Why Most Web3 Projects Don’t Need a Token

In Web3, launching a project often comes with an assumption:

👉 it needs a token

Tokens are seen as:

• a core component
• a growth mechanism
• a funding tool

But in many cases, they’re none of those things.

They’re unnecessary.

How Tokens Became the Default

In early crypto:

• tokens enabled networks
• incentivized participation
• secured systems

This made sense.

But over time, the model expanded.

Now, tokens are added to:

• apps
• platforms
• products

Even when they don’t serve a clear purpose.

The Misalignment Problem

A token introduces its own system:

• supply
• demand
• incentives
• market dynamics

If that system isn’t aligned with the product:

👉 it creates friction

Instead of value.

What a Token Is Supposed to Do

At its best, a token should:

• secure a network
• coordinate participants
• align incentives

Without one of these functions:

👉 the token becomes cosmetic

When a Token Becomes a Distraction

Many projects focus more on:

• token price
• liquidity
• market attention

Than on:

• product quality
• user experience
• real adoption

This shifts the focus from:

👉 building something useful

To:

👉 maintaining a market

When speculation is removed, the necessity of a token becomes much clearer.

The Liquidity Trap

Once a token exists, it requires:

• attention
• trading activity
• ongoing interest

Which means:

👉 the project must continuously feed the market

Instead of focusing purely on the product.

Why Some Products Work Better Without Tokens

Many successful products don’t need tokens because:

• value comes from usage
• not speculation
• not financial incentives

In these cases, adding a token:

👉 complicates the system

Without improving it.

The Cost of Introducing a Token

A token adds:

• regulatory complexity
• technical overhead
• user confusion

It also introduces:

• volatility
• expectation of profit
• external pressure

User Experience Gets Worse

For users, tokens often mean:

• additional steps
• extra decisions
• financial risk

Instead of:

👉 a simple product experience

The Incentive Problem

Tokens are often used to drive behavior.

But incentives can distort usage.

People may:

• use the product for rewards
• not for value

Which leads to:

👉 artificial activity

The Difference Between Infrastructure and Products

Tokens make sense at the infrastructure level:

• blockchains
• protocols
• coordination layers

They make less sense at the product level:

• apps
• tools
• services

Where usability matters more than incentives.

Why the Industry Defaults to Tokens

Because tokens offer:

• funding
• visibility
• rapid growth

They attract:

• attention
• capital
• participation

Even if the underlying product isn’t ready.

What Actually Drives Long-Term Value

Sustainable products are built on:

• usability
• adoption
• consistency

Not on:

• speculation
• token performance
• short-term hype

Long-term value comes from usage — not financial incentives alone.

The Future: Fewer Tokens, Better Products

As Web3 matures:

• unnecessary tokens will disappear
• useful ones will remain
• products will prioritize experience

WTF does it all mean?

Tokens are powerful.

But they’re not required.

Adding a token doesn’t make a product better.

In many cases:

👉 it makes it worse

The projects that succeed long-term
won’t be the ones with the most tokens.

They’ll be the ones that:

👉 don’t need them

Part of the Web3 Reality Series

This article is part of a series exploring how Web3 actually works in practice.

👉 Explore the full series:
https://jasonansell.ca/web3-reality-what-decentralization-actually-looks-like/