Goodbye encryption world foundation

Many years ago, there was an unspoken "get on board ceremony" for blockchain projects—first, you would run to some offshore location to register a foundation, write "non-profit," "open source," and "transparent" in the white paper, and repeatedly emphasize "community governance" and "distributed autonomy" during roadshows. With the foundation providing endorsement, it felt somewhat legitimate. However, after ten years, you will find a more interesting and realistic trend: foundations are no longer the "orthodox posture"; project teams have begun to actively embrace corporate structures and even directly include tokens in the financial statements of listed companies.

Whether it is Conflux injecting core assets through the Hong Kong-listed company Pioneer Pharma, or Tron reverse merging with the small-cap Nasdaq company SRM Entertainment and renaming it "Tron Inc.", and then Sui promoting a large allocation of SUI Tokens for financial management in a US stock company, Web3 projects have taken the spotlight, utilizing traditional capital markets to complete a new way of realizing valuation. And in this trend of "shifting from ideals to trading", Nasdaq actively applied to the SEC for listing tokenized stocks, further providing the entire industry with the last "compliance key", preparing to open the last slightly ajar door between "crypto assets" and "mainstream finance".

The ideal shell has been replaced with the shell of the capital market

On July 28 this year, the US company Mill City Ventures III announced the completion of a $450 million private placement, clearly stating that a large portion of the raised funds would be allocated to SUI Tokens, transitioning to implement the “SUI Treasury Strategy.” On August 25, the company further announced renaming itself to 'SUI Group Holdings' and changing its trading code to SUIG; on September 2, they disclosed holding 101.8 million SUI (equivalent to approximately $332 million based on that day's price). This is an extremely clear path: putting “Tokens” into the “public company” basket, using annual reports, audits, and shareholder meetings to carry the responsibilities and assets that were originally under the foundation's name but were unclear. It is worth noting that this is no longer the act of “the Sui Foundation acquiring a listed shell,” but rather a proactive turn by the public company, aligning with the SUI ecosystem through brand restructuring and asset adjustment—this path design is completely different from the earlier “universal key of the foundation.”

In early September, the Conflux Foundation initiated a governance proposal to authorize its ecological fund to engage in treasury/financial cooperation with "publicly listed companies", proposing constraints such as a lock-up period of no less than four years. This is not a news gimmick of "declaring who acquires whom", but clearly states in the governance process that it will "deal with publicly listed companies", which means that token management, fund arrangements, and ecological support will gradually migrate to a framework that is more understood and accepted by traditional finance. The areas where the foundation has been "vague" in fundraising, compliance, custody, and reputation endorsement have found a more robust vehicle.

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. This step carries weight far beyond "the exchange adding a new trading category"; once the SEC finally approves, the thousands of existing listed companies on Nasdaq can theoretically complete the tokenization of each share in a short time, achieving painless on-chain integration. This will mark the first formal acceptance of Blockchain underlying technology by the national market system in the United States, representing a breakthrough at the institutional level that truly connects the traditional financial system of Wall Street with the world of crypto, paving the way for deep integration. Behind this, stablecoins have become the optimal settlement medium, with demand set to explode, reserving liquidity for the realization of tokenized stocks. STOs (Security Token Offerings), which were previously testing the waters on the compliance edge, will no longer be limited to niche assets; instead, they can accommodate the compliance demand spilling over from Wall Street and may even become the "core hub" connecting traditional securities with crypto assets.

Return to the underlying logic: Why is the foundation getting on board?

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

The foundation wears the guise of "non-profit," but the vast majority of project teams are entrepreneurs, not institutions that write academic papers. The essence of entrepreneurship is to create cash flow, to provide incentives, and to retain people. However, foundations are inherently unsuitable for equity/option incentives, and it is not convenient to transparently attribute the benefits of "token appreciation" to individuals or operating entities. Thus, it falls into a contradictory situation, nominally a "public welfare organization," but practically "disguised commercialization," while also needing to "time the market for selling" at the peak 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 is in crypto assets, the vast majority being ETH-based; compared to the $1.6 billion disclosed in 2022, this represents a shrinkage of 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: the Foundation's finances do not equate to the ecological commercial capabilities, nor do they mean that the commercialization and compliance of a blockchain can fall within a framework that is understandable and subject to regulation. In reality, what drives the expansion of the Ethereum ecosystem is a group of corporate teams: L2 projects, infrastructure developers, development tools and service providers, rather than the Foundation itself.

Second, governance efficiency and boundary of responsibility.

The voting of the DAO is beautiful, but business competition waits for no one. A parameter upgrade, an ecological incentive, a market window, often needs to be measured in "hours". The governance of the foundation and the DAO often requires processes, vote-pulling, and further discussion; in the end, what is produced is likely just a "compromise version". In contrast, with a corporate structure: the board of directors, shareholders' meetings, and management all fulfill their roles, with a clear decision-making chain, and when problems arise, it is known who is responsible. Speed and accountability are where the corporate structure naturally surpasses the foundation.

Third, compliance identity and communication ability.

Regulatory requirements have never been about "whether or not one is an idealist," but rather about "who is responsible," "how finances are calculated," and "how client assets are custodized." For example, the Hong Kong SFC's licensing requirements for virtual asset trading platforms directly take the "company" as the applicant, setting standards and processes around custody, compliance, auditing, and risk control. It is very difficult to discuss licensing, bank cooperation, or entrusted supervision with a foundation; discussing it with a listed company connects the logic immediately. This is not a matter of technical victory or defeat, but a dialogue of institutional language.

It will be more intuitive to look at these three points on a timeline.

