In crypto, launching a token has become the default.
New project? Create a token.
New platform? Add a token.
New idea? Tokenize it.
It’s expected.
But most of the time, it’s unnecessary.
The Assumption That Everything Needs a Token
There’s a built-in assumption across the space:
If it’s a Web3 project, it should have a token.
This comes from early success stories where tokens:
- Funded development
- Incentivized users
- Created ecosystems
But what worked in one context doesn’t automatically apply to every project.
And forcing a token into a system that doesn’t need one creates problems.
What a Token Is Actually Supposed to Do
A token isn’t just a fundraising tool.
It’s an economic layer.
It should:
- Facilitate usage
- Align incentives
- Capture value within the system
- Enable functionality that wouldn’t exist otherwise
If a token isn’t doing one of these things in a meaningful way, it’s likely unnecessary.
The Problem With Forced Tokenization
When projects introduce tokens without clear utility, they create friction.
Users are required to:
- Buy and manage an asset they don’t need
- Understand token mechanics unrelated to the product
- Take on additional risk just to use the platform
This complicates the experience.
Instead of improving the product, the token becomes a barrier to using it.
Why Simpler Models Often Work Better
Most successful products outside of crypto don’t require tokens.
They use:
- Subscriptions
- Payments
- Usage-based pricing
These models are:
- Familiar
- Predictable
- Easy to understand
When a crypto project replaces simple models with unnecessary token layers, it often reduces usability instead of enhancing it.
The Misalignment Between Product and Token
One of the biggest issues is misalignment.
The product may solve a real problem.
But the token:
- Exists separately from that value
- Moves based on speculation
- Doesn’t directly reflect usage
This creates a disconnect.
Users care about the product.
Markets care about the token.
And the two don’t always move together.
Why Tokens Become a Distraction
Instead of focusing on building a product, projects often shift focus to:
- Token price
- Market performance
- Short-term attention
This changes priorities.
Development becomes secondary to maintaining interest in the token.
And over time, this weakens the actual product.
When a Token Actually Makes Sense
Tokens are powerful when they’re necessary.
They work best when they:
- Enable decentralized coordination
- Power on-chain functionality
- Represent real usage within the system
- Create aligned incentives between participants
In these cases, removing the token would break the system.
That’s the key test.
If the product works just as well without a token, it probably doesn’t need one.
The Cost of Getting It Wrong
Adding a token introduces complexity.
It creates:
- Economic pressure
- Regulatory considerations
- User onboarding friction
- Market expectations
If the token doesn’t provide clear value, these costs outweigh the benefits.
And the project becomes harder to build, scale, and maintain.
Why the Industry Is Starting to Shift
There’s a growing recognition that not everything needs to be tokenized.
Projects are beginning to:
- Focus on product-first development
- Introduce tokens only when necessary
- Separate utility from speculation
This shift reflects a more mature approach.
One where tokens are tools—not defaults.
The Difference Between Innovation and Imitation
Early crypto innovation created powerful new models.
But over time, many projects began copying those models without understanding them.
Tokenization became imitation instead of innovation.
The next phase of the market is correcting that.
Focusing less on copying what worked before—and more on building what actually makes sense now.
WTF does it all mean?
Not every crypto project needs a token.
And forcing one into the system usually creates more problems than it solves.
Tokens are powerful when they’re necessary.
But when they’re not, they become noise.
Because in the end, the best projects aren’t the ones with the most tokens.
They’re the ones that actually work.
Want to Go Deeper?
If you want to understand how real crypto systems are designed—and where most projects go wrong—I break it down across my books.
Start here:
https://books.jasonansell.ca/
Or check out:
- Understanding Web3 – A clear breakdown of how real Web3 systems are structured
https://books.jasonansell.ca/mastering-crypto-series/understanding-web3 - Understanding Blockchain – Learn the foundation behind decentralized systems
https://books.jasonansell.ca/mastering-crypto-series/understanding-blockchain - A Beginner’s Guide to Cryptocurrency – Practical insights into how crypto markets and assets actually work
https://books.jasonansell.ca/mastering-crypto-series/a-beginners-guide-to-cryptocurrency
