I have been following your blog for quite a while and am really thankful for the information you provide mostly regarding token economies. Usually I agree with everything you provide, but this new concept of creating two tokens, one utility and one security, is something I have a different opinion about.
Restricting the utility token from trading is really a great challenge, speculation might harm the token as well as the project this token was created to support. However, introducing two different types of coins poses some significant challenges as well. Firstly, I think that investors would not want to invest in a crypto that is nothing more than preferred shares of a startup, because if they wanted to do so they’d go to the traditional markets and this kind of tokens do not really require blockchain to be involved.
Secondly, there are raising legal risks regarding security tokens, we do not yet know how these kinds of coins will be regulated and a rational investor would try to avoid this kind of uncertainty.
Thirdly, if there is no liquidity for the utility tokens, users will become reluctant to owning them as they won’t be able to cash out quickly if they will need/want to.
Apart from these points, I have already seen several “not so good” blockchain startups that utilize this model and most probably projects who cannot build up the demand side of the economic equilibrium (based on the utility) will try to use this tool, but from my point of view it cannot ensure long term sustainability of the token prices and the projects behind them.
I would love to hear your thoughts regarding the above three problems. Is there a way to avoid them? How do you see this model working in the long-run?
