In recent years, the cryptocurrency ecosystem has evolved from a speculative playground into a space where sustainable value creation is becoming increasingly critical. As market dynamics shift and investor expectations mature, crypto projects must move beyond hype and focus on tangible economic models — particularly how they generate and distribute profits. One powerful way to do this? Learning from traditional companies.
The Shrinking Liquidity Reality
Not long ago, each major cryptocurrency enjoyed substantial stablecoin liquidity — around $1.8 million per asset in March 2021. Fast forward to March 2025, and that figure has plummeted to just $5,500. This dramatic decline reflects a broader trend: increasing competition and decreasing available capital per project.
With over 40 million tokens now competing for user attention — up from just 5 million three years ago — capturing and retaining holders has never been harder. Many projects resort to short-term tactics: building Discord communities where members greet each other with “GM,” launching token airdrops, or running viral marketing campaigns.
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But these strategies often fail to create lasting loyalty. Once users collect their tokens, they quickly move on to the next trending project. Why should they stay?
The answer lies in real cash flow and sustainable revenue models — something many crypto projects still lack.
The Russ Hanneman Syndrome in Crypto
Fans of the HBO series Silicon Valley will remember Russ Hanneman, a brash billionaire investor who boasts about becoming rich by "putting radio on the internet." He embodies the archetype of the hype-driven entrepreneur — obsessed with valuation, visibility, and viral growth, while ignoring fundamentals like product-market fit, defensible moats, and recurring revenue.
Today’s crypto landscape is full of Russ Hannemans.
Many projects prioritize speculative narratives over sustainable business models. They chase investor excitement with flashy announcements, celebrity endorsements, or complex tokenomics diagrams — but avoid answering the most basic question: How does this project make money?
Joel’s recent essays — “Death to Stagnation” and “Make Revenue Great Again” — echo a growing sentiment in the space: it’s time for crypto to grow up. Just as Russ mocked Richard Hendricks for worrying about long-term sustainability, many crypto founders dismiss revenue as “boring” or “not Web3 enough.” Yet without revenue, there can be no real value distribution.
And without value distribution, token holders have no reason to stay.
Why Profit Distribution Matters
In traditional finance, companies return value to shareholders through dividends, buybacks, or reinvestment into growth. These mechanisms align incentives: investors are rewarded for holding, and management is accountable for performance.
Crypto projects need similar systems.
When a protocol generates revenue — whether from transaction fees, subscription services, or licensing — it creates an opportunity to distribute profits back to token holders. This transforms tokens from speculative assets into income-generating instruments, much like stocks or bonds.
Consider these proven models from traditional business that crypto can adapt:
- Dividend-like distributions: Protocols can allocate a percentage of fees directly to stakers or liquidity providers.
- Treasury-backed buybacks: Surplus revenue can be used to buy back tokens from the open market, reducing supply and increasing scarcity.
- Revenue-sharing pools: Create community-controlled funds that redistribute earnings based on participation or contribution.
These aren’t theoretical ideas. Projects like Uniswap, Chainlink, and Aave have explored various forms of value capture and distribution — though most are still in early stages.
👉 See how next-generation platforms are redefining profit-sharing in decentralized ecosystems.
Building Sustainable Value: Beyond Hype
To compete in a crowded market, crypto projects must offer more than memes and momentum. They need real utility, transparent economics, and clear paths to profitability.
Here’s how forward-thinking teams are doing it:
1. Focus on Real-World Use Cases
Instead of chasing trends, build products people actually use — decentralized exchanges, lending platforms, identity solutions, or data oracles. The more real-world demand a protocol serves, the stronger its revenue potential.
2. Design Tokenomics Around Cash Flow
Tokens shouldn’t exist just for governance or access. Tie them directly to revenue streams — e.g., staking rewards funded by protocol fees, or profit-sharing mechanisms for long-term holders.
3. Prioritize Transparency and Accountability
Publish regular financial reports. Show users exactly where revenue comes from and how it’s being used. This builds trust and attracts institutional-grade investors.
4. Empower Community Ownership
Let token holders vote on treasury allocations, development priorities, or distribution policies. True decentralization means giving users a real stake — not just a digital badge.
Frequently Asked Questions (FAQ)
Q: Can crypto projects really generate consistent profits like traditional companies?
A: Yes — especially those providing essential infrastructure (e.g., oracle networks, cross-chain bridges, or Layer 2 solutions). As adoption grows, so does transaction volume and fee income.
Q: How can small projects compete with larger ones in profit distribution?
A: By focusing on niche markets and efficient operations. Smaller teams can innovate faster and offer higher yield distributions due to lower overhead.
Q: Is distributing profits compatible with decentralization?
A: Absolutely. In fact, it strengthens decentralization by aligning incentives across developers, users, and investors — reducing reliance on centralized funding rounds.
Q: What prevents teams from misusing treasury funds?
A: Smart contract audits, multi-signature wallets, and community governance proposals help ensure transparency and accountability in fund usage.
Q: Should all crypto projects aim to generate revenue?
A: Not necessarily — public goods like open-source tools may rely on grants or donations. But for most commercial protocols, revenue is essential for survival and growth.
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Conclusion: From Speculation to Sustainability
The era of “build it and they will come” is over. With liquidity drying up and competition intensifying, crypto projects must adopt mature financial practices — including profit generation and fair distribution.
By learning from traditional business principles — such as shareholder returns, transparent accounting, and sustainable growth — blockchain ventures can transition from speculative experiments to enduring economic systems.
The future belongs not to the loudest hype machine, but to the projects that deliver real value — consistently, fairly, and transparently.
It’s time to make revenue great again.
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