Author: Paul Veradittakit, Partner at Pantera Capital
Compiled by: AididiaoJP, Foresight News
Key points
· Crypto company IPOs unlock tremendous value, despite challenges in market pricing.
· The token transparency framework aims to enhance market clarity and attract more institutional funds into the token market.
· Tokenization of stocks is reshaping financial markets, enhancing efficiency and expanding global capital access.
Mispriced crypto IPOs
Coinbase's performance since its IPO is a typical case that reveals the pricing dilemma of public markets regarding cutting-edge innovations in financial infrastructure. We witnessed COIN soar 52% from its opening price, briefly surpassing a $100 billion valuation, before deeply correcting with fluctuations in market sentiment and crypto cycles. Each market turn seems to reprice Coinbase with a new valuation framework, leaving long-term value investors and builders perplexed.
Circle IPO is another recent case: Despite strong demand for exposure to stablecoins, Circle made $1.7 billion less on its first day of trading, becoming one of the lowest-priced IPOs in decades. This is not only an exception in the crypto industry, but also a structural pricing challenge faced by a new generation of financial companies entering the public market.
The crypto industry needs a more adaptive price discovery mechanism, one that can bridge the gap between institutional demand and the true value of platforms during market cycle transitions.
New valuation framework
The crypto market still lacks a standardized disclosure system akin to S-1 filings. The mispricing of crypto IPOs demonstrates that when underwriters cannot map token economics to a GAAP checklist, they either overestimate due to hype or underestimate due to fear. To fill this gap, Pantera Capital's Cosmo Jiang partnered with Blockworks to launch the Token Transparency Report—containing 40 indicators to transform protocol opacity into IPO-level clarity. This framework requires founders:
· Calculate revenue based on actual entities.
· Disclose the ownership of labeled internal wallets.
· Submit quarterly token holder reports (covering treasury, cash flow, and KPIs).
· Disclose details of market maker or CEX partnerships, allowing investors to assess liquidity risks before listing.
Why can this system enhance valuation?
· Reducing discount rates: Clear circulation and unlocking data bring market pricing closer to intrinsic value.
· Expanding the buyer base: Institutional investors that were previously blocked by 'black box' protocols can now participate in certified projects.
· Regulatory alignment: The SEC's guidelines for crypto issuance released in April 2025 align closely with this framework, as most of the paperwork is completed when project applications are submitted, accelerating approval and narrowing the public-private valuation gap.
Ethereum's latest upgrade perfectly illustrates the differences between blockchain and traditional enterprises: each new block destroys a portion of ETH (similar to automatic stock buybacks), while providing stakers with a 3-5% yield (similar to stable dividends). The correct approach is to view 'supply minus the amount destroyed' as free cash flow, and the resulting valuation upon discounting should align with on-chain ecosystem valuation, rather than merely reflecting the balance sheet. However, scarcity is just the first step; on-chain activity tells the complete story: real-time data on stablecoin cross-wallet flows, bridging activities, DeFi collateral flows, etc., are the fundamental support for token prices.
A comprehensive valuation approach should be based on traditional cash flows, with on-chain revenue (staking yields minus transaction fees burned) as a core element for verification. Continuous attention to staking yield rates, real-time traffic metrics, and scenario analyses will keep valuation methods up to date, which is essential for attracting traditional funds.
Tokenization of stocks optimizes trading experience.
Pantera Capital supports the tokenization of real-world assets (RWA) through investments in Ondo Finance. Recently, we launched a $250 million fund in partnership with Ondo to promote the development of RWAs. With Robinhood announcing the tokenization of stocks, this field is maturing rapidly. Last week, Robinhood introduced tokenized stocks on its platform, highlighting the core contradictions of this new financial technology: permissionless finance vs. permissioned finance, and the future role of DeFi.
Permissionless tokenized stocks allow anyone to trade on a public blockchain at any time, opening up the U.S. capital markets to global investors, but they may also become breeding grounds for insider trading and manipulation. The KYC-based permission model, while maintaining market fairness, limits the core advantage of global access for tokenized stocks.
We believe tokenized stocks will reshape DeFi. The mission of DeFi is to build open, programmable financial primitives, but it has primarily served crypto-native tokens until now. The introduction of tokenized stocks unlocks entirely new use cases. The structure of tokenized stocks will determine the next wave of user and liquidity allocation:
· In permissioned models, traditional institutions like Robinhood that have user relationships dominate the frontend, while DeFi protocols can only compete for liquidity on the backend.
· In a permissionless model, DeFi protocols can simultaneously control users and liquidity, creating a truly open global market.
Hyperliquid's HIP-3 upgrade perfectly illustrates this vision: through staking protocol token allocation of oracles, leverage, and funding parameters, anyone can create a perpetual contract market for tokenized stocks. Robinhood and Coinbase have launched stock perpetual contracts in the EU, but their model remains more closed and less composable compared to DeFi. If it stays on an open track, DeFi will become the default venue for programmable borderless financial engineering.
Bitcoin's market capitalization surpasses Google's.
By 2025, Bitcoin will leap to become the fifth largest asset globally with a market capitalization of $21.28 trillion, surpassing Google. Driven by institutional adoption, the approval of spot Bitcoin ETFs, and clear regulation, Bitcoin has broken past $106,000. This milestone event proves that programmable currency has found a clear product-market fit.
Looking ahead
As Dan Morehead said, investing in cryptocurrencies offers returns unparalleled by traditional markets. This is precisely why traditional public markets and the crypto domain are accelerating their financial and structural integration:
· Digital asset treasuries and crypto IPOs provide public markets with exposure to crypto finance.
· Stablecoins and tokenization utilize cryptographic technology to optimize traditional market structures.
In ten years, crypto will no longer be a niche market discussed by tech enthusiasts, but will become a core technology supporting everyday life.
