Crypto Venture Capital Moves Beyond Token Speculation

Crypto venture capital is moving away from the speculative token generation event (TGE) model, according to Paul Klay, a venture partner at Begin Capital. He argues that many token launches have performed poorly because token holders receive little direct claim on project revenue, while teams retain operating income. Unlike an IPO, crypto token issuance has often involved limited due diligence, weak transparency and valuations disconnected from business fundamentals. The model has also become highly complex. Marketing, influencers, exchanges, market makers, liquidity, launch timing and token distribution can determine whether a trade produces a 500% gain or falls to zero. This has encouraged short-term speculation rather than investment based on product value, users and revenue. Klay says the industry is responding by combining SAFE and SAFT agreements, strengthening due diligence and prioritising projects with proven product-market fit. Funding is increasingly targeting payments, digital banks, fiat on-ramps, prediction markets, meme-coin launch platforms and artificial intelligence, while DePIN and real-world assets are receiving comparatively less capital. The crypto venture capital sector is becoming more selective. Retail traders are also separating obvious short-term bets from projects with real products, users and income. The article suggests that the middle ground of unverified promises is disappearing, which could improve long-term market quality but create greater pressure on weak token launches.