A popular trend kicked off by the Compound Protocol in the Spring of 2020 was governance tokens for DeFi protocols. The dream of governance tokens was a beautiful ideal. Simply by using a protocol, you would automatically and freely receive ownership of it. Decision making around the protocol would be decentralized allowing thousands and ultimately millions to have their say and vote on changes to the protocol.

If the traditional revenue and expense business model does not apply to protocols how should we think about growing protocols and the role of tokens?

In 2013 @VitalikButerin loved Bitcoin. However, Bitcoin was limited because you couldn't build arbitrary programs on top of it. He created Ethereum to take trustless execution of Bitcoin generalize it to arbitrary apps.

A few weeks ago, a small corner of the internet erupted in response to an interview published in New York Magazine. The interviewee, Gary Gensler, claimed that all crypto assets fall under the category of "securities" (a United States legal classification), with the exception of Bitcoin.

The Optimism collective is distributing 10 million OP tokens (currently valued at $25 million) in the largest ever retroactive public goods funding experiment!

Today we know Venice as a tourist destination but 500 years ago it was a trading empire. The Republic of Venice specialized in seafaring trade. Their boats sailed the world, securely moving goods from cities like Acre, Alexandria, Constantinople and back to Venice and other Adriatic ports. 

Crypto protocols are a revolutionary new way to provide services. They are also deeply misunderstood.