Liquid Founder Markets

The Democratization of Startup Capital Formation.

When we became interested in blockchain technology (over a decade ago now!), there was one overwhelming premise that drew us to dive into the sector: the idea that a global, permissionless financial system could give individuals sovereignty over their assets and decision-making capabilities with those assets. This ethos has fueled our passion for investing in the space and led us to create Eon Capital. Over the past few years, we’ve witnessed both crypto-native businesses and incumbents alike integrate blockchain technology into their businesses alongside regulatory developments (GENIUS Act, SEC/CFTC guidance) that bring the initial vision of true global permissionless markets much closer to a reality.

One idea in particular has been top of mind for us for some time now and is finally at the point where we believe it can become a reality: the concept of liquid founder markets. A sector of the investment world that has remained tightly gated is early-stage startup funding, where both risk and return are the highest and only select venture funds have access. This sector will be pried open over the next decade, and it will happen on public blockchains. A successful liquid founder market will open up early-stage price discovery to investors around the globe and a new stream of funding for founders.

Two historical bottlenecks for founders, talent and tooling, have begun to disintegrate thanks to the breakneck speed of AI development over the past few years, lowering the barrier to entry for turning ideas into tangible businesses. The world is moving toward a startup-forward economy. Crypto is what makes liquid founder markets, a way to both fund and speculate on these emerging ideas, possible.

Most Investors Are Left Out of Early-Stage Price Discovery

To put it plainly, the everyday investor has, rather unsurprisingly, a limited array of investment vehicles that provide the potential for outsized returns. The public markets that once delivered early growth to ordinary investors have quietly closed due to the now-commonplace nature of multiple-round early-stage venture funding. Companies are going public less often, later, and at higher valuations. Over the past two decades, the number of IPOs per year has been cut to one-third while the average IPO price has increased nearly sevenfold (see graphic).

The number of U.S. public companies has fallen from more than 8,000 in the 1990s to under 4,000 today, while roughly 87% of U.S. companies with over $100 million in revenue are now private. In most cases, by the time a company IPOs, the venture and private equity backers have already experienced the vast majority of the capital appreciation associated with early-stage growth.

We Live in an Owners’ Economy

A standout 2014 WSJ article from now Fed Chair Kevin Warsh and Stanley Druckenmiller, “The Asset-Rich, Income-Poor Economy”, outlined a widening gap between earners and owners. This gap has only continued to widen as real wages lag further behind asset prices. Retail capital has noticed this gap and is hunting for upside. Look at collectibles, a sector experiencing tremendous growth as people creatively lean into ownership driven by recognized scarcity value. Prediction markets offer a different type of example. The speculative capital flowing into them generally splits into two buckets: longshot bets with large payoffs (a 2% chance that some event happens before year-end) and more routine fast-resolution bets (betting on the Steelers to beat the Browns when the game is already in the 4^th quarter). The first bucket, the capital willing to hold on to an unlikely outcome with high upside, is increasingly exploring venues to express this interest.

Memecoins grew from a niche curiosity into a market that peaked near $150 billion, with average daily trading volumes surging ninefold from roughly $1.1 billion in 2023 to $9.7 billion in 2024 and still turning over several billion dollars a day. Let’s set aside the obvious excess for a moment and look at what memecoins normalized: the concept that an individual can use their own intuition about the virality of an idea, joke, or cultural movement to participate in liquid price speculation. This was a massive behavioral shift in financial markets, and it’s one that isn’t going away. Since the dawn of Bitcoin, early digital asset enthusiasts have been trailblazers in taking a financial idea in its infancy and building out the technology around it to make the idea a reality. As with any technological revolution, the movement starts out messy and largely unproductive. If it sticks around, it settles into something genuinely valuable and positive-sum. We believe the settling point is a market where the long-tail bet is on a real founder and a real business, not just a ticker.

The Founder Economy Is Growing in America

Founders and inventors are the backbone of the global economy, with the bulk of successful startups originating from the US. The American capital formation framework incubates a new unicorn startup every two days and accounts for over half of all unicorns globally through a mix of proper regulatory oversight and legislation, all while fostering a national culture that supports risk-taking. September’s YC Demo Day showed the same thing every recent cohort has: enormous appetite among founders to access capital, and far more of them than the traditional pipeline can serve.

As we mentioned in the intro, a rather obvious but important point to note within the founder economy is the fact that AI tooling has dramatically collapsed the distance between an idea and an actual working product. Back in the day (yes, we’re calling 5 years ago "back in the day"), the founder lift required to launch a business was significant, requiring some mix of website designers, coding professionals, branding experts, legal handholding, software subscriptions, etc. In today’s reality, a simple pro subscription to Claude by Anthropic or running a local model can generate that same business output for a fraction of the cost.

