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Code of Value: Categorizing and Evaluating Digital Assets

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Allan Matheson

Jul 18, 2025

“Crypto isn’t backed by anything.”

This is a common refrain from many that find blockchain technology confusing and purely speculative. However, obfuscated by the myriad issues that have plagued the industry is a technology which will inevitably disrupt some of our largest industries.

Blockchains have key superpowers including internet native transfer of value and the ability to trustlessly launch smart contracts. Although both of these do draw their fair share of bad actors, that should not distract from the immense power of the underlying technology. Just as the internet escaped its early perception as a medium for an abundance of scams and pornography, crypto is now being recognized by the world’s largest institutions as a significant technological infrastructure building block. But do digital assets themselves have value?


In order to properly understand the potential power of the technology and assess the value of digital assets, let’s begin by looking at the universe of tokens and trying to ascribe categories to the myriad of digital assets that exist so it is easier to decide what has value and what does not.


The adoption of blockchain technology is a once in a generation opportunity to see a new asset class emerge. Read more in our article on the Monetization of Code.

Blockchain Coins

At the core of the technology are blockchains that have tokenized ecosystems, including Bitcoin, Ethereum and Solana to name a few. These are coins that help secure and transact on their specific blockchains and are usually known as level one (L1) blockchain coins. Do they have value?

First, we need to carve out Bitcoin as it is a unique asset. Although it has many of the qualities of other blockchain coins, it is unique in its simplicity. Bitcoin is scarce (there will only ever be 21 million) and its proof of work system of mining makes it unique. Since it has been around for the longest and has earned the trust of investors through its simplicity, it has taken a lead in mindshare and accessibility. We are lucky to be watching Bitcoin being considered as the first new macro store of value asset in our lifetimes.


As opposed to Bitcoin which cannot natively execute smart contracts, other blockchains are almost all smart contract blockchains, meaning that developers can deploy if/then code to their chains at will. Ethereum for instance, has more than 1 million validators in every nook and cranny of the world that keep the chain producing blocks every single 12 seconds. It has had 100% uptime since inception. Each of these nodes must use 32 Ether to secure their node and if they act maliciously, part or all the 32 Ether could be at risk. In order to meaningfully attack the chain, for instance by stealing a digital asset, a perpetrator would require anywhere from 33% to 66%[1] of the validators to be malicious. Economically this would be almost impossible as it would require acquiring tens of millions of Ether (currently about USD3400 per Ether) and using them to stake in validators. This is where the chain gets its security and why builders choose to build their smart contract applications on the chain. For instance, BlackRock has issued a tokenized money market fund on the Ethereum blockchain.


As a result of its technological design, security, transparency, permissionlessness (we will put the last two characteristics aside for now) builders like Blackrock choose Ethereum to build on. So the Ether token is used to both secure the network through staking and is used in order to pay for transactions to interact with applications built upon it. Thusly, so long as the chain is active and builders create new applications on the network, the Ether token has tremendous value. Conversely, for blockchains that are unused, ghost-towns with no users and no applications with product-market-fit, there is exceedingly little value to be found in the coins. Understanding the vision of the chain, the strength of the community of its builders, and what purpose it is likely to fulfill in the future is the best way to judge whether these chains and their coins have value.


Examples of Blockchain Coins include Bitcoin, Ethereum, Solana, Polygon, BSC, Sui, Aptos, Avalanche, Arbitrum (Ethereum L2), Optimism (Ethereum L2) and many more.


Application Tokens

Application tokens are typically used to govern and thereby, either directly or indirectly have a call on the fees generated by an application that is built upon one of the blockchains noted above. Let’s take Aave, the most prominent borrowing and lending application as an example. Aave developers launched the Aave protocol on Ethereum. People used it to lock digital assets (like the above-mentioned Ether coin) to use as collateral to borrow against. This design allows for a basic function of all financial markets, codified borrowing and lending. The contract charges a fee to users.


After launching the protocol, the developers launched the Aave token, kept some for themselves, gave some to the community of users, and left some in the treasury to be governed by token holders. Thereafter, if you hold the token, you have the right to vote on protocol governance. In other words, if you hold enough of the token, you can influence strategy, fee arrangements, spending and other critical functions of management of the ecosystem.


Do application tokens have value? Yes, if the code is generating revenue and the token may directly or indirectly have a call on that revenue. However, if the application is not used or the tokenomic design is poor, value can be severely impaired or non-existent.


RWA Tokens

Real World Asset tokens is a broad category that we will use to define tokens that represent an asset that exists off-chain, ie. a deed, or tokenized asset. Examples would be stablecoins (can be redeemed for some currency, usually USD), tokenized money market funds like the aforementioned Blackrock BUIDL token, tokenized real estate markets (for instance Parcl which attempts to link the value of tokens to specific municipal real estate markets). In order to further simplify this article, we can also include NFTs as tokenized real-world assets. In the previous NFT craze, the item being tokenized was art with specific characteristics built into each token. However, in future, NFTs will be used to tokenize far more important unique assets such as properties, car titles, and estates. For example, the California Department of Motor Vehicles recently launched 42 million car titles on the Avalanche chain. NFTs are best contextualized as digital deeds.


Do these RWA tokens have value? Some of them most certainly do. For instance, the USDC token issued by Circle, an American company, can be redeemed for one USD. Others, such as NFTs that represent one of 10,000 other pictures that nobody wants, are virtually worthless. Again, the distinction in value is very much dictated by the backing and desirability of its underlying asset.


