TheBlock
CoinFund partner David Pakman argues that most crypto tokens still trade on online narratives rather than the underlying economics of the networks they claim to represent, a mismatch he frames as a structural flaw in the sector's token design.
Speaking on the broader question of why so many token launches underperform after their initial cycle, Pakman suggested one practical workaround: paying contributors in stablecoins rather than native tokens. The idea is to let nascent networks attract builders and operators who want to participate in the upside of a protocol without taking the directional bet that a volatile native asset forces on them.
Why it matters
Tokenomics has been a recurring weak point since the 2017 ICO wave, and Pakman's framing puts the blame on the incentive layer rather than on market timing or narrative churn. If contributors are paid in a token whose price they are simultaneously trying to support, the system leans on story-driven demand rather than measurable network performance. A stablecoin-denominated compensation model would decouple participation from price action and let the protocol accrue value on its own merits.
Market impact
The read for investors is that projects which continue to pay teams in native tokens carry a hidden overhang, with insider selling pressure baked into every payroll cycle. Funds that have moved toward stablecoin-denominated contributor comps, or toward buyback-and-distribute models tied to real revenue, are increasingly the ones analysts treat as investable beyond a single narrative window.
Frequently asked questions
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What did David Pakman actually say about crypto tokenomics?
The CoinFund partner argued that most crypto tokens continue to trade on online narratives rather than the underlying economics of the networks behind them, a mismatch he framed as a structural design flaw rather than a cyclical issue.
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What is Pakman's proposed fix for tokenomics?
Pakman suggested projects pay contributors in stablecoins rather than native tokens, so nascent networks can attract participants who are unwilling to take the directional bet on a volatile native asset.
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Why does paying contributors in stablecoins matter?
It decouples team compensation from the price of the token the team is simultaneously trying to support, removing a source of recurring insider sell pressure and letting the protocol accrue value on its own merits.
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Which crypto projects are most exposed to the tokenomics critique?
Projects that still pay core teams in native tokens and rely primarily on narrative-driven demand are the most exposed, since they carry hidden insider overhang and no structural reason for holders to stay once the story fades.
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Does this view affect how investors should evaluate token launches?
Yes. The implication is that funds using stablecoin-denominated contributor comps or revenue-linked buyback models are increasingly the ones analysts treat as investable beyond a single narrative window.
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