Analysis: Tokenized securities can unravel quickly as market conditions change

When tokens and equity coexist, most of a company’s real cash earnings ultimately accrue to equity holders, meaning token market capitalizations should generally be smaller and market expectations should remain restrained, analyst Ceteris said at a Delphi Digital roundtable, according to Wu Blockchain. Ceteris added the problem is that many projects exploit the ambiguity between the two structures to push token valuations far above appropriate levels. Yan Liberman, co-founder of Delphi Digital, added token structures can be useful when markets are strong, but they can quickly unravel once business conditions deteriorate or shareholders try to cash out.