## Why some protocols become exceptions rather than the rule: deep into the structure of success

In the altcoin market, there is a paradox: most projects inevitably lose value, while a few achieve sustainable growth. This is not a coincidence but a result of fundamental differences in rights and profits between equity owners and token holders.

### The dual nature of crypto companies: why it is doomed to conflict

The typical structure of an altcoin today combines two incompatible worlds:

**Corporate side** includes a legal company, founders-shareholders, venture investors on the board of directors, and the need for monetization. **Token side** promises owners income through the protocol, buyback/burn mechanisms, and governance.

These two streams of value always conflict:
- Shareholders direct profits to the company
- Token owners expect income from the protocol

Most teams choose the first option, as it satisfies venture sponsors. The predictable result is — the token slowly loses value to zero, regardless of external project success.

### Why Hyperliquid stands out: the fastest ascent in crypto

Hyperliquid (HYPE) demonstrates a single model that breaks this pattern. At the time of analysis, the token is trading at $23.82 with a 24-hour trading volume of $6.38M and a market cap flow of $5.68B.

In the shortest terms — this project has never raised venture funding through shares. There are no investor-controlled boards of directors. There is no pressure to channel economic value to a legal entity. Instead, all value, including the largest fees in the crypto industry (, is directed directly to the protocol.

This allowed the project to do what 99.9% of others cannot: achieve complete alignment of interests between founders and token owners.

) Legal reality: why tokens cannot be shares

US regulators have clearly defined the boundary. If a token provides:
- dividends
- ownership rights
- voting rights in the company
- legal rights to profits

...it will be classified as an unregistered security. The consequences are catastrophic: delisting from exchanges, mandatory KYC, global issuance bans.

The industry responded with an alternative model.

### Recipe for a successful protocol: 7 key ingredients

Today, the optimal structure involves:

1. **The company does not generate revenue** — all fees go to the protocol
2. **Token holders receive value through protocol mechanisms** — buyback, burning, staking rewards
3. **Founders are enriched through tokens, not dividends**
4. **No venture funding through shares**
5. **DAO makes economic decisions, not a company**
6. **Smart contracts automatically distribute value**
7. **Shares are transformed into a “cost center,” not profit**

This architecture allows a token to approach the functionality of a share without violating legislation. Hyperliquid is the strongest example of this approach.

### Even an ideal structure has vulnerabilities

As long as a legal company exists, a potential conflict of interest is inevitable. True conflict-free operation is only achieved in the final form ### like Bitcoin or Ethereum(:
- No legal company
- No shares
- Autonomous protocol operation
- DAO funds development
- Neutral infrastructure

This is difficult to achieve, but the most competitive projects are moving precisely in this direction.

) Mathematical verdict: which tokens will not be counted

If a project has even one of these attributes, it will inevitably face structural failure:
- Venture funding through shares
- Private token placement
- Unlock mechanisms for investors
- The company retains part of the revenue
- The token is used as a marketing tool

Instead, projects with these features have prospects:
- All value directed to the protocol
- Venture funding through shares avoided
- No unlocking for investors
- Interests of founders and owners align
- The company is economically neutral

Hyperliquid’s success is not a lucky coincidence but the result of clear design and maximum alignment.

### What will change the industry

Crypto capitalism is like life: people only change when they are no longer financed. Projects like MetaDAO and Street demonstrate new standards of tokenomics and make teams accountable for results.

Next time you consider a potential “100x token,” ask yourself: is its model similar to Hyperliquid, or is it just another project with a flawed structure doomed to slow disappearance?