# How Crypto Startups Actually Make Money

> Understanding product income, token fees, and why some models never last.

**Published by:** [AndreaPN](https://paragraph.com/@andreapn/)
**Published on:** 2025-11-29
**Categories:** defi, crypto, startup, money
**URL:** https://paragraph.com/@andreapn/how-crypto-startups-actually-make-money

## Content

This article is based on my personal experience as well as research from other founders on social networks. There may be things that I have not realized in my current position, so this article will be 'in my opinion'.Many people argue that most crypto startups don’t actually need a token to run their business. However, when we talk about how a crypto project can generate income, there are three main categories: (Note: This does not include raising funds from seed/private rounds or selling your token through a public IDO.)1. Real Revenue From the ProductThis is the most solid and meaningful source of income. If a team can survive purely on real product revenue, they essentially never need a token. It reflects true product-market fit and creates long-term stability.Ex: Top DEXes like Uniswap, Pancakeswap, Raydium... are models for protocols whose main income comes from real revenue.2. Launching a Token and Earning From Trading FeesMany projects launch tokens on platforms like Clanker, Virtuals, Pumpfun... or other launchpads. These platforms often share a significant portion of their 1% trading fee with the project. If the team captures a hot narrative and builds strong hype, the stream of trading fees can outperform the small real revenue from point 1 — especially in the early stage. Launching a token also brings in the speculative “degen” crowd. While many will only trade the token, a portion will actually try the product, and some may stay as real long-term users if the product is good enough.Ex: most of the AI ​​Agent projects on Virtuals have very little real revenue from the protocol, their main revenue comes from the hype of AI Agents tokens and they collect a lot of trading fees.3. Launching a Token Just to Farm Dev Allocation or Buy Low and DumpThis is the low-quality approach. Some teams launch a token mostly to profit from their team allocation or manipulate early prices and sell to inexperienced buyers. This model never lasts — everyone ends up dumping on each other, and the project has no true intention of building for the long run. Bottom Line For early-stage teams — especially small teams without much attention — launching a token can be useful for marketing, building an initial community, and generating some fee-based income while real product revenue is still weak. If the team executes well, real revenue will eventually grow and help support the token’s long-term value. On the other hand, if a project already has strong backing (for example, those supported by Base), then having a token or not matters much less because they already have enough runway to operate for years.The most important thing is to avoid projects that rely on the low-quality behavior described in point 3.

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