This piece says crypto investing should be like a barbell: one end for real money (Bitcoin, Monero), the other for securities with cash flows, while most utility tokens in the middle are overvalued. Selkis is cautious on the market, favoring Bitcoin and Ethereum as monetary assets, plus Filecoin for its real use. He highlights Bitcoin as true money, Filecoin as a must-hold for storage, and warns most ICO tokens don't need to be held long-term.
Ryan Selkis, in Episode 98 of Invest Like the Best, proposed the "Crypto Barbell" strategy, categorizing tokens into two types: one is a store of value, like Bitcoin, and the other is a utility token, like Ethereum. He focused on discussing Token Curated Registries (TCR), arguing that this mechanism
Ryan Selkis, founder and CEO of Messari and former General Manager of CoinDesk, proposes a "barbell strategy" for cryptocurrencies: dividing crypto assets into true monetary types (e.g., Bitcoin, Monero) and security types (priced cash flows/assets), while the vast middle ground of "utility tokens"—including most ICO projects—"remain overvalued by several orders of magnitude", as most tokens simply do not need to be held long-term.
Selkis argues that crypto assets should be divided into two major categories, with the middle ground being a valuation trap.
Selkis proposes the "Crypto Asset Barbell" framework: on one end are true monetary crypto assets — Bitcoin, Monero, Zcash and other privacy coins, as well as Ethereum (which has become the reserve currency for ICOs). On the other end are crypto securities — digital versions of traditional securities that represent claims on assets or cash flows. He believes both ends can be priced using traditional valuation frameworks.
"In the middle, most so-called 'utility tokens' or 'consumer tokens' — even after the recent pullback — remain overvalued by several orders of magnitude. The reason is simple: for most of these tokens, you simply don't need to hold them for any period of time."
Selkis notes that many projects, after their ICOs, began redesigning their tokenomics in an attempt to make tokens "capture value" rather than merely allowing the technology to create value. He lists a few utility subcategories that may have value: compute/storage tokens (Filecoin, Golem) and "staking tokens" (such as Augur's prediction market tokens and Numerai's data scientist staking tokens).
Selkis provides a detailed explanation of how TCRs operate, arguing that they may solve the trust and certification challenges in the decentralized world.
The core idea of a TCR is to replace central authorities (such as universities or the SEC) with token incentives to maintain the quality of a "whitelist." Selkis uses university diplomas as an example: if the top 10 tech companies were to purchase tokens and vote to screen candidates, while curators receive application fees as rewards, a decentralized, economically valuable certification system could be created.
"If you let anyone into Harvard, a Harvard diploma is no longer worth anything. So the exclusivity of the list has always been important. The system's managers have strong economic incentives to only admit candidates who can increase the list's long-term value."
Selkis notes that real-world applications of TCRs include AdChain (verifying whether websites contain malicious ads) and Relevant (curating content). However, he also warns of risks: the initial distribution of tokens is critical; otherwise, the system may devolve into "unpredictable populism" — token holders might vote out of self-interest rather than to maintain list quality.
Selkis argues that the ICO market suffers from severe incentive misalignment, with the core problem being that token holders receive no substantive rights.
Selkis criticizes the typical terms of current ICOs: "The document says this is a donation, you have no rights, the token does not exist, and it will never exist." He believes the biggest structural issue is the absence of a lock-up period for venture capital: VCs receive tokens at 10% of the ICO price, and after three months, the price rises 20-fold. As fiduciaries, they are obligated to sell—but this 20-fold increase is not due to improvements in the project's fundamentals, but rather the signaling effect of "blue-chip brand investors."
"You are arbitraging your own brand."
Selkis proposes a litmus test for "whether tokens should be issued": Tokens must have a practical use case and should not be designed solely for speculation. He praises Token Foundry's approach in the Foam project—not certifying investors by wealth, but by "whether you will actually use this token." He also notes that Filecoin is one of the few projects that "got it right": the system requires holding Filecoin to prove that storage capacity has been committed, and it has a real-world benchmark (AWS).
Selkis positions Messari as the underlying data infrastructure for the crypto industry, with the core goal of driving standardized disclosure.
