Author: Liu Honglin

Many years ago, there was an unspoken "initiation ceremony" for blockchain projects—first, register a foundation in some offshore location, write "non-profit," "open source," and "transparent" in the white paper, and repeatedly emphasize "community governance" and "distributed autonomy" during roadshows. With a foundation backing, it seemed legitimate. However, after a decade, you will find a more interesting and realistic trend: foundations are no longer the "orthodox posture," and project teams are actively embracing corporate structures, even directly incorporating tokens into the financial statements of publicly listed companies.

Whether it is Conflux injecting core assets through the Hong Kong-listed company Pioneer Pharma, Tron merging with the small-cap Nasdaq company SRM Entertainment and renaming it "Tron Inc.," or Sui promoting the allocation of a massive amount of SUI tokens for treasury management in a U.S. public company, Web3 projects have shifted their momentum, leveraging traditional capital markets to complete a new method of valuation realization. And in this trend of "shifting from ideals to transactions," Nasdaq's proactive application to the SEC for the listing of tokenized stocks has handed the entire industry the final "compliance key," preparing to open the last slightly ajar door between "crypto assets" and "mainstream finance."

The Shell of Ideals Has Been Replaced by the Shell of Capital Markets

On July 28 this year, U.S. company Mill City Ventures III announced the completion of a $450 million private placement, clearly stating that a significant portion of the raised funds would be allocated to SUI tokens, transforming into a "SUI treasury strategy." On August 25, the company further announced its name change to "SUI Group Holdings" and changed its trading code to SUIG; on September 2, they disclosed holding 101.8 million SUI tokens (approximately $332 million based on the day's price). This is an extremely clear path: putting "tokens" into the "public company" framework, using annual reports, audits, and shareholder meetings to carry the responsibilities and assets that were originally under the foundation's name but were unclear. Notably, this is no longer the narrative of "the Sui Foundation acquiring a listed shell," but rather a public company actively turning to align its brand and asset structure with the SUI ecosystem—this path design is completely different from the earlier "foundation universal key."

At the beginning of September, the Conflux Foundation initiated a governance proposal to authorize its ecological fund to engage in treasury/financial cooperation with "public companies," proposing constraints such as a lock-up period of no less than four years. This is not a news gimmick of "who acquires whom," but rather openly writing "dealing with public companies" into the governance process, indicating a gradual migration of token management, funding arrangements, and ecological support into a framework more understood and accepted by traditional finance. The areas where the foundation's approach was "vague" in fundraising, compliance, custody, and reputation endorsement have found a more robust vehicle.

And on September 8, Nasdaq took a more critical step. Nasdaq proactively submitted an application to the U.S. Securities and Exchange Commission (SEC), clearly seeking approval to list tokenized stocks. The significance of this step goes far beyond "adding a new trading category to the exchange"; once the SEC ultimately approves it, the thousands of existing listed companies on Nasdaq could theoretically complete the tokenization of each share in a short time, achieving a seamless on-chain transition. This would mark the first formal acceptance of blockchain underlying technology by the U.S. national market system, representing a breakthrough at the institutional level that truly bridges the barriers between Wall Street's traditional financial system and the crypto world, moving towards deep integration. Behind this, stablecoins have become the optimal settlement medium, with demand expected to explode, reserving liquidity for the implementation of tokenized stocks. Moreover, STO (Security Token Offering) exchanges, which were previously testing the waters on the compliance edge, will no longer be limited to niche assets but can instead accommodate the compliance demands spilling over from Wall Street, potentially becoming a "core hub" connecting traditional securities and crypto assets.

Returning to the Underlying Logic: Why Are Foundations Retreating?

First, the structural conflict between profit and non-profit.

Foundations wear the cloak of "non-profit," but the vast majority of project teams are entrepreneurs, not institutions writing academic papers. The essence of entrepreneurship is to create cash flow, to incentivize, and to retain talent. However, foundations are inherently unsuitable for equity/option incentives and do not facilitate the transparent attribution of the benefits from "token appreciation" to individuals or operating entities. Thus, they find themselves in a contradictory situation, nominally a "public welfare organization," but in practice "covertly commercialized," while also needing to "time the market" for "timely sales" to maintain operations. The later it gets, the more difficult it becomes.

