According to BlockBeats, Jake Chervinsky, Chief Legal Officer at Variant Fund, expressed on social media that the debate over tokens versus equity is just beginning. Many crypto projects emerged before the tenure of former SEC Chairman Gary Gensler, when stringent regulatory pressures led development companies to focus value on equity rather than tokens. As the policy environment evolves, new opportunities arise, requiring significant time and experimentation to determine how tokens and equity can effectively collaborate.
Chervinsky emphasized the importance of clarity for token holders, who must understand what they own, control, and cannot control. The design space for token value capture is vast, far exceeding that of traditional equity. He believes it is unlikely that a standardized token model akin to stocks will emerge anytime soon. Tokens should carry on-chain value, while equity should hold off-chain value. The core innovation unlocked by tokens is self-sovereign ownership of digital assets, allowing holders to directly own and control on-chain infrastructure without relying on off-chain intermediaries.
Off-chain value differs, as token holders cannot directly own or control off-chain income or assets. In most cases, these values should belong to equity rather than tokens. However, other models may also be viable. Some projects might opt for a single asset model without equity, while others may treat their tokens as tokenized securities, adhering to new rules the SEC may establish for this market.
