When fiat holding periods drop to just seconds, what kind of crypto assets can still survive the next cycle?

Author: donn (Tze Donn Ng, Investor at Brevan Howard Digital)

Compiled by: TechFlow

TechFlow Guide: As token-generating factories like Pump.fun push the production and dumping processes to extreme industrialization, with retail holding periods shrinking to “seconds,” the crypto industry is undergoing a brutal cognitive clearance: creating tokens has become extremely cheap, but building a long-lived asset worth holding for more than a year has grown increasingly difficult.

In a deeply insightful long-form article, investor Tze Donn Ng (@tzedonn) from the renowned hedge fund Brevan Howard Digital (BH Digital) proposes the “Dual-Peak Model of Crypto’s Endgame” to pierce through market fog. He points out that tokens capable of crossing cycles to accumulate genuine demand actually follow two distinctly different yet highly clear climbing paths: on the left are pure “faith assets” built on spiritual leaders, near-death rebirths, and fanatical communities; on the right are “cash flow assets” featuring on-chain verifiable real profits, free from equity dilution, and implementing mandatory buybacks and dividends.

In this article, the author not only dissects BTC, ZEC, HYPE, PUMP, LIT, and SKY with surgical precision, but also sharply questions numerous projects using “investing in growth” as an excuse to delay dividends, while offering forward-looking projections for US stock RWAs, on-chain casinos, and next-generation perpetual DEX tokens. TechFlow has compiled the full text in depth to provide investors seeking true alpha in secondary markets with a highly penetrating framework guide.

The token launch game in crypto has been thoroughly solved. Pump.fun-style pump-and-dump factories have achieved high automation, where every token launch is front-run and bundled by bots, and KOLs driven by FOMO have already perfected the art of secret dumping through proxy wallets. The average holding period for tokens now measures merely in seconds.

While the entire industry has become extremely efficient at manufacturing new tokens, creating an asset with lasting vitality that warrants investors holding it for over a year has become more difficult than ever.

When considering how tokens can forge enduring, genuine demand, I find it highly effective to approach the problem through two distinct core dimensions: first, the strength of the faith supporting the asset; and second, whether the accumulation of economic value flowing to token holders is genuinely reliable.

Faith Assets: Consensus Religions Beyond Cash Flow

Faith assets refer to those without any underlying cash flow, whose value derives entirely from collective shared belief. Their valuation stands solely on whether others firmly believe they hold value.

As a rational investor who does not blindly subscribe to Bitcoin dogma, I bought BTC simply because I believe enough people harbor an unshakable conviction in it.

So, what precisely separates ephemeral, short-lived memes like WIF or BONK from super memes like BTC, which possess eternal durability?

Looking back at history, enduring faith assets that have crossed cycles generally share five highly overlapping hallmark characteristics:

First, possessing a sacred spiritual totem and a god-tier leader.For faith assets, there must be a transcendent spiritual leader. BTC has Satoshi, ETH has Vitalik, SOL has Anatoly debating Ethereum minimalists fiercely on Twitter daily, and HYPE has Jeff. The leading figure of a faith asset must embody a surreal sense of grandeur; whenever the token is mentioned, that name must instantly surface in your mind reflexively.

Second, surviving near-death moments and rising from ashes.BTC survived the catastrophic collapse of the Mt. Gox hack, ETH survived the The DAO split and reconstruction, and SOL was once trapped in the ruins of the collapsing FTX empire, yet all miraculously survived against the odds. HYPE faced the JellyJelly attack, with its price briefly crashing to single digits while the entire market questioned if it would completely dissipate. Surviving tests from the brink of death filters out all speculators, leaving only the most fanatical die-hard believers, thereby forging your most core and hardcore consensus foundation.

Third, enabling early believers to achieve immense wealth.Price appreciation is the best business development (Number go up is the best BD), and those you guided toward financial freedom naturally evolve into your most fervent evangelists. BTC delivered 200x returns to early participants between 2013 and 2018, ETH achieved a 40x surge from 2020 to 2022, and SOL similarly scripted a hundredfold legend. HYPE grew 30x while maintaining ample liquidity volume, distributing extremely lucrative large airdrops to early believers.