Taking the Ethereum Foundation (EF) as a reference, the financial report released in 2024 shows that EF's inventory assets are approximately $970 million, of which $789 million are crypto assets, mostly in ETH; compared to the $1.6 billion disclosed in 2022, it has shrunk by about 39% over two years (a result of market fluctuations and expenditures). This does not indicate that EF is "in trouble," but it reminds us that the foundation's finances do not equate to the commercial capabilities of the ecosystem, nor do they mean that the commercialization and compliance of a blockchain can be placed within a framework that can be monitored and understood. In reality, the expansion of the Ethereum ecosystem is driven by a number of corporate teams: L2 projects, infrastructure developers, development tool and service providers, and compliance service providers doing KYC, rather than the foundation itself.

Second, governance efficiency and responsibility boundaries.

DAO voting is appealing, but business competition waits for no one. An upgrade of parameters, an ecological incentive, a market window—many times, these need to be measured in "hours." Governance in foundations and DAOs often requires processes, lobbying, and discussions; what ultimately gets done is likely just a "compromise version." In contrast, with a corporate structure: the board of directors, shareholders, and management each have their roles, the decision-making chain is clear, and when problems arise, it is known who is responsible. Speed and accountability are inherent advantages of corporate structures over foundations.

Third, compliance identity and dialogue capability.

Regulatory requirements have never been about "whether one is an idealist," but rather "who is responsible," "how finances are calculated," and "how client assets are custodied." For example, the Hong Kong SFC's licensing requirements for virtual asset trading platforms directly designate "companies" as the application subject, setting standards and processes around custody, compliance, auditing, and risk control. It is difficult to negotiate licenses, bank cooperation, or custodial regulation with a foundation; however, when approaching with a publicly listed company, the logic instantly connects. This is not a matter of technical superiority, but a dialogue of institutional language.

Viewing These Three Points on a Timeline Provides a Clearer Picture

In 2017, the consensus in the ICO wave was that "foundations = orthodoxy"; around 2020, the Tezos Foundation reached a $25 million collective lawsuit settlement over ICO controversies, which in some ways served as a wake-up call regarding the "foundation shield": even if you are called a "foundation," it does not mean you can evade securities regulation. From 2022 to 2024, various countries improved their regulations: the intensity of U.S. regulatory enforcement increased, while Singapore and Hong Kong introduced clearer licensing and prudential rules. By 2025, SUI will have broken through the chain of "token—public company—financial report—capital market," and Conflux will have written "cooperation with public companies" into its governance agenda. The industry's discourse power has shifted from the "myth of foundations" to the "reality of corporate structures."

By this point in the story, you may have come to accept a conclusion: foundations are not "bad," but they cannot solve today's core issues. Projects need efficiency, need financing, need organizational incentives, need to interact with banks, auditors, brokers, and exchanges, and need to enter valuation and risk control systems understood by traditional finance. Foundations are "containers of vision," while companies are "containers of transactions." When blockchain projects truly enter the stage of "deep coupling with traditional finance," that container must be replaced.

Narrative Replacement: How Should Enterprises in the On-Chain Wall Street Era Position Themselves?

Looking back at SUI's "corporate treasury" route: it is not about "a tech company borrowing a shell to go public," but rather existing public companies actively aligning their asset, brand, and governance aspects with SUI—first raising funds (private placement), then acquiring tokens (building positions), then rebranding (brand merger), and finally clarifying in public disclosures "what we hold, how it is measured, and how it affects net asset value per share." This provides institutional investors with a familiar coordinate system: you are investing in a company, and part of its book assets is a public chain token. Thus, the trust that was originally backed by the foundation has been replaced by audits, annual reports, and board resolutions. This transition from "ideals to accounting" is one of the industry milestones worth remembering in 2025.