Sourcing capital, for those outside VC circles, has quietly become a primary constraint for early-stage founders. Tokens provide a solution to this gap.

Why a Token?

This is a question we ask ourselves every day at Eon. Does this project need a token? What does the token do? How should the token be valued? It’s no mystery that investors and critics alike have begun to question the necessity behind many of the tokens that exist in the market (and rightfully so!). Tokenomic models for many of the projects launched within crypto are fundamentally flawed. Consider some of the failed models: pure governance tokens that hold no claim to the actual business outside of voting power, tokens that simply exist alongside a project with no alignment with product growth, tokens that rely purely on trading volume to fund a business (which creates obvious incentive misalignment we won’t get too much into here). As the pure novelty of a token has faded (we’ve written about this truth extensively), tokens need to be designed as efficient and effective mechanisms for value accrual, and they can be.

Blockchains give transparency to where tokens live and provide liquidity for owners. Traditional venture markets are high-friction and have seen little evolution since SAFEs became standard for startups. Blockchains provide the infrastructure for fully liquid markets for a token at any stage of a business’s life. If structured properly, blockchains can act as the contract layer, the settlement layer, and the liquidity layer. The transferability of tokens paired with smart contracts makes them programmable as well.

Imagine for a moment if AMZN shareholders got Prime for free. Or if Amazon sent free AMZN shares as a reward to their earliest users (crypto-natives call this an “airdrop”). The opportunities to create alignment with founders, employees, early users, and early investors using tokens are endless. An example of this playing out in real time is private inference platform Venice AI. Venice airdropped their VVV token to early adopters for free. This airdrop sparked a network effect among the Venice user base of brand loyalty and product distribution. Since then, registered users on the platform have increased eightfold.

Grass, the AI data sales enterprise, bootstrapped their network of users via the GRASS token launch and airdrop, using it as an incentive alignment tool to motivate individuals to lend their currently unused internet devices (IP addresses) to Grass in exchange for payment. This created an extremely efficient market between Grass and willing individual IP address providers that resulted in the team building a network of over 6 million devices across the world for data collection. As it stands today, Grass has grown to $75m in annualized revenue from pre-training data sales to AI labs.

Collector Crypt, a trading card gacha protocol, raised ~$2 million from its community in exchange for CARDS tokens in August 2025. This funding was used to seed a treasury of Pokémon cards, creating liquidity for the platform's underlying digital pack ripping mechanism. This raise was critical to bootstrap their treasury, which has grown in value twentyfold and supported over $1B in protocol volume.

We believe tokens will make phenomena like these seamless and commonplace for a myriad of businesses.

Regulatory CLARITY (pun intended)

We have written at length about the importance of the CLARITY Act as the true structural unlock for startup incubation on the blockchain; however, the CLARITY Act has failed the vote to pass the Senate. The SEC has begun issuing guidance on how it will regulate and treat digital assets, onchain finance, and tokenization of equities. This is laying the groundwork for a baseline understanding among agencies and businesses alike of how digital assets will be regulated within the United States. The SEC, together with the CFTC, has already drawn the distinction between a crypto asset and an investment contract involving one, and has begun defining a tailored offering path designed to bring token issuance onshore.

On August 18th, the SEC proposed Regulation Crypto Assets, which includes a "startup exemption" allowing token offerings of up to $5 million over a four-year period with no financial statements required, alongside an investment-contract safe harbor for tokens to exit securities status entirely once the issuer's essential managerial efforts have ceased. For projects raising up to $75 million in any 12-month period, there is a fundraising exemption with financial statements (audited above certain thresholds) and ongoing/semiannual reporting.

Token launch frameworks like this coming from regulators would give founders and investors something they've never had, assurance that they are operating within defined boundaries. Of course, legislation would make the framework durable and give true clarity to founders that the rules of the road won’t change when a new administration takes over. In its absence, regulators are building enough of the runway that serious structures can start to take shape.

Infrastructure Leading the Liquid Founder Markets Charge

Infrastructure is required to put these pieces together and align founders with investors. MetaDAO, rolled out last year, found traction as one of the first onchain venture-style token incubation platforms. Umia iterated on the framework and brought it to new blockchains with improvements to the futarchy governance mechanism and token ownership models. Founders can launch tokens as liquid representations of their businesses through Umia via an ICO-style initial auction on Uniswap's Continuous Clearing Auction (CCA), where market participants set a maximum willingness to pay and allow the market to settle on the agreed-upon price over the auction timeframe. For each token launched on the platform, Umia establishes a segregated portfolio inside an offshore Segregated Portfolio Company that encompasses all parts of the business and is fully owned by token holders.