Memecoins

As a result of the fact that blockchains are permissionless, anyone with an internet connection can interact with them and therefore anyone with a modicum of technological understanding can create a token. As such, one can create a token and make it available at an extremely low barrier to entry. On Solana, the center of the memecoin craze, hundreds of thousands of tokens have been deployed every month since late 2023[2]. Tokens are created daily in the hope that they might bind together communities of speculators who will drive the price up. Typically, in their current form, they revolve around specific popular memes, hoping to capitalize on the attention economy. They are explicitly pure speculation and the desire to create community. Almost all trend to zero and most of the community of builders view them as net negative towards the technology. However, given that the whole purpose of blockchains is that they are permissionless, the technology can be equally applied to applications that some may deem ignoble. There is a small subset that has created engaged communities based on the memes they represent and the wealth they have created for members of those communities.


The truth is that many digital assets combine several of the above categories. Aave, for instance, has an Aave token to govern the protocol and also issues Gho, a stablecoin which can be minted against assets secured by the protocol. Likewise, some of the most popular NFTs which are an RWA deed for an image, have issued their own memecoins and have formed strong communities.


So, do these tokens have value? Just as in any other sector, the matter of value is dictated by their success in achieving their objectives. The Aave protocol has found tremendous product market fit. More than $45B of liquidity has been supplied on the protocol[3] (the size of a medium sized bank in the USA), and it generates annualized $588m in fees[4]. On the other hand, some NFT projects have no demand and no community whatsoever.


Perhaps one way to understand the value of these tokens is to contemplate future use cases of each of these categories as follows:

 

What could these technologies be used for?

Critical success factors

Blockchain coins

Blockchains are the foundational building blocks upon which applications will be created to disrupt the payments, finance, social media, cloud, AI, speculation, gaming industries and many more.

Blockchains sell blocks. Large volumes of data/transactions flowing through blocks are a critical marker. The strength, capability and veracity of the community of builders will be a good determinant in future demand for blockspace.

Application tokens

Applications will be constructed that disrupt the above industries. Some of these ecosystems will employ tokenomic models that allow for governance, game theory and speculation to co-exist and play off one another.

Think of applications as any other Web2.0 business. If there is product market fit with actual paying customers, they will flourish. If the tokenomics are also good for the project and not extractive, the token should have value. In good design, holding the token provides governance rights and a revenue call on the underlying code.

RWA tokens

RWA tokenization will likely help replace some plumbing of the current, traditional financial system. The tokenization of equities, real estate and more will enable more global liquidity and composability across asset classes.

RWA tokens will take time to earn the trust of users that the digital certificate that they own is truly a call on the underlyiung asset and that should the judicial system need to be relied upon, that the RWA token has all the same benefits as a more traditional approach to ownership. Liquid markets for RWAs, along with composable capabilities that introduce new functions will be required for more broad adoption.

Memecoins

Memecoin afficionados argue that they can play a huge role in the attention economy. As memes and celebrity intermingle with speculation, new applications will emerge.

This is likely to remain the most volatile type of token with vastly different outcomes and relatively ephemeral fads developing and subsequently dying off. The most successful will likely be systems of memecoins that combine social/celebrity with the underlying community speculative nature of the token type.

 

A Regulatory Refrain

All of these assets are unique and the tokenomics, business and governance models are still being piloted. This is why digital assets have largely been misconstrued as being completely unregulated. However, within the next 6-12 months, many of the world’s largest economies will roll out legislation explicitly regulating these assets and ecosystems. As that happens, especially within the USA which has gone from being completely antagonistic towards the industry to the US Congress declaring the week of July 14th 2025 “Crypto Week”, more clarity may be achieved in determining which digital assets are valuable, and which are problematic or purely speculative. As institutions move to adopt the technology, more than 60% of Fortune 500 companies have built blockchain initiatives,


Blockchain technology is still in its infancy. Understanding what it is and how it works is the largest determinant in deciding if it has value. While some assets represent ownership of a technology with no value, no revenue generation, no attention and no use, others are the building blocks of tomorrow’s technological infrastructure and represent the birth of a new asset class, the monetization of code. Understanding which assets have value and how they will develop is perhaps one of the most exciting technological and investing frontiers of our generation.

Sources:

[1] https://ethereum.org/en/developers/docs/consensus-mechanisms/pos/attack-and-defense/ 

[2] https://dune.com/queries/3305099/5535224 

[3] Aave.com

[4] https://defillama.com/protocol/aave


Disclaimer:

This article is for general informational purposes only. Any commentary and information contained in this article should not be considered as financial or investment advice, and is not intended to provide legal, accounting, or tax advice. This article may contain the opinions, views or recommendations of individuals or organizations. These opinions and views are provided for your general interest only and are not endorsed by Golden Pear Capital Ltd., Golden Pear Digital (BVI) Ltd. or affiliates, from hereon, referred to as "Golden Pear".  Every effort has been made to ensure that the material contained in this article is accurate at the time of publication. However, Golden Pear cannot guarantee its accuracy or completeness and accepts no responsibility for any loss arising from any use of or reliance on the information contained herein. Facts and data provided by Golden Pear and other sources are believed to be reliable when posted. Golden Pear cannot guarantee that they are accurate or complete or that they will be current at all times. Any information, including performance data available through any third party provider is not guaranteed to be current, accurate or complete and is subject to change without notice. Performance data represents past performance and is not indicative of future performance. There may be inherent conflicts of interest included in the article as a result of the Golden Pear involvement in the digital asset industry.

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