Looking at Conflux: it did not directly follow the old path of "who merges with whom," but instead wrote "cooperation with public companies" into governance authorization, setting long lock-up periods as a type of "robust constraint understood by traditional capital." The value of this step lies not in "news headlines," but in publicly discussing the four elements of "ecological treasury—public company—lock-up period—consideration arrangement." You acknowledge procedurally that this type of cooperation is an important lever for ecological development while managing the risks of "short-term games" with long locks and governance processes. For a domestic public chain, this is pragmatic.

The explorations of SUI and Conflux are essentially building scattered "small bridges" for "crypto assets to connect with traditional finance." The implementation of Nasdaq's actions has truly connected these small bridges into a passable "main road." The three elements of "tokens entering financial reports—equity tokenization—mainstream trading" have formed a replicable industry paradigm, with SUI addressing "crypto assets entering the real economy," Conflux exploring "public chain compliance connecting with the real economy," and Nasdaq completing the final link of "tokenized assets entering mainstream trading scenarios." The integration of crypto and traditional finance has shifted from case-by-case exploration to a grounded process supported by clear rules, which also renders the vague endorsement of "offshore foundations" irreplaceable, marking the industry's true entry into a phase of "institutional framework + technological advantage," significantly enhancing the flexibility and confidence of institutional participation.

Some friends may ask: "But the Ethereum Foundation is still around, and the Solana Foundation is still around; how can you say 'the demise of foundations'?" What I mean by "demise" is not the dissolution of legal entities, but rather a replacement of the main narrative in the industry.

In the Ethereum ecosystem, the real incremental value comes from a number of corporate teams—L2, Rollup, data availability layers, client and development tool companies, compliance service providers doing KYC, and fintech companies handling clearing and settlement—growth and employment occur within companies, not in the foundation's financial reports. Foundations will continue to do a few "necessary public welfare tasks": basic research, funding for public goods, education, and community support, but they will no longer be the main players in commercialization and capital markets; this is what I mean by "demise."

This "role replacement" has also changed the relationship between projects and capital. In the foundation era, investments were based on "vision + consensus"; in the corporate era, investments are based on "capability + cash flow." The vision has not depreciated, but it must be placed within a structure that can be audited and held accountable. For entrepreneurial teams, this is actually a good thing: incentives are clearer, financing is smoother, and business negotiations are more feasible. For regulators and banks, it is easier to understand: they know who to approach, who to audit, and who to penalize. For the secondary market, the valuation anchor is also more stable: with annual reports and net asset value per share, there are "clearly explainable fluctuations."

Foundations were the ideal containers for a generation of crypto enthusiasts, carrying early romantic notions of "autonomy" and respect for "open source." However, the industry has crossed the stage of "advancing solely on ideals." What we need now are "institutional interfaces" that can connect with banks and auditors, "legal interfaces" that can accommodate treasury and team incentives, and "governance interfaces" that can enter capital markets while withstanding the costs of failure. Corporate structures happen to provide these interfaces. This is not the "end of ideals," but rather "ideals finding a more suitable container."

You may worry: "Does this mean decentralization is saying goodbye?" I am not pessimistic. Decentralization is an issue of network structure and ownership structure, while corporatization is an issue of governance efficiency and external dialogue. The two are not in conflict. On the contrary, when the custody, accounting, disclosure, and risk management of tokens are placed within the order of corporate law and securities law, the network's anti-fragility may be stronger: bad debts, malfeasance, and interest transfer are more easily identified and punished. The direction of international regulation also emphasizes this point: clarifying "who is responsible" before discussing how technology can serve financial infrastructure.

For enterprises, leveraging compliant equity structures to connect with institutional capital and improve governance systems lays a solid "compliance foundation" for Web3; while token incentives play the role of "activating the ecosystem and binding consensus," they are no longer the chaotic issuance model of early foundations but are deeply integrated with corporate operations and subject to compliance constraints, serving as "ecological lubricants."

The dual-driven model of Web3 companies can achieve a synergy of "1+1>2": the compliance and financial strength brought by equity financing provide the "grounding" for token incentives. Together, they point towards a mature form of "clear accounts and healthy ecosystems," allowing enterprises in Web3 to stay on the compliance track while seizing the dividends of ecological innovation.

Finally, farewell to the crypto world foundations.

Hello, dual-driven Web3 companies.

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