Why Crypto Protocol Tokens Matter

Having read multiple different narratives about Web 3.0 and the role of tokens, I decided to give it a shot myself.

Let me know how I did. :)

Summary

  • There exists X amount of valuable work.
  • That valuable work is split between (crypto) protocols and the applications they power.
  • Crypto protocols are able to perform much of the valuable work previously handled by applications.
  • As crypto protocols perform most of the valuable work, they also capture most of the value.
  • Gaining access to this value occurs through the crypto protocols’ native tokens that represent ownership of respective crypto protocol.
  • Tokenholders are able to participate in the governance of a crypto protocol.
  • The more activity that migrates to a crypto protocol (=the more applications that are built on top of it), the more valuable its governance (and token) becomes.


















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