Tokens solve the chicken or egg problem
A two sided marketplace can be bootstrapped into existence via subsidies (demand + supply side) in a credibly neutral manner before user fees reach sustainable levels to fully cover service provider operating costs + profit margin
Tokens facilitate implicit + explicit incentives
The economic incentives of infra service providers are aligned with that of the network as they have financial exposure to the network’s health via token payments, staking, holdings, and/or hardware specific to that token
Tokens make infra more anti-fragile
The cryptoeconomic security of tokenized infrastructure is isolated from any unrelated tokens or networks, which could be devalued for unrelated reasons, especially important when the infra is blockchain and/or system agnostic
Tokens facilitate scalable security
With a flywheel of value capture (dividends, burn, treasury control,etc), the network’s token-backed cryptoeconomic security increases at the time it’s needed most to super greater user demand and value secured
Tokens enable scalable growth
An increase in value capture grows the per-unit utility of the issued subsidy allocation used for fueling non-debt based growth, facilitating new value creation and capture opportunities, growing market share
Tokens provide neutral initial funding
Avoid the need to seed control of infra protocols to centralized capital allocators via traditional direct equity sales or raising debt, which would place additional up-charge on services, making the infra more competitive and neutral
Tokens facilities social network effects
Creation of an economically aligned community of services providers, holders, and users with individual incentives to seek the infra’s adoption and usage for greater value creation and capture
Tokens enable distributed governance control
Tokenized infra can have programmatic on-chain control or off-chain economic signaling regarding the infra’s future development direction through the use of the token, more direct skin in the game
TL;DR
Decentralized infrastructure protocols without a token simply can’t compete against tokenized infrastructure counterparts
Unfortunately there still seems to be a fundamental misunderstanding regarding the key role of tokens, but results speak for themselves
