Late stage degeneracy.
When I first got into crypto the investment narrative at least made logical sense, even though ultimately most new projects were failures. The reason for this was the concept of "utility". A utility token was something that presumably needed to exist so it could perform a critical function that was lacking within the industry. Of course if we look at the ICO craze of 2016 it's quite obvious most dev teams were greatly embellishing or outright lying about what their token could do, and that strategy hasn't changed over the last decade. The industry is littered with false advertising, over-marketing, and empty promises.
Defi 2020
In the last cycle most of the "utility" was relegated to yield farming and financial sorcery. Of course once again 99% of it turned out to simply be purposeful hyperinflationary nonsense that failed almost immediately. So much for sticking it to the man and showing the fiat world that anyone could make a better product.
Memecoin 2024
Are we seeing a pattern here? It's almost as if the entire landscape is completely devolving over time. Went from generic utility to DEFI utility to zero utility over the course of three cycles. Of course I haven't given up hope in the industry, but many of my theories about how this was gonna go down have been proven painfully wrong.
These days degens in the "trenches" are nothing but greedy PvP scalpers looking to make it big in the casino. They about utility anymore. They don't care about sustainability or circular economy. They want to put in the least effort and extract the most profit, and it doesn't matter who needs to be stepped on to achieve this goal. Every memecoin launched on Solana's pump.fun is explicitly not even a security by even the most stringent regulators because the expectation of a viable product "to be derived by others " is utterly nonexistent.
The house always wins.
Which is funny because it's never been easier to launch your own token and make yourself the house, and yet even that small amount of work is enough to deter most degens who simply want to gamble away their no-so hard-earned money. Easy come easy go.
So when is a token actually justified?
Well the most obvious answer to that is when a community comes together and decides they need a new form of consensus that doesn't exist. Unfortunately this is not how the world works yet. WEB3 still does not largely exist. The culture does not exist. Pretty much all projects are created by some centralized dev team with the hope that it will gain adoption, which is the main problem with all of this.
Token first community second utility third.
We are supposed to be designing open source technology over here, which means we should not be reinventing the wheel, and yet all the devs get constantly locked in to reinventing the wheel and issuing a new token simply because that's the only way they can think of to make money for themselves and justify the work in the first place. That's not really an open-source type of mindset to begin with so it's certainly something we could use a solution to.
Inflation rate
Most justifications for new forms of consensus are almost always going to revolve around the issuance of new tokens. Presumably the community in question needs to mint tokens out of thin air in order to subsidize certain behaviors. The most basic form of this is paying users who secure the network to continue securing the network. What's an open-source borderless network without security? A single attack could bring the entire thing down if there's no incentive to defend the attack. Bitcoin does this with mining. Hive does it with witnesses voted in like a republic. Ethereum does it with direct stake-weighted voting.
Conceivably there are an infinite number of reasons to print a token and issue it to valuable community members working hard to add more value to the network than they are extracting. But that gets very tricky because the second anyone can control issuance, corruption is bound to set in sooner or later as the powerful use their power to enrich themselves. That's just basic human nature at this point and we should accept it as fact. The "benevolent dictator" timeline is a one-in-a-million occurrence. This is why Bitcoin has been so successful; thus far the risks of inflation have never proven to be worth the reward. Bad "investments" are bad.
Within the context of gaming:
Most games, even blockchain games, do not need a native token. Why? Because they are all inherently centralized to begin with. Why create some random token on the blockchain when you can just issue in-game assets like "gold" inside the game itself? The "gold" in the game is already the currency. You don't need another currency on top of that. What's needed is a liquidity pool from "gold" to Bitcoin (or a native token that the game is built on like HBD).
Not a single entity in the entire world has even attempted to create an actually decentralized RPG on a blockchain, and for very good reason. That's a highly complex and potentially wastefully inefficient endeavor. Again maybe we are just "still early" and the tech simply just does not exist yet, but the current advantages and disadvantages of decentralization speak for themselves at this point. You only want as much decentralization as you absolutely need to mitigate corruption from seeping into the product. Any more than that is woefully inefficient and littered with diminishing returns.
Conclusion
Most new tokens that get minted, especially within this cycle, have been completely unjustified. Will the crypto community ever give up on chasing the shiny new thing and finally opt to lay down roots and build real sustainable value? Certainly some of them will, but the infinite greed monster will always be luring new people into the degen casino.