Babbitt Column | Stocks, Tokens, Who Are the Future Trends?

I. Equity and Tokens

The traditional financial field is the world of stocks and equity. Whether you are a listed company or an ordinary limited liability company, the division of power and benefits is in the form of stocks;

However, in the field of blockchain, which is basically a world of tokens, most projects only issue tokens and do not issue shares.

These are two very different routes. Basically, traditional enterprises and blockchain companies are divided into two worlds: equity takes the path of equity, and it takes the set of financing, listing, voting, and dividends; the token is completely Taking the path of tokens, going through exchanges, destroying, and repurchasing, it seems that at present, no company has heard of a company that has issued a token and has its own stock.

Second, choose stocks or tokens?

For example, companies such as Bitmain and Jianan Yunzhi have issued their own stocks, chose a traditional capital route, and have not issued a token;

For example, companies like Binance have issued tokens, have not issued their own stocks, and should not issue stocks in the future.

There are of course some reasons behind this situation, mainly because the current token is still in a vague area, and the structure of both the token and the stock is not allowed under the current law. Moreover, if the company has the opportunity to take the route of listing and capital operation in the future, the power of the two is not well divided, and the benefits are not well distributed. It is easy to plant the seeds of struggle.

For a simple example, if a company has both a token and a stock, then when the company makes money, it intends to use the profit to repurchase. At this time, is it a stock repurchase or a repurchase? If the repurchase token is repurchased, the stockholders will not be able to share the benefits. For the stockholders, this distribution is a net loss in cash; but if the stock is repurchased, the currency holder will have to Without any interest, it is easy to generate resistance. Coins and stocks are basically in an incompatible state.

Stocks and tokens are two completely different things, and the corresponding equity behind them is different. The stock actually corresponds to the distribution right of the company's residual income. What is called residual income? In other words, when the company makes money, the money must be paid first, the money of various borrowers must be paid first, the money of the supplier, the salary of the employees must be paid, and the assets to be expanded in the next few years to buy assets must be reserved If the rest of the money has a surplus, it will be distributed to shareholders in accordance with the policy. This is the equity that the stock can enjoy.

In other words, if the company is considered as a whole, the company's overall revenue is not shared by a group of shareholders, but shared by groups such as the national tax authority, suppliers, creditors, employees, shareholders, etc. After that, the remaining part will be owned by shareholders. Of course, it is precisely because the remaining part is owned by shareholders, so shareholders and management have more energy to do a good job of the company, more energy to expand profits and save expenses. In addition to dividends, stockholders also have an additional right to increase the value of their stocks. When dividends are relatively small, most of the stock's income comes from price fluctuations.

However, in the blockchain industry, what is a token and what rights and interests behind it are currently inconclusive in the theoretical world and are not specifically reflected in national laws and regulations. At present, it is generally believed that currency represents a right of use. For example, when you buy Ethereum to pay for gas costs, you actually buy a deduction right for handling fees, which is a right of use;

The different interests represented by stocks and tokens cause them to differ in many ways.

Third, the granularity of the stock is relatively large, the granularity of the token is relatively small

We may be accustomed to the thinking of stocks, thinking that stocks are a good way to measure, but in fact, stocks are very thick-lined, and are called more granular in computer jargon.

For example, stocks can only be used to measure the distribution of benefits. They can only quantify the "interest" level. They are much weaker in the quantified level of "decision making power." Equity wars and board wars often occur within the company. This is the reason why the interests of minority shareholders are often not guaranteed.

Moreover, in addition to the relationship of interests and power, there are many other relationships in real life. These relationships are not measurable by stocks and equity.

For example, a city is trying to implement the city points model. If you do good deeds, you will be given a few points. If you run a red light and do damage, you will be deducted a few points. Such points generally do not correspond to clear rights and interests. There may be some inclination in the selection of good citizens and hukou, but generally there is no clear interest relationship. Stocks are not useful at this time. What is needed at this time is a more subdivided, granular The lower the unit of quantification, this is when the token comes in handy.

In addition, there are many aspects, such as personal data realization, personal credit quantification, personal time value quantification, personal influence power, personal attention quantification, etc. These require some clear quantitative units, None of these stocks are up to the mark, and tokens are perfectly up to the mark.

