The landscape of crypto funding is undergoing a seismic shift as companies and investors alike explore new mechanisms to fuel innovation. What began as an era dominated by venture capital is now seeing an unprecedented rise in token-based treasury strategies.
In 2025, Digital Asset Treasury (DAT) raises surpassed $15 billion, eclipsing venture funding by approximately 2x. Meanwhile, traditional crypto venture equity deals hovered around $6–8 billion, a dramatic drop in deal volume from 1,933 in 2024 to just 856 so far in 2025. July’s snapshot was even more startling: DAT strategies raised roughly $6.2 billion compared to a mere $1 billion in venture deal values.
This capital movement represents more than numbers—it reflects a fundamental preference for immediate token liquidity over long-term equity waits. With token holders able to trade assets on exchanges or OTC desks within months, the allure of rapid mark-to-market gains has never been stronger.
Unlike equity, which can remain locked in startups for 5–10 years until acquisition or IPO, tokens offer self-sovereign ownership of digital property. Tokenholders have transparent onchain claims on revenue streams and protocol assets—qualities impossible to replicate with private equity.
Yet the distinction between utility tokens and company-backed tokens is critical. While proper infrastructure tokens align closely with onchain value, company-issued tokens often resemble securities, introducing a power asymmetry: tokenholders cannot audit offchain revenues or override corporate governance decisions.
As funds redirect to DAT strategies, capital diversion effects become evident. Millions that once seed-funded ten early-stage projects now flow into single public-company treasuries. The result? A slowdown in new Web3 infrastructure and dApp development, raising concerns about the diversity and resilience of the ecosystem.
Investors favor tokens for several reasons:
Optimal token design hinges on clear alignment with onchain value flows. Tokens must ensure direct ownership of protocol revenues and avoid replicating equity-like securities. Market data highlights that users value actual ownership far more than mere governance voting rights.
Key principles include:
For ventures with substantial offchain revenue, tokens should be funded through treasury grants or inflation rather than dividends or buybacks, preserving a clear onchain revenue model.
Investors often accept slightly lower yields on tokens in exchange for unforeseen liquidity flexibility. Their willingness to trade potential returns for access grows with mid-term liquidity needs, market depth, and risk aversion.
Entrepreneurs also benefit, achieving higher payoffs when issuing tokens instead of equity, particularly under conditions where quick access to capital is paramount.
The evolving regulatory environment now offers clearer guidance on distinguishing tokens from securities, enabling companies to confidently deploy DAT strategies. Founders can revisit token-equity relationships and design more robust, transparent token systems.
To foster sustainable innovation, the community should explore:
By balancing liquidity, governance, and value capture, the crypto ecosystem can harness the best of both worlds: the dynamism of token markets and the stability of long-term equity support. This balanced approach promises to finance the next generation of Web3 infrastructure and decentralized applications.
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