Selkis made it clear that Messari’s goal is not to be the "Bloomberg of crypto" — that is a more distant objective. "Before you can build Bloomberg, you need to build EDGAR." He describes Messari’s NOVA principles: Non-controversial, Objective, Verifiable, and Actionable. The first step is to track only black-and-white information: token supply management, team composition, legal jurisdiction, legal counsel, and verified website addresses.
"If you start with these, you can immediately identify 20% pure fraud and 20% best practices."
Selkis believes the biggest challenge is political: securing "critical mass" support from exchanges, funds, and underwriters. He acknowledges that the technology behind TCR is not complex, but the political dynamics of initial token allocation are extremely intricate — requiring enough "skin in the game" for participants while avoiding excessive concentration of power that could lead to premature centralization of the system.
Selkis is cautious about the future of AI and crypto integration, arguing that the industry needs to think more about "how to turn it off."
Selkis mentioned that within two days of the Augur prediction market going live, an "assassination market" targeting figures like Trump emerged, which he believes demonstrates the potential dangers of decentralized autonomous organizations. He worries that in 15–20 years, as blockchain replaces traditional financial markets, autonomous agents and DAOs could become "unstoppable forces."
"Who is developing the 'kill switch'? Who is thinking about how to truly control these innovations? Those are the people I want to work with."
He finds the pace of AI advancement astonishing (citing X.AI's AI assistant as an example) and argues that without addressing universal basic income (UBI), the combination of AI and crypto could lead to a "Mad Max"-style future.
| Position | Analyst Stance | Key Data |
|---|---|---|
| Bitcoin | Bullish (Currency Type) | Represents "true currency" |
| Monero | Bullish (Currency Type) | Representative privacy coin |
| Zcash | Bullish (Currency Type) | Representative privacy coin |
| Ethereum | Bullish (Currency Type) | Has become the "reserve currency" for ICOs |
| Filecoin | Bullish (Utility Exception) | Must hold tokens to prove storage capacity; has a real-world benchmark (AWS) |
| Augur | Neutral (Staking Token) | Prediction market; assassination market appeared within two days of launch |
| Numerai | Neutral (Staking Token) | Data scientists must stake tokens to "bet" on their model's performance |
| Civic | Risk Warning | Founder proactively disclosed: if sold immediately, equivalent to 33% inflation |
| AdChain | Neutral (TCR Case) | Verifies whether websites contain malicious ads |
| Relevant | Neutral (TCR Case) | Curates content |
| Foam | Neutral (TCR Case) | Issued by Token Foundry; authenticates investors based on usage intent rather than wealth |
1. "Crypto Asset Barbell" Framework (Selkis): Crypto assets are divided into currency-type (Bitcoin, Monero, Ethereum) and security-type (priced cash flows/assets). Utility tokens in the middle ground are "still overvalued by several orders of magnitude" — because most tokens simply do not need to be held long-term.
2. Token Litmus Test (Selkis): The sole criterion for issuing a token is "whether the token has actual utility, not just for speculation" — if the system can function without a token, it should not be issued.
3. Missing VC Lock-ups Is a Structural Problem (Selkis): VCs acquire tokens at 10% of the ICO price, see a 20x increase after three months, and as fiduciaries must sell — but this 20x is not driven by fundamental improvement, but rather "arbitraging their own brand."
4. The Core Challenge of TCR Is Political, Not Technical (Selkis): The initial token distribution determines everything — improper allocation leads to "unpredictable populism," where token holders may vote for self-interest rather than maintaining list quality.
5. "Build EDGAR First, Then Bloomberg" (Selkis): Messari's first step is to promote standardized disclosure (black-and-white information such as token supply, team, legal domicile), rather than building complex analytical tools.
6. NOVA Principle (Selkis): Non-controversial, Objective, Verifiable, Actionable — the first step is to track only black-and-white information, without subjective judgment.
7. 20% Fraud + 20% Best Practices (Selkis): Simply by examining basic information such as token supply management, team composition, and legal counsel, 40% of projects can be immediately distinguished.
8. "Who Is Developing the Kill Switch?" (Selkis): Decentralized autonomous organizations (e.g., Augur's prediction markets) may produce uncontrollable consequences (assassination markets). The industry needs more thought on "how to shut it down," not just focus on innovation.