What I want to express here is that if the stock represents equity, then the token actually represents a broader thing. We can use it as a quantified basic unit of valuation. Anything that needs to be quantified can be used. Proof, but not everything that needs to be quantified requires equity .

4. The stock corresponds to a closed organization and fewer stakeholders are covered; the token corresponds to an open organization and more stakeholders are covered

Generally speaking, the stakeholders of stocks are the national tax authorities, suppliers, creditors, employees, and shareholders mentioned above; but the coverage area of ​​tokens is much larger. At present, many blockchain companies, in addition to traditional In addition to these stakeholders, many new stakeholder roles have been added, such as users, currency holder conferences, nodes, free developers, foundations, etc. At present, many companies that issue tokens In a way, it has become an open organization.

Open organization means that there are no clear employees, no clear company concepts, and anyone can become a part of the company and the ecology. Everyone is contributing to the ecology in their own way. At this time, you cannot measure them with stocks. Benefits and contributions, and tokens can be well measured.

Just taking the shareholder group as an example, the traditional equity threshold is high. The average company has a limit of 200 shareholders before it is listed. To become a shareholder of a large company, you need to have a high social status and have enough It can also be said that the traditional equity model corresponds to a closed model. Although the number of holders of shares has increased after listing as a public company, they are basically around a few thousand people because of the need to hold shares There are also some procedures to open a stock account. These procedures are not difficult, but may also block a group of people.

In fact, it is also very easy to understand. After all, stocks are a matter of money, and fewer people are better.

However, the token corresponds to the right of use. The more people use it, the more dynamic the company is and the more value it can generate; after all, it's a matter of construction. Of course, the more people, the better.

From historical experience, each development of the company system corresponds to an order of magnitude increase in the number of stakeholders. From the earliest self-employed, to a partnership, to a limited liability company, to a later listed company, the size of the company has become larger and larger. As more and more beneficiaries become more and more open, more and more ordinary people can leave the company's management and directly participate in the company's income distribution.

If it is said that the company's stakeholders have been enlarged by an order of magnitude through the form of stocks, then the company's stakeholders can be expanded by an order of magnitude based on the original form. And quantitative change can cause qualitative change. When the number of IPO shareholders of the company exceeds 200, we call this company a listed company. It is very different from non-listed companies, such as the regular reporting system, such as being under the management of the Securities Regulatory Commission, such as being accountable to the public, and so on.

When the company's stakeholders continue to rise by an order of magnitude at the level of the listed company, more interesting things happen. At this time, the company is not just a listed company, but the entire underlying economic logic begins to be open.

Compatibility issues between stocks and tokens

An interesting question is whether stocks and tokens are compatible? That is, in a company that has both stocks and its own tokens, the two coexist in harmony. Although not now, is this possible in the future?

I personally think that maybe this is possible.

We mentioned earlier that the corresponding rights and interests behind tokens and stocks are not the same. If the rights and interests behind are well divided, the two may have the opportunity to coexist.

For example, for a company, the equity model is still behind, but he also issued his own token, which can be used as a point or a function to use a certain right. Pay a certain marketing fee to fix the exchange, of course, there can be other models, but this is probably the meaning. For the two to coexist, it depends on the top-level design of the company's management and a clear division of interests, on the other hand, it also depends on the determination of relevant national laws.

This teacher Meng Yan said very well:

After the blockchain is available, we can now cut it out again, that is, the contractual rights guaranteed by algorithms. This part of the contractual rights can be automatically executed without the need for anyone, a third party, or an authoritative organization. Part 1: Contractual rights that can be algorithmized are guaranteed by the blockchain; Part 2: Cannot be algorithmized and described in natural language, which can be foreseen in advance, still rely on traditional authoritative institutions, such as courts or arbitration agencies Guaranteed; Part 3: Due to the inherent incompleteness of the contract, many residual rights are bound to be left. This part of the rights is uniformly handed over to the holders of equity for control.

However, what is more likely to happen is that stocks and tokens will coexist for a long time in the future, but the final granularity will be higher, the quantification effect will be better, the flexibility will be stronger, and the liquidity token will be in a long time. The stock will gradually replace the stock , or the stock will also be transformed into a certain form of token, so as to realize the combination of the two.