Fourth, building a fanatical community with exclusive symbols and unique subcultural memes.Even with tangible wealth incentives, you still need memes capable of viral mutation. You need insider jargon that resonates within the community, fostering a sense of belonging to an exclusive elite club; you need blind devotion driven by a grander vision. BTC has “laser eyes,” ETH owns the “.eth” domain, SOL sports the “◎” and “.sol,” while HYPE boasts that active, even slightly provocative, cadre of “.hl” supporters.

Fifth, a minimalist, heart-striking one-sentence slogan.Propagating a digital religion requires an extremely condensed rallying cry. BTC’s slogan is “digital gold”; ETH’s banner is “world computer”; SOL was once dubbed the “Ethereum killer” or “decentralized Nasdaq”; and HYPE positions itself as the “house of all finance.”

In the recent market, ZEC (Big Zero) somewhat approaches the aforementioned criteria: it survived a life-or-death trial from a critical shielded pool exploit; its price skyrocketed from $40 to $1,200 within a single year; and it carries highly distinctive narrative banners such as “the privacy coin version of Bitcoin” and “the soon-to-arrive quantum-resistant Bitcoin.”

These traits can never be artificially fabricated through industrial means. You cannot awkwardly unilaterally declare something a religion simply because you founded a community. Within this niche, I personally focus on PRL (the so-called “AI Bitcoin”), treating it as an early asymmetric bet to observe whether it can gradually accumulate these features over time.

However, scaling the peak of durable tokens actually offers another, far more straightforward path.

Cash Flow Assets: Verifiable Real Economic Surplus

In the crypto world, assets capable of generating genuine positive cash flow are extremely rare. There are primarily two reasons for this:

First, selling tokens and grand narratives to the market to secure exit liquidity is vastly easier than painstakingly building a real-world business with positive Free Cash Flow (FCF);

Second, if a team truly operates a cash-cow machine running day and night, fully self-funding without needing external expansion capital, then choosing not to issue tokens and simply funneling all net profits directly into private pockets eliminates endless compliance and governance headaches.

Teams with exceptionally high profit margins, such as DexScreener, Axiom, and Trojan, have long happily claimed 100% of their commercial profits for themselves. The entire industry tacitly accepted this unspoken rule until Hyperliquid’s emergence shattered the deadlock.

Hyperliquid proved to the market with irrefutable facts: you can build a commercial empire with exceptionally robust cash flow, continuously empowering the token with value, and the resulting market cap leverage and ecological outcomes will far surpass the fate of greedily stuffing short-term profits into your own pocket.

When screening this category of assets, the core inquiry must revolve around five key questions:

One, Economic Foundation: Is there persistent economic surplus and commercial profit?HYPE and PUMP are prime examples in this dimension, consistently generating $1 million to $2 million in hard cash profit daily throughout the year. Perpetual contract DEX revenues tend to be more sustainable with smaller cyclical fluctuations, especially after integrating perpetual contracts on US equities and other RWAs. While the revenue longevity of token launchpads is often questioned—and the market was previously correct in judging that platforms like PONS, STONK, and GP would see unsustainable income—PUMP continues to systematically disprove this stereotype.

Two, Data Transparency: Can this economic surplus be transparently verified on-chain?The purest and most flawless revenue occurs entirely on-chain, such as HYPE and PUMP, which require minimal trust costs. Conversely, projects like GRASS generate their revenue entirely off-chain (through private commercial contracts with top AI labs), leading the market to inevitably question the authenticity of these earnings, although I am certain they genuinely exist.

Three, Token vs. Equity Rights: Does the economic surplus empower the token or get siphoned off by an equity company?Is there a traditional equity entity quietly draining value behind the scenes? This has sparked extensive debate recently: Venice just completed funding via equity while distributing tokens to the community for free; GRASS also had to hastily convene a communication meeting to clarify that all commercial value belongs to token holders.

The quintessential negative example is SHFL: while it indeed operates a highly profitable gambling business, all hard cash flows to a traditional equity company registered in Curaçao (which just distributed a staggering $18 million in cash dividends), leaving secondary market token holders with nothing but a negligible lottery ticket.

