Lambda Chi CapitalAlmost every argument about a token is really an argument about which category it belongs to. A meme coin judged as a utility token looks absurd; a utility token judged as a meme coin looks overpriced. Naming the category first is what makes the rest of the conversation coherent.
These categories are not official, they overlap, and projects move between them — sometimes deliberately, sometimes because the original claim stopped working.
1. Store of value
The claim. This asset holds purchasing power over long periods because its supply is credibly limited and nobody can change that.
Bitcoin is the only one making this claim at scale, and the claim rests on one property: the 21 million cap is enforced by a network with no one in charge of it. The argument is not that the technology is superior. It is that nobody can issue more, and that no committee can be persuaded to.
How the claim gets tested. Whether it holds value through a crisis it did not cause. Correlation with risk assets is the standing objection — an asset that falls when equities fall is behaving like a risk asset, whatever it is called.
What to watch. Supply schedule (deterministic), issuance rate over time, and behaviour during stress in other markets.
2. Smart contract platforms
The claim. This is infrastructure. The token is required to use the network, so demand for the network becomes demand for the token.
Ethereum, Solana, and their competitors. The token functions as the fee unit, and often as the security bond through staking.
The mechanism worth understanding. Fees create real demand only if fees are substantial and the token is genuinely required. When a network’s fees are fractions of a cent, fee demand is not a meaningful buyer.
What to watch. Fees actually paid, whether they are burned or paid to validators, and the emissions-versus-revenue balance. A platform issuing more in staking rewards than it earns in fees is being subsidised by its own supply.
3. Utility tokens
The claim. This token does something inside a specific application — pays for storage, access, bandwidth, compute.
The question that decides everything. Could the application work without the token? If a business could accept dollars for the same service, the token is a funding mechanism wearing a utility costume. That is not automatically bad, but it is a different asset than advertised, and it should be valued differently.
What to watch. Whether real usage requires holding the token or merely touching it. A token bought, spent and immediately sold by the recipient creates transaction volume, not holding demand.
4. Governance tokens
The claim. This token confers a vote over a protocol’s decisions and, sometimes, its treasury.
The honest reading. Governance value is real when the thing being governed controls meaningful cash flow or a large treasury. It is close to zero when turnout is minimal and a handful of large holders decide everything anyway — which describes most governance in practice.
What to watch. Treasury size per token, actual voter participation, and whether governance can direct revenue to holders or only to itself.
5. Stablecoins
The claim. One token equals one dollar, and you can always get the dollar.
The only question that matters is what backs it, and there are three broad answers:
- Fiat-backed — dollars and short-term treasuries in a bank. The risk is the custodian and the attestation: who holds it, who verified it, how recently.
- Crypto-backed — over-collateralised with volatile assets. The risk is a fast drawdown outrunning liquidations.
- Algorithmic — stability maintained by a mint-and-burn mechanism against another token the same project issues. This design has failed catastrophically and at scale, most famously in May 2022, and the failure mode is reflexive: the mechanism accelerates the collapse it was built to prevent.
What to watch. Attestation frequency and who performs it, redemption terms for ordinary holders, and behaviour of the peg during stress rather than during calm.
Stablecoins are also, increasingly, a macro story rather than a crypto one — large issuers now hold enough short-term treasuries to matter to the market they buy from, which is why sovereign debt and stablecoin issuance keep appearing in the same sentence.
6. Meme coins
The claim. There is no claim. That is the entire point, and pretending otherwise is the mistake.
A meme coin’s value is attention and nothing else. There is no cash flow, no utility argument, no supply narrative doing work. It is a coordination game about what other people will find funny and worth holding next week.
Why this deserves a straight description rather than a sneer. Meme coins have produced enormous returns and enormous losses, and treating them as an unserious category leads people to analyse them with tools that cannot apply. There is no fundamental analysis of a meme coin. There is attention, liquidity, and how concentrated the holders are.
What to watch. Holder concentration above all — a token where a few wallets hold most of the supply is one decision away from a very different price. Then liquidity depth, and whether attention is still growing or already peaked.
Why the category matters more than the metrics
Every number on the metrics page means something different depending on the category.
Revenue is decisive for a platform and irrelevant for a meme coin. Supply cap is the whole argument for a store of value and nearly meaningless for a stablecoin, which should have elastic supply by design. Governance participation matters for a governance token and not at all for Bitcoin.
The most common analytical error is applying one category’s tests to another’s asset — and the second most common is a project quietly changing category, usually from “utility” to “governance” to “community,” once the original claim stops being defensible.
When a project’s own description of itself moves, that is worth noticing. It is usually the earliest honest signal available.