On tokens vs equity, Venice, and $VVV

Hi Haseeb, long term listener, first time caller… If VVV’s primary justification at a 1B FDV is a “perpetual pro-rata claim on compute,” the valuation doesn’t hold up. The mechanism gives stakers proportional access to Venice’s daily inference capacity through a credit system (DIEM). In practice, this is a right to draw dollar denom usage credits inside one provider’s platform. Not ownership of GPUs, data centers, or raw compute. The company fully controls the infrastructure, mint rates, credit parameters, and capacity expansion. There is no governance, so holders have no say over how the asset evolves or is priced. This differs sharply from real infrastructure ownership. A perpetual claim on bandwidth or power in traditional markets usually comes with asset ownership, long-term contracts with pricing power, or governance rights. Here, stakers get usage rights in a credit framework from a centralised operator that is still largely leasing GPUs and only now raising capital to build its own capacity. Token holders do not own or control that build-out. Valuing the tokenised claim on this capacity at $1B implies Venice’s inference output deserves a premium comparable to owning slices of real compute infrastructure. In reality, inference is rapidly commoditizing through spot GPU markets and efficiency gains. A credit-based access right inside one provider’s system does not create equivalent scarcity or pricing power. The “perpetual claim on compute” is a useful product feature for access. It is not, by itself, a foundation that supports a $1B FDV for the token. Real infrastructure is valued on ownership, control, and physical scarcity none of which exist here in a form that justifies the current valuation.

4 things 1. you cite people’s imagination as getting too imaginative, as if that is their fault about people’s perceived ideas about the role of VVV in Venice. You placed blame upon people for “not reading about VVV”. I don’t think that’s fair. There’s never been any material about VVV stating what it *isnt*, and it we are in an industry about replacing existing ownership structures. It doesn’t feel right to place blame on people with expanded expectations, especially when the premise of the existence of a token is that someone might buy it. The most definitive statement that VVV is not equity is this tweet right here. I think it’s excusable that VVV holders might think that VVV might be conceptually ‘senior’ in Venice and that Venice equity might one day dissolve and that only VVV remains. It has not been silly to think that, and even with this tweet, it is still not silly to think that without a definitive long term statement about the role of VVV. 2. You described VVV as a liability of Venice (equity). This is only conceptually true. There’s no legal restrictions (that I’m aware) preventing fiduciary duty from totally ejecting VVV as an asset from the company. It’s not a liability in a legal sense, only in a spiritual one. Therefore anyone expecting to buy VVV for an upside return must factor this into their risk analysis, no? 3. Ultimately if VVV is an innovation in tokens, as you said, this remains (sadly) in crypto a very underexplored frontier. A fundamental concern that you cited is that “DAOs” and “tokens” failed. Part of that concern is due to a lack of investor rights and protections in tokens, and that maybe we ended up just recreating the need for Delaware C-Corps from first principles. So, if VVV is truly a non-C-Corp innovation in tokens, it’s pretty fair to expect a very high level of scrutiny based on everything we know from the past about tokens and equity. 4. It’s also very reasonable to believe that two capital structures is worse than one. A thought experiment worth considering is “If VVV *could* have been issued as compliant equity, would it have been?” Because if the answer to “why isn’t VVV equity?” is “because of regulations”, then all aforementioned by reasoning is just downstream of this fact - and everyone’s intelligence is being insulted if this is the case.

Venice is a company, it's not a network. It's not decentralized. It's not on-chain. In fact, the vast majority of Venice customers are not crypto users. I banged on this repeatedly in the OP because I don't know why this is difficult to understand: no founder gives away 50% of their company equity for free, especially not of a company that's barely even built. After the airdrop, Erik self-funded the company to the tune of millions of dollars without selling any VVV. BanklessDAO was not equity in Bankless. Even if you COULD have given away "compliant equity" in Bankless, you wouldn't have done that. If you were parting with equity, you would have sold it for cash so you could grow your business like every other entrepreneur in history. Let's be serious here. VVV has ALWAYS been clear about what it is. Literally always. There is no ambiguity, to say otherwise is misinformation. If you didn't know, that's different from there being ambiguity in the team's statements. Ask your AI if there was ambiguity about VVV's role within Venice. Now it's true that it's an overloaded asset, much like BNB: they are buying it back with subscription revenue, it gives you the right to mint DIEM (compute), and gives you access to Venice Pro. That makes it nontrivial to straightforwardly value. But BNB is not equity in Binance, and VVV is not equity in Venice.