Four, Value Capture Mechanism: Is value directly accrued to the token through buybacks or dividends?This is self-evident, but automated buybacks and dividends enforced by smart contracts (such as HYPE, LIT, and SKY) far surpass discretionary buybacks relying entirely on team discretion (like PUMP) in terms of transparency and certainty.

Five, Trust and Growth Generations: If dividends are deferred to invest in business growth, is the team truly trustworthy?This model closely mirrors traditional venture capital. Tokens like GRASS, ENA, CHIP, and CARDS occupy this quadrant. They explicitly state that all commercial value ultimately belongs to the token, but are currently reinvesting profits aggressively into scaling operations.

This relies heavily on moral trust in the project’s team, as token holders lack legal protection umbrellas and often lack even board structures and audited financial statements. For this reason, frameworks like Blockworks’ Token Transparency Framework (TTF) appear exceptionally vital.

Too prematurely demanding that an early-stage startup distribute all profits completely would undoubtedly stifle its long-term growth ceiling. Yet token holders preferring immediate, certain cash dividends is equally understandable. If holders cannot verify how retained earnings ultimately benefit them, the so-called “investing in growth” effectively demands that investors simultaneously bet on the team’s operational capabilities and future ethics. Automated buybacks have resolved this massive uncertainty today, and I highly applaud CHIP’s recent proactive improvements in clarifying its token value accrual logic.

In the current market, HYPE, LIT, PUMP, and SKY are the only golden samples that perfectly satisfy all five stringent criteria simultaneously. New tokens that can check off all five items are exceedingly rare.

PAPER was once one of the most excellent attempts recently; it originally possessed the full potential to generate massive revenue, but regrettably, the team ultimately abandoned the token because its mechanism design inadvertently spawned arbitrage vulnerabilities that malicious actors could exploit against exchanges.

I believe the cash flow token sector is undergoing a transformative leap on the eve of an explosion. HYPE pioneered the paradigm of high-value accrual tokens, while PAPER let everyone glimpse the immense allure of this architecture. Just imagine the shocking valuation momentum that would be unleashed if a high-cash-flow operation like Polymarket, raking in roughly $20 million in monthly profits, officially issues a token and fully sinks all profits into it.

In fact, the Shuffle team has recently been internally exploring launching a purely on-chain decentralized casino. If such a system truly lands and allocates 90% of its gambling net proceeds daily to automatically buy back tokens on the open market, SHFL would instantly leap to the very top of this evaluation list. Buying projects at the bottom of the list is fundamentally betting that their teams will radically reform their ways in the future and proactively advance toward the upper-right quadrant.

Looking ahead, I am closely monitoring the arrival of next-generation perpetual DEX tokens, such as VAR (Variational) and XTEN (Extended). Other high-quality trade targets worthy of continuous tracking include ARCUS, ENTROPY, and the potentially future-tokenized POLYMARKET.

The Crypto Endgame: Two Great Mountains and the Terminal Evolution of Tokens

Across the lengthy history of crypto development, to become a durable hard currency capable of weathering multiple bull-bear cycles, there are ultimately only two narrow pathways to the summit:

BTC, ZEC, and early HYPE chose to ascend the “Mountain of Faith” on the left; whereas HYPE, LIT, and PUMP are steadily marching toward the peak along the “Mountain of Cash Flow” on the right.

Surveying all digital assets, HYPE is undoubtedly the most comfortable holding experience, as it simultaneously serves as a high-certainty cash flow asset while demonstrating enormous potential to evolve into a durable faith asset.

In contrast, the vast majority of other tokens, despite attempting to scale heights time and again, ultimately inevitably plunge into the abyss. This includes newly launched Layer 1 chain tokens that have long devolved into oversaturated zero-sum games, as well as archaic “legacy” DeFi tokens lacking genuine protocol revenue and utterly unable to return value to holders.

Many purely concept-driven narrative speculatives (such as various shallow AI concept coins) repeatedly attempt to charge up the left-hand Mountain of Faith, but under the cold pull of gravity and the laws of time, they ultimately only end up crashing heavily back into the valley floor.