickly becoming a sure-fire way to become frustrated with blockchains, give your money to insiders + token deployers, and want to give up on blockchain experimentation and the “future of finance”. The traders that are generating the fees for these launchpads, are becoming discouraged to continue buying their tokens.

The reason why this is stunting the consumer growth in crypto, is simple. New-entrants are getting burned by the very thing that is attracting them to give this technology an honest try.

The question is, do the launchpads care? My guess is probably not, because they know that more launches = more fees = more revenue. That is why the creator rewards were introduced in the first place.

But my next question is if they do not do something, will the memecoin traders move on and will we see this memecoin meta dry-up?

This is eerily similar to what happened to the NFT space after launchpads were introduced in 2022. NFTs on Solana thrived until launchpads were introduced, and it was simply because the demand outweighed the supply. Launchpads, wether they are for NFTs or Memecoins, are not a sustainable or productive solution to meet demand. They over-stimulate supply too quickly, which causes demand to naturally dwindle.

What is making this bad problem even worse, is that the new launchpads feel the need to stand out from their competitors with a differentiating factor, so now they are all offering even higher percentages in “creator rewards” for token deployers. It is essentially a race to the bottom for new launchpads trying to incentivize deployers.

Saturation and fatigue seem to be the consumer killer in crypto, but many of the memecoin infrastructure providers need to incentivize launches to keep making money. This is problematic for consumer growth, but that doesn’t mean there is no solution.

There is a lot they can do to improve the saturation situation, that can actually be more lucrative for their bottom line as well. Simply charging 1 Solana to launch a token would make the situation a LOT better overnight. Or furthermore, they could theoretically require a 5 Solana deposit that is held in escrow and returned to the deployer a week after the token launches. This would simply serve as a way to increase the quality of launches, and also greatly reduce a lot of the token spam that comes from bots. The fee structure can stay the same and traders + platforms would benefit due to less saturation.

Deployers are consistently launching roughly 30,000 tokens every single day, and they are fully incentivized to keep doing so. The worst part is, most of these tokens are deployed by the same 7–15 automated bots, which is creating another problem for retail traders.

The deployer bots typically launch tokens based off of the most popular news that comes out throughout each day, and most of the time the different bots will launch a unique version of the exact same token concept, the only difference is the contract addresses. This is what memecoin traders call “PvP”(player vs player) because it is forcing traders to pick one coin over another, fragmenting liquidity and negatively impacting both coins + the traders backing them.

This “creator reward” concept is creating a negative feedback loop that incentivizes token creators to launch as many tokens as possible, essentially creating a “spray and pray” environment for memecoin launches.

The screenshot below displays the launchpad marketshare data according to MobyScreener. I only included the top 10 to keep the screenshot manageable.

Memecoins were the ultimate consumer growth tool within the entire crypto space. They attract retail and professional traders with a broad range of crypto experience due to their upside potential. From complete beginners (net-new users) and “whales” who are trading these coins with 7 figures, everyone wants to see if they can hit an 100x.

I would argue that memecoins have actually been a net-positive for the growth of blockchain awareness + experimentation, but now they are actually limiting growth because they leave a bad taste in new users mouth.

The TLDR here is that launchpads should reconsider their incentive structure to keep traders happy. Their business model relies on traders buying their tokens, not necessarily token deployers launching on their platform. There will always be demand for speculation, but if there are too many tokens to speculate on, the liquidity will eventually dry up and their business will suffer. We are already seeing a 95% decrease in on-chain traders since January, and I do not expect traders to come back as long as there are this many new tokens emerging on a daily basis.

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