Token holders govern the project's IP, operating team, and treasury under one entity whose decision-making authority is delegated to an onchain treasury contract. This model fits within the liquid founder markets thesis, enabling access to early-stage price discovery for investors and giving founders both access to global liquidity and a token that encompasses all the rights and ownership of their business.

Within the blockchain space lies the possibility for the liquid founder markets thesis to succeed at scale, giving founders the ability to raise capital for their business in a manner which is customizable and fits the needs of the specific company. Tokenomic models that work for one business might be completely inconceivable for another. A quick example of this is the breakaway success story of Hyperliquid and its HYPE token. The team made the bold (and smart) decision to direct nearly all revenue generated from the protocol into buying back HYPE, creating a flywheel where buy pressure on the native token increases hand-in-hand with protocol growth. While that model wouldn’t work for most startups that reinvest their revenue back into the business, case studies like Hyperliquid reflect the endless potential use cases of leveraging a token as the value accrual mechanism.

Tokens are not one-size-fits-all, just as startups are each unique. While there are benefits to liquidity and transparency from launch, many founders will find the idea of a publicly traded valuation and the additional communication expectations an unnecessary distraction from growing their business. Platforms like Umia allow for permissioned access to tokens during an initial period, for example 6 months of trade restrictions and whitelisted participant trading only. The programmability is there to iterate on and founders can get creative on how to structure and distribute their token.

How Does This Play Out?

One doesn’t have to squint very hard to see the buildup of investor appetite for a new asset class like liquid founder markets. Investors, if given a true opportunity to seed businesses and ideas they believe in at low enough valuations, will jump on the chance to be a part of success stories.

Predicting high-tier founder appetite is more nuanced. What types of founders will opt for managing a token, and when does it make sense to raise for a token on the blockchain vs. traditional venture markets? Founders further down the risk curve of business ideas will likely explore this route at first, especially those with direct crypto plug-ins for the business. It only takes a few breakaway success stories to show that, for many founders, a token raise can be a superior capital formation mechanism. As we like to say, one of the best ways to organically drive traction for a new product or service is the underlying asset appreciating alongside the growth of the underlying business.

The crypto market has experienced many cycles. Narratives come and go, with few ideas sticking around for the long haul. However, the primary ethos has remained centered around democratizing the ability for sovereign individuals to participate in environments where they are the sole decision makers behind their capital and are free to invest or speculate whenever and wherever they please. In the not-so-distant future, new businesses that capitalize on this opportunity will find funding and loyal customers, while investors will gain access to high-upside investment opportunities. Eon is excited to watch liquid founder markets come to life and participate in the growth of this emerging asset class.

This article reflects Eon Capital’s views as of October 1, 2026, and is provided for informational and discussion purposes only. It does not constitute personalized investment advice, legal or tax advice, or an offer to sell or a solicitation of an offer to purchase interests in any Eon Capital fund or any other security or digital asset. The discussion does not account for any reader’s investment objectives, financial circumstances, or risk tolerance.

As of publication, the Digital Innovation Fund (the “Fund”) holds positions in certain digital assets discussed in this article. The Fund has a financial interest in these assets, and Eon Capital and its principals may benefit economically from appreciation in the Fund’s holdings. This creates a conflict of interest that readers should consider when evaluating the article. The Fund may increase, reduce, or exit its positions, and subsequent investment decisions may differ from the views expressed here. The assets discussed are selected examples and do not necessarily represent the Fund’s entire portfolio.

Digital assets are speculative, highly volatile, and may lose their entire value. UMIA in particular is associated with an early-stage project and has limited trading liquidity; quoted prices may not reflect prices obtainable in an actual transaction. Relevant risks include project failure, dependence on founders or key personnel, smart-contract vulnerabilities, custody failures, market manipulation, and adverse legal or regulatory developments.

Unless otherwise indicated, factual information and figures are drawn from public sources believed to be reliable and speak as of the dates identified in the article. Information may be incomplete or subsequently change. Opinions, estimates, and expectations are subject to uncertainty, and actual developments may differ materially. No assurance is given regarding future prices, liquidity, project success, or legislative or regulatory outcomes. Readers should conduct their own evaluation and consult appropriate advisers before making investment decisions.