In 2017, the consensus in the ICO wave was that "foundation = orthodoxy"; around 2020, the Tezos Foundation reached a collective lawsuit settlement of $25 million regarding ICO controversies, which to some extent served as a warning bell for the "foundation as a shield": just because you call it a "foundation" does not mean you can evade securities regulation. From 2022 to 2024, various countries improved their regulations: the enforcement intensity of U.S. regulations increased, while Singapore and Hong Kong introduced clearer licensing and prudential rules. By 2025, SUI broke through the link of "Token - listed company - financial report - capital market," and Conflux incorporated "cooperation with listed companies" into its governance agenda. The industry's discourse power shifted from the "foundation myth" to the "corporate reality."

The story has come to this point, and you can probably accept one conclusion: the foundation is not "bad"; it just cannot solve today's core problems. Projects need efficiency, they need financing, they need organizational incentives, they need to interact with banks, auditors, brokers, and exchanges, and they need to enter a valuation and risk control system understood by traditional finance. The foundation is a "container of vision," while the company is a "container of transactions." When blockchain projects truly enter the stage of "deep coupling with traditional finance," that container must be replaced.

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

Looking back at SUI's "corporate treasury" route: it is not "a technology company borrowing a shell to go public," but rather existing listed companies actively aligning their asset side, brand side, and governance side 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 we measure it, and how it affects net asset value per share." This provides institutional investors with a familiar coordinate system: what you are investing in is a company, and part of its book assets is a certain public chain Token. Thus, the trust originally backed by the foundation has been replaced by audits, annual reports, and board resolutions. This conversion "from ideal to accounting" is one of the industry nodes most worthy of remembrance in 2025.

Looking at Conflux again: it did not directly follow the old path of "who and who", but instead wrote "financial cooperation with listed companies" into governance authorization, and set a long lock-up period as a type of "traditional capital can understand stable constraints". The value of this step lies not in the "news headline", but in discussing the four elements of "ecosystem treasury - listed company - lock-up period - consideration arrangement" in public governance. You programmatically acknowledge that: this type of cooperation is an important lever for ecosystem development, while managing the risk 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 the "integration of crypto assets with traditional finance." The actions taken by Nasdaq have truly connected these small bridges into a traversable "main road." The three elements of "Token entering financial reports - equity tokenization - mainstream trading" form a replicable industry paradigm. SUI addresses the issue of "crypto assets entering the real economy," Conflux explores "compliance of public chains with the real economy," and Nasdaq completes the final piece of "tokenized assets entering mainstream trading scenarios." The integration of crypto and traditional finance has shifted from individual case explorations to a grounded process supported by clear rules, which also renders the vague endorsement of the "offshore foundation" irreplaceable, marking the industry's true entry into the stage of "institutional framework + technological advantage." The flexibility and confidence of institutional participation will also be significantly enhanced.

A friend asked: The Ethereum Foundation is still there, and the Solana Foundation is also still there, how can we say "the demise of foundations"? What I mean by "demise" is not the dissolution of legal entities, but rather the replacement of the main characters in the industry narrative.

In the Ethereum ecosystem, the incremental changes you can truly perceive come from a group of corporate teams—L2, Rollup, data availability layers, client and development tool companies, KYC compliance service providers, and fintech for clearing and settlement—growth and employment happen within companies, not in the foundation's financial reports. The foundation will continue to do a few "must-do" public service tasks: basic research, funding for public goods, education, and community, but it is no longer the protagonist in commercialization and capital markets; this is what I mean by "decline".

This "role replacement" has also changed the relationship between projects and capital. In the foundation era, the investment was based on "vision + consensus"; in the corporate era, the investment is based on "ability + cash flow". The vision has not depreciated, but it must be placed into a structure that can be audited and held accountable. For the entrepreneurial team, 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 whom to find, whom to audit, and whom to penalize. For the secondary market, the valuation anchor is also more stable: with annual reports and net asset value per share, there is “clear volatility”.

The foundation is an ideal container for a generation of crypto enthusiasts, embodying the early romanticism of "autonomy" and respect for "open source." However, the industry has moved beyond the stage where progress can be made solely based on ideals. What we need now are "institutional interfaces" that can connect with banks and audits, "legal interfaces" that can accommodate treasury and team incentives, and "governance interfaces" that can enter capital markets while withstanding the costs of failure. The corporate structure happens to provide these interfaces. This is not the "end of ideals," but rather the "ideals finding a more suitable container."

You may be concerned: "Does this mean we say goodbye to decentralization?" I am not pessimistic. Decentralization is a matter of network structure and ownership structure, while corporatization is a matter 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 framework of corporate and securities law, the network's antifragility may be stronger: bad debts, malfeasance, and interest transfer can be more easily identified and punished. The direction of international regulation also emphasizes this point: clarify "who is responsible" before discussing how technology serves financial infrastructure.

For enterprises, leveraging a compliant equity structure to connect with institutional capital and improve governance systems lays a solid "compliance foundation" for Web3 deployment; meanwhile, Token incentives play the role of "activating the ecosystem and binding consensus," but no longer follow the chaotic issuance model of early years' foundations. Instead, they are deeply integrated with business operations and are subject to compliance constraints, acting as "ecosystem lubricants."

Web3 companies can achieve a collaborative effect of "1+1>2" through a dual-driven approach: the compliance and financial strength brought by equity financing gives the Token incentives a solid foundation. Both elements point towards a mature form of "clear ledger and healthy ecosystem," allowing enterprises to remain on the compliant track while seizing the dividends of ecological innovation in their Web3 layout.

Finally, goodbye, Crypto World Foundation.

Hello, dual-drive Web3 company.