CoinFund’s David Pakman: Tokenomics Still Unsolved

David Pakman, managing partner at CoinFund, argued on Tuesday that the crypto industry has not solved tokenomics. He warned many native tokens move on online narratives rather than the economic performance of the networks they represent.

Pakman outlined a choice facing early contributors: accept payment in a project's native token, which may rise if the network succeeds, or take stable, cash-like payments that offer quicker, more certain compensation.

He described the trade-off as “this battle between economic incentive in the task you're doing to help build out a network and short-termism versus long-termism view on when you want that return paid to you.” He noted contributors who expect high future network value will favor native token pay, while those seeking faster results will prefer stablecoins.

Pakman recalled mining Ethereum early in his career and benefiting from being paid in ether and holding as the asset rose. He observed that most projects have not produced similar long-term returns for token holders.

He asked: “So many are so wrecked for so long … do they have some updraft that's going to power their long-term returns, or are they just these sort of short-term market perturbations that are based on narrative or Twitter activity?”

Pakman suggested projects could pay contributors in stablecoins to attract people who do not want to bet on a token's future price. He observed: “We're in this world where younger people really want their bets to resolve much more quickly and take their winnings or losses and then move on.”

He pointed to Ether.fi, where CoinFund is an investor, as an example of a protocol with a functioning product and a governance token that investors expect to reflect business value. He called for regulatory clarity, noting current SEC action has hindered formal links between tokens and business value and referencing the Clarity Act now before Congress.

Pakman launched CoinFund in 2015 and leads its venture investing. The firm's disclosed investments include World, Superstate and Ondo.