Sergito
This paper introduces a dual-token capital structure as an alternative to the prevailing single-token model in web3 ecosystems. Most current NFT project tokens are purely speculative and face structural challenges related to persistent sell pressure and a lack of embedded demand mechanisms. The proposed model separates the roles of value storage and speculative exposure by introducing a stablecoin ("NFT-USD") alongside a fungible project token ("$NFT"). Yield generated from stablecoin reserves is used to support the ecosystem through token buybacks, creating a feedback loop that addresses long-term sustainability and value retention.
The recent expansion of stablecoin infrastructure and fungible tokens from NFT projects presents a timely opportunity to revisit foundational concepts in digital asset mechanism design. This paper proposes a dual-token model for web3 projects that integrates a stablecoin ("NFT-USD"), acting analogously to traditional fixed-income instruments, and an equity-like token ("$NFT") that provides exposure to the project’s valuation upside. The model is built on the premise that NFT communities serve as distributed, culturally aligned networks capable of facilitating broad and organic adoption. It also seeks to address a growing structural issue in tokenized ecosystems: the persistent decline in project token value caused by insufficient organic demand relative to ongoing supply.
Early NFT ecosystem tokens represent the first wave of fungible token design within culturally driven digital communities. These tokens successfully broadened holder bases and introduced new mechanisms for engagement and coordination. However, their demand has largely been driven by speculative interest, with limited structural integration into recurring behavior or economic loops beyond consumption-based sinks. These sinks typically require the project treasury to sell tokens in order to monetize revenue, which places persistent downward pressure on price. As a result, many of these tokens have struggled to sustain long-term value, highlighting the need for models that embed organic demand and capital flow directly into the system’s design.
A dual-token architecture offers a potential solution. By introducing a project-issued stablecoin, the ecosystem can mimic the capital structure of traditional companies, separating stable, fixed-value instruments from equity-like exposure. A stablecoin such as NFT-USD does not carry price volatility for the holder and poses limited financial risk beyond opportunity cost. By allocating capital to NFT-USD, participants support the growth of the system’s treasury. As assets under management increase, a portion of the stablecoin yield would be directed toward buying back ecosystem assets (the NFTs and $NFT) on the open market. This creates a long-term value loop in which growth in stablecoin adoption results in continuous support for the project tokens. NFT and token holders are thus able to deepen their financial involvement in the ecosystem without taking on the same exposure to volatility or liquidity risk.
NFT-USD should be a fully collateralized, regulated stablecoin backed by fiat currency reserves, providing users with a stable and secure store of value. Capitalizing on the growth of stablecoin-as-a-service providers, NFT-USD reserves would be managed by a regulated third party and placed in bankruptcy-remote entities. These reserves would be invested in low-risk treasuries and money market funds.
Key characteristics:
Full fiat-backed reserves ensuring 1:1 collateralization and redeemability
Yield-generating reserves with low-risk, predictable income streams
Transparency and auditability to promote market confidence
$NFT should be a freely tradable fungible token designed to serve as the primary speculative asset of the ecosystem. Like other community tokens in the NFT space, it represents no formal claim, utility, or governance rights. Its value is driven entirely by market perception, cultural relevance, and ecosystem engagement. However, unlike earlier models, demand for $NFT would be reinforced by a structural buyback mechanism funded by yield generated from NFT-USD reserves.
Key characteristics:
Positioned as a narrative and market-driven asset that reflects broader project sentiment
Price support introduced through buybacks sourced from stablecoin yield
Culturally linked to the NFT ecosystem, encouraging holder alignment and attention
Yield generated from the stablecoin’s underlying reserves is reinvested into the ecosystem through structured buybacks of the project’s NFTs and token. This process not only sustains consistent market support for those assets but also reinforces alignment between stablecoin adoption and token valuation. More importantly, it adds a mechanism for continuous reduction of circulating token supply to incentivize long-term participation.
NFT communities have rapidly emerged as robust, highly engaged networks capable of driving cultural, economic, and technological adoption. Unlike traditional distribution models that rely heavily on paid marketing and speculative incentives, NFT communities possess intrinsic motivations driven by identity, culture, and collective asset ownership. As such, these communities represent significant latent value as scalable, low-cost, and culturally authentic distribution channels.
Scalable distribution: NFT communities organically accelerate adoption, significantly reducing distribution costs
Risk diversification: Users benefit from clearly delineated risk-return profiles across stable and speculative components
Stable yield generation: Predictable and transparent income streams from stablecoin reserves
Cultural alignment and authenticity: Leveraging NFT community dynamics to foster genuine, long-term engagement
The dual-token capital structure, comprised of NFT-USD as a stablecoin and $NFT as a speculative ecosystem token, offers a novel and pragmatic approach to addressing key shortcomings in current token design within NFT-based web3 ecosystems. By decoupling value stability from price exposure, this model introduces a more robust foundation for sustainable growth and long-term alignment between participants and protocols.
In a landscape where many ecosystem tokens face downward trajectories and unstable demand, the dual-token approach provides a credible framework for capital efficiency, market trust, and cultural alignment. It invites projects to think beyond speculative tokenomics and toward integrated systems where value creation and value distribution are meaningfully linked.
This structure is not just an innovation in token design. It is a step toward a more durable, transparent, and community-sustained financial architecture for the next generation of internet-native brands and networks.
