The venture investor said many tokens trade on narratives rather than fundamentals, and argued stablecoin payments could better align incentives for contributors wary of long-term token exposure.
CoinFund managing partner David Pakman said crypto has yet to solve a core tokenomics problem: making native tokens reflect the long-term value of the networks or products they are meant to represent. Speaking Tuesday on The Block's The Starting Block podcast, Pakman said many tokens still move more on online narratives than on the economic performance of the underlying project, complicating how early contributors think about compensation. He framed the issue as a trade-off between short-term and long-term incentives. Contributors who believe a network's future value will far exceed its current token price may prefer to be paid in native tokens, he said, while others may be better served by stablecoins (tokens designed to hold a steady value). Pakman argued that stablecoin compensation could help newer networks attract participants who do not want to take a long-duration bet on a project's token. Pakman drew on his own experience mining Ethereum, saying he benefited from holding ether as it appreciated, but added that most projects have not delivered similar outcomes and instead left contributors with tokens that lost much of their value. In his view, the key question is whether token prices can reconnect to the fundamental value of the network rather than remain driven by short-term market narratives or social media activity. He cited Ether.fi as an example of a protocol with a successful product where investors would want the governance token (holder voting token) to capture some of the value created by the business. CoinFund is an investor in Ether.fi. Pakman said aggressive action by the SEC (U.S. securities regulator) has prevented a clearer link between token value and business performance, and he expressed hope that the Clarity Act, a crypto market structure bill before Congress, could provide the regulatory certainty many in the industry believe is needed to increase participation and investment. CoinFund was started in 2015. Its investments include World, Superstate and Ondo.