Yeah, this is not boosting confidence at all in the token... In fact, it comes off as a bit bragadocious since you're getting the best of both worlds. Also, you labeling VVV as a liability is proof that the token was designed poorly. Yes VVV may have helped bootstrap the product but now the company would be better off without it

Counterpoint. If the token had value, you wouldn’t need to post an 8 minute video. Hyperliquid.

Is there legally binding documentation in place around the perpetual inference? There’s certain criteria around recognition of VVV as a liability on the corporate balance sheet If the VVV token is a foot note as a contingent liability then that would be clear as day for me personally - keen to see the corporate financials on this one

Do you believe the utility value of VVV as a method of paying for AI compute is worth $1B and should be valued the same as the equity controlling the revenue What stops the company and its equity holders from halting token buybacks and/or stripping the compute paying utility of the token You mention the token is a liability, is that legally enforceable, does the company have an actual obligation to token holders in terms of redemption value

We used to tweet "thnx for the cheap coins" Going on camera defending makes the suspicion a bit worse lmao

Empire podcast clip was so bad, had to do damage control on 4th of July I think equity raise caught folks off guard because CT (as usual) didn’t do their research

This is hilarious. Dragonfly needs the price over $13.80 so they can dump their tokens on retail and recapture their investment…. They can dump all their tokens and maintain their equity share of @AskVenice That’s all you need to know $VVV

When push comes to shove, owning equity in the company gives you legal rights regarding company profits. Owning VVV gives you no such legal rights. It's ultimately based on a promise that Venice, the company, will not change the "terms" of the token in the future. If you have the opportunity to buy equity, it's only natural that you'd also want to capture the potential upside of the VVV token (you get both the downside protection and the upside potential from the equity). So having the VVV token as well is just more upside. But owning just VVV is a completely different risk profile; you ultimately have no legal weight in the matter. Why not let retail buy part of the equity as well? As usual, that's a game just reserved for the in-group.

can i say what i think about this video without venice supporters getting upset (i do like venice)

good explainer, helpful I asked AI (Nansen) like you recommended also not investment advice!

hi @hosseeb , can we see the onchain wallets where you are supposedly holding the enormous amount of VVV (that you recently bought as part of deal) ?

I'm sorry hosseeb but there is no way you had to beg them to buy a utility (scam) token currently trading above the valuation of the company equity

if the entity owns vvv on its balance sheet then why does dragonfly as the equity owner still get vvv tokens as grant plus warrant strike price at 13

Totally ugly and arrogant for the other @dragonflyvc to call $VVV holders “FRANKLY STUPID”. And I’m a holder/accumulator/evangelist since launch and all through the lows. Like fuck off, that’s unacceptable to the people who have been using and spreading the platform.

VVV may or may not be equity-like or accrue value. For VCs it doesn’t matter - including the token in a fundraise is a free option. That’s one of the controversial aspects, that some, not all, token buyers also get equity. The goal should be that projects are either token (autonomous and/or onchain business) *or* equity (everything else) - if you want the benefits of tokenization, tokenize the equity, it can carry the exact same utility while not creating perverse incentives. Regulations like 12g are a major obstacle to this, but this should be the goal the industry is working towards. For centrally owned/controlled businesses, use equity and put the utility in the equity. For autonomous protocols use native tokens. Introducing both *always* creates warped incentives and misunderstandings, and advantages only a certain class of investors.

@camronmira Discretionary burns went to 20k a day two days ago up from 6-8k per day, let the plebs argue. Thanks for the cheap VVV.

They trying so hard to make you believe that $vvv worth something so they can make you as exit liquidity . They put some fancy worth to useless token while the equity took all the benefits . Stop the bullshit . Zero

only 2M api calls per day? those stats are a lot less than I would have expected

More like I’m funding their capex spend to build out compute power that doesn’t exist by buying an option to stake into something that provides me gift cards to services with no legal recourse and mutilple layers of counter-party and smart contract risk. Compute is valuable. Energy trading is very niche. Discrete energy options on compute a nascent company hasn’t built yet is fucking retarded. Just another dogshit pool2 grifting on word salad du jour. The token has no business purpose. Period.

