Equity controls the actual profits, are crypto tokens overvalued?

Delphi Digital analysts reignite the battle over the value of tokens and equity

Delphi Digital analysts recently revived a discussion on whether cryptocurrency tokens and company equity can share value without creating a conflict of rights.

Core Views

Delphi analysts pointed out that equity usually enjoys company profits, thereby limiting the value that can be obtained by associated tokens. Project parties may take advantage of the vague boundary between tokens and equity to support valuations that far exceed the actual economic rights of the token holder. Repurchase, destruction and cost-sharing mechanisms can link token value to revenue, but specific implementation still depends on the project's own design.

During a roundtable discussion on July 15, analyst Ceteris said that the market value of tokens should usually be lower than the equity valuation of affiliated companies, because equity holders usually receive the majority of business profits. Delphi asked,"Are cryptocurrency tokens fundamentally flawed? "The discussion was published on the topic, covering projects such as Grass and Venice-these projects have parallel structures of private companies and publicly traded tokens.

Equity enjoys clearer profit distribution rights

Equity rights give shareholders ownership of the company. Shares represent proportional interests in a company's assets and profits. Ordinary shareholders can also vote on company affairs and receive dividends upon approval by the board of directors. The rights of cryptocurrency tokens vary: some provide network access, rewards or governance voting rights; others support pledges, fee discounts, or payment functions. Holding a token does not automatically give the owner legal claims to the company's income, assets, or sales proceeds, and the specific rights depend on the project documents, contracts, and legal structure.

Ceteris believes that this difference should limit the valuation space of the token, especially when there are also equity investors in the project. He said that most of the "real cash profits" end up going to shareholders, and the market value of the token "should usually be smaller" unless the project establishes a clear value transmission mechanism.

Fuzzy boundaries create token valuation bubbles

Ceteris points out that problems arise when projects deliberately blur the boundary between token and equity. Companies may promote tokens as the core of their ecosystem, while retaining revenue, intellectual property, customer contracts and sell rights in equity entities. Token buyers will therefore price the asset based on the value of the entire business entity. This structure creates conflicts of interest: equity holders want to retain profits, raise funds, or seek to sell; token holders prefer fee sharing, repurchase, destruction or stronger on-chain governance. Management must decide which party can get value from the product.

Delphi used Grass and Venice as examples in the discussion, but did not assert that all dual structures would fail. Speakers focused on whether the project disclosed revenue flows and whether token holders had enforceable or procedural economic rights. Governance mechanisms alone may not solve the problem-tokens may manage incentives or technology upgrades, but they may not necessarily control the companies that hold core software and business agreements.

Strong markets may conceal structural flaws

Yan Liberman, co-founder of Delphi Digital, said that tokens may still perform well when market conditions are strong. Increased liquidity can drive up prices, even if tokens have a limited correlation with revenue. Traders may be more focused on user growth, online exchanges or market narratives than on cash flow allocation. However, Liberman warns that this structural flaw can be exposed when the business environment deteriorates or shareholders seek to exit. A sale may transfer the operating company, brand or intellectual property to the buyer, while token holders are excluded from the transaction. The results depend on the relevant agreement connecting the company to the network.

Risks are also prominent when revenue falls. Equity investors have formal rights within the corporate structure, and token support may depend on corporate decisions or governance votes. Projects can reduce incentives, delay buybacks, or change utility unless there are binding rules that prevent these changes. Equity also faces risks such as dilution, bankruptcy and operating losses; tokens may provide global liquidity and a transparent on-chain system. Delphi's core argument is that the value of these two different rights should be accurately assessed, rather than treating them as equivalent claims.

Project explores clearer path to token value

Multiple cryptocurrency projects are trying to close the gap through income-pegging mechanisms. A repurchase mechanism uses agreement revenue to purchase tokens; a destruction mechanism permanently removes tokens in circulation; and a fee-sharing mechanism distributes part of network revenue to eligible participants. Each model establishes a clearer connection between business activities and the token economy.

Hyperliquid has used transaction revenue to purchase HYPE tokens through its aid fund. As of May 2026, the mechanism has used more than US$1.16 billion in fees for token purchases. Jito has proposed using DAO revenue for JTO repurchase and permanent destruction, and plans to direct its share of JTX revenue to the token mechanism at least until the fourth quarter of 2027. Uniswap's fee plan converts agreement revenue into UNI destruction, covering multiple support networks. The system directly links agreement fees to reduced token supply rather than paying dividends to holders.

These mechanisms do not convert tokens into equity. Holders may still lack claims on company assets, dividends or acquisition gains. But automated and open and transparent mechanisms make token demand easier to measure-through indicators such as revenue, repurchase volume, supply changes and governance controls. The Delphi roundtable discussion called for lower expectations for tokens when these correlations are weak. Its core test is: What types of assets does the cash generated by the business flow to? When equity generates income and tokens rely mainly on market demand, giving similar valuations for the two may overestimate the economic status of the token.