David Pakman, Managing Partner and Head of Venture Investments at CoinFund, said on July 14 that the crypto industry has not yet worked out how to design tokenomics that function well for contributors. Pakman joined CoinFund in October 2021 after 13 years as a venture investor at Venrock, giving him an unusually long view of how incentive structures evolve across technology cycles. Speaking on The Starting Block, a podcast published under The Block's media network, Pakman proposed that projects consider paying contributors in stablecoins rather than in their own native tokens, bringing compensation structures closer to a traditional salary model and shielding workers from token price swings. His comments addressed the question broadly, though it remains unclear from the available reporting whether he specified which project types, stages, or contributor roles he had primarily in mind.

The timing of the argument is not coincidental. A 2026 DESH Group analysis of 118 Memento Research-tracked token launches from 2025 found that 84.7% of those assets were trading below their initial launch valuation, with a median decline in fully diluted valuation of 71.1%. Not a single project that launched with a valuation above $1 billion managed to stay in the green; the median loss in that group was approximately 81%. The broader supply picture adds context: total token releases across major sectors reached $97.43 billion in 2025, one of the largest emission years on record. In a single week in January 2026, $940 million in scheduled token releases entered open markets, including a $42 million unlock from LayerZero representing 6.36% of its circulating supply.

The structural problems with token-based contributor pay go beyond price performance. Governance tokens are typically disconnected from protocol revenues, meaning a contributor's compensation can lose most of its value regardless of the quality of their work. Token grants also create taxable events at unpredictable market rates that contributors are often poorly positioned to report or manage. Analysis from DESH Group, drawing on data from 8Blocks and BeInCrypto, found that in many projects, just 10 wallets controlled more than 60% of a token's supply, rendering individual contributor grants economically marginal. On the dynamics that follow from that concentration, a 2026 DESH Group analysis observed: "The private capture of upside happened in an inaccessible way. Without organic buying pressure, structural flaws become immediately visible."

The shift Pakman is describing is already happening quietly in DAO (decentralized autonomous organization) treasuries. Collective DAO holdings stood at $26 to $28 billion as of Q1 2026, with stablecoins making up 50 to 70 percent or more of actively managed portions. The payroll infrastructure company Rise reported more than $1.5 billion in lifetime stablecoin payroll volume as of May 2026, with over half of its workers preferring stablecoin withdrawals. According to Streamflow Finance's DAO Treasury Distribution Report, the emerging standard is a two-track system: "native tokens for long-term alignment, stablecoins for reliable payroll, both increasingly run on automated, auditable on-chain rails." The model Pakman is advocating, stable base pay with token grants vesting over two to four years, reflects what many organizations have already adopted by necessity. His July 14 remarks also represent a consistent strand in his thinking: in April 2025, he told Axios that token generation events could create a liquidity path for venture-backed companies, a position that situates stablecoin payroll as one piece of a broader rethinking of how tokens are deployed across a project's lifecycle.

The argument carries particular weight in Africa and South Asia, where the tokenomics problem compounds local currency risk. Sub-Saharan Africa already conducts 43% of all crypto transactions in stablecoins, the highest regional share globally, according to a 2026 Transak report. Nigeria accounts for roughly 40% of continent-wide stablecoin inflows, totalling approximately $22 billion, and the country ranks second globally in overall crypto adoption. Ethiopia recorded 180% year-over-year growth in retail stablecoin transfers. Kenya also stands out in the regional picture: it ranks fifth globally for transactional stablecoin use, and its Virtual Asset Service Providers (VASP) Bill was signed into law in October 2025, establishing one of the continent's clearer regulatory frameworks for digital asset activity. For a developer in Lagos or Addis Ababa contributing to a Web3 protocol, payment in that protocol's native token means exposure to two layers of volatility at once: the token's own price and the local currency's depreciation against the dollar. Stablecoin pay removes one of those layers. In South Asia, the dynamic is similar. Pakistani and Bangladeshi freelancers working Web3 contracts have already made USDT and USDC their default payment rails. India represents the most significant case in the region. Its blockchain developer community is among the world's fastest-growing, and experienced APAC Web3 developers already command salaries ranging from $100,000 to $260,000 annually, with compensation structures increasingly split between stablecoin base pay and token grants along precisely the lines Pakman describes. The Reserve Bank of India's Digital Rupee had surpassed six million users by March 2025, reflecting an official interest in programmable digital currency that runs parallel to the private-sector shift toward stablecoin payroll. Pakman's proposal describes an existing reality across these markets more than it prescribes a new one.

The legitimate counterargument is about alignment. Token grants, even imperfect ones, give contributors a reason to care about a protocol's long-term health in a way that a USDC salary does not. Pakman's own firm, CoinFund, has invested in stablecoin infrastructure through a portfolio company called Dakota, and its broader investment strategy spans projects from pre-launch through post-token stages. The more substantive question his hybrid model raises is whether a stablecoin base salary, paired with token grants vesting over two to four years, still motivates contributors adequately if token upside is reduced or back-loaded. If token prices continue to underperform at the rates the 2025 data recorded, those vesting grants may cease to function as meaningful incentives regardless of their structure. That question remains open.

The data behind Pakman's argument is difficult to dispute. Industry analysis points consistently to a default approach in which contributors are paid primarily in native tokens with linear vesting schedules, and that model has not performed well by any measurable standard. Regulatory frameworks for stablecoin payroll are maturing in South Africa, Nigeria, Kenya (where the VASP Bill took effect in October 2025), and Mauritius, reducing one practical barrier to adoption. Whether projects will voluntarily adopt a hybrid model or wait for market pressure to force the issue is the more immediate question heading into the second half of 2026.