There was a comment that $VVV is a subscription $VVV isn’t a subscription. A subscription is a limited-duration claim. $VVV/DIEM is a perpetual claim on compute capacity that, for Venice, is a long-duration liability. When Venice buys and burns $VVV, they swap out perpetual compute liabilities in favor of higher-margin, limited-duration subscriptions. For the user, $VVV is a financial capital asset. It’s one of the cleverest growth hacks I’ve seen in crypto. The way I think (I’m just an outside observer) it worked: -Venice secured initial compute capacity, minted 100 million VVV tokens, allocated roughly 35% to their corporate treasury and airdropped roughly 50% to Base community. - By allowing users to stake VVV for perpetual claims on a pro-rata share of compute (now it’s a perpetual claim on the API+ability to mint $DIEM), Venice created market demand, which allowed them to capitalize their balance sheet (with the help of Base and Aerodrome) based on the market's expectation of future capacity. - Venice used the treasury for initial R&D, software development, market research for PMF, and early user acquisition, to grow the platform quickly to 3M users. ie, bootstrapping. - Based on the growth, Venice raised $65M to build their own physical datacenters on a valuation of ONE BILLION AMERICAN DOLLARS in just fifteen months. Series A at $1 billion valuation with zero dillution (as far as I know). LoL. Holy cow! I’m jealous. Now it’s a question of whether or not Venice can expand operating margin and increase the funds used to buy VVV. Owned equipment is a different beast than leased equipment. Furthermore, they could go public or be acquired and new management could have a different perspective on the token. Just the ramblings of an anonymous guy on the Interwebs. I’m probably wrong. Not financial or business advice. Do your own research.

There’s this sort of sneaky switch that happens in this token defense where people go from “the token has legitimate value” (true: utility model) to “it should appreciate with Venice growth” (true: meme model) while implicitly (by proximity) linking the two to suggest there is something inherent to the utility token itself that should drive its appreciation with network growth. But of course this isn’t the case—the token isn’t for a proportion of network compute, or even for a fixed amount of compute; it’s for a dollar value of compute. There should be no reason for token appreciation as a utility token vis-a-vis network growth when it’s for a fixed amount of dollars/day. That’s why this all feels very slightly duplicitous. I get why given the situation, it’s just…not the paragon of transparency.

> DIEM earns $365 of compute a year. > 20% APY puts DIEM at $1825. > 660 staked VVV to mint a DIEM > VVV value is $2.76 i'm short

If you believe tokens have a structural advantage over equity, then what's the case for investing in equity at all? To you guys, tokens are just an afterthought

Clarity made by VCs of projects is something VCs not do a lot. Kudos to @hosseeb and @dragonflyvc for putting clarity for their portfolio.

I asked Grok. Whole response: lmao.

Haseeb, got a couple points on this damage control statement. First, $VVV was not marketed as liability of Venice, $DIEM was. The token with $48m marketcap. See here: Given that, $VVV could not have been marketed just as compute token, $VVV must have been much more than that, as you currently need 625 sVVV to mint 1 DIEM, which gives you $1 of compute every day. By saying $VVV was just compute token and everybody was supposed to know, you are saying that market marticipants are locking up around $7k to get $1 of compute a day, recouping the cost in about 19 years, and trusting that they will surely want to be using just Venice. Based on this math, most people must have thought $VVV is more. Otherwise, they could have just bought $DIEM from the open market at fraction of the cost. Second, given the centralized business and lack of protocol, how is $VVV not an unregistered security? Remember, $VVV has monthly buybacks, but these are discretionary, and dependent on overall success of the centralized Venice compute business that Dragonfly now helped with the giant raise. TLDR: $VVV has a 2021-era two token ponzinomics, in which there is "staking" for no reason. $DIEM is the compute token, $VVV seems like a scamtoken.

If u really think this way then then thre is no reason why the token $vvv it self still on this price valuation. Should go down way more than this at least half of the price.U smart but not honest n there is no way to put it that u guys just treat $vvv dumb money for subscription

One thing i think is funny is that people think the equity didn’t exist before the funding round. The only thing that actually happened is that the Venice team sold part of their company to investors.

Trust me bro $VVV

I like the solo video format from you. Maybe you can do this for other topics as well instead of long form text

Agreed. VVV is a utility token that has value independent of burns and the company needs it to do well to support its agent-DIEM revenue. Hence we build e2e privacy for agent guardrails via @icme_labs + Venice

our brains always try to save energy, so people are more comfortable with dichotomies or black/white scenarios a.k.a tokens vs equity. this is a great explanation and a proof that the solutions to complex problems are within an spectrum.