Many investors approach native cryptocurrency tokens from major blockchains with the expectation that owning such coins equates to holding a slice of the blockchain's economic activity or governance, analogous to stock ownership in traditional markets. This expectation frequently results in misunderstandings around what owning tokens like XRP, Ethereum (ETH), or Solana (SOL) truly entails.
It is a fundamental misapprehension to assume that holding these native coins guarantees a direct share in the economic output of their respective blockchains or provides governance rights comparable to corporate stockholders. Such interpretations neglect the crucial differences in value distribution between cryptocurrency ecosystems and conventional equity models.
Most blockchains do not transfer the majority of the economic value generated on their platforms directly to coinholders as dividends or similar payouts. Instead, decentralized applications (dApps) operating on these chains often impose fees which are denominated in various forms — including their proprietary tokens, stablecoins, or alternative tokens — that do not consistently translate into continuous buying pressure or earning streams for holders of the native blockchain coin.
To illustrate, data from January 16 revealed that Ethereum accrued approximately $316,815 in chain-related fees over the prior 24 hours, alongside $15.3 million in application-level fees. Solana reported around $1 million in chain fees and about $12.1 million in application fees during the same interval. However, token holders of these blockchains do not receive direct portions of these fees, nor is there established industry anticipation for such payouts to be instituted.
This fee-to-holder disconnect indicates the absence of a traditional value capture mechanism, challenging investment theses predicated solely on the belief that elevated on-chain activity will lead to commensurate tokenholder returns.
Despite this, it would be premature to divest entirely from these assets on that reasoning alone. Rather than functioning like conventional equities, these cryptocurrencies exhibit characteristics more akin to a hybrid form comprising commodities, platform toll tokens, and monetary assets. Consequently, investors may realize returns through alternative channels.
Specifically, the return potential for investors in blockchain tokens can manifest through four principal mechanisms: reduction in token supply, rewards from staking, working capital demand by institutional users, and a potential monetary premium if a blockchain becomes the dominant venue for certain financial or smart contract activities.
Ethereum exemplifies these value capture mechanisms most clearly. Every transaction on Ethereum imposes a base fee that is "burned" — permanently removed from circulation. Although this mechanism does not function like a dividend in that no individual retains these fees, the aggregate effect over time reduces token supply, effectively enhancing each remaining coin's stake in the network's future utility.
Complementing fee burning, Ethereum's staking system allows holders to lock up tokens to support network security in exchange for yield payments. This arrangement constitutes an alternative income stream, enabling participants to earn from their holdings rather than merely possessing them passively.
Solana employs similar principles, where staking both incentivizes holders and supply reduction occurs through token burns, combining to create intertwined value capture avenues.
XRP, however, operates differently within this landscape. The XRP Ledger (XRPL) incurs transaction costs that are destroyed rather than rewarded to validators, precluding staking yields as a return mechanism. Additionally, the amount of XRP destroyed per on-chain activity is modest, limiting the impact of supply contraction over time.
Nevertheless, the XRPL incorporates a structural demand factor via reserve requirements. Users must maintain minimum XRP balances to fund accounts and specific ledger objects, creating a baseline holding necessity that induces persistent demand for XRP. If usage of the XRPL expands, this reserve-induced demand has the potential to increase accordingly.
Given these diverse and sometimes non-intuitive mechanisms, it is critical for investors to allocate capital in these cryptocurrencies with a clear understanding of how value accrues to token holders. Clarity on return drivers helps avoid misinterpretations that could lead to premature divestments or overestimated expectations of returns from native coin ownership.