The Trust Gap Between Web3 and Traditional Finance

In April, Mantra's OM token dumped by more than 90%, going from $6.30 to less than $0.50 in only a few hours after $227 million worth of tokens were shifted to exchanges.

In April, Mantra's OM token crashed more than 90% in a matter of hours as $227 million of the tokens were moved to exchanges, impacting the price drastically from $6.30 to below $0.50.

The event sparked concerns over liquidity, potential insider trading, and the lack of transparency and accountability in the crypto market, especially in an instance of a large-scale token crash.

While the market is brimming with memecoins that hold no utility and a plethora of so-called utility tokens that seem to lack application in the real world, traders from organized financial systems are also skeptical of tokens that aren't compliant and sustainable. The market doesn't just need more tokens; it needs tokens that are safe, compliant, and easy to use.

The Trust Gap Between Web3 and Traditional Finance

The challenge isn't just technological; it's psychological. People who are accustomed to operating within frameworks that demand compliance, accountability, and performance metrics find it difficult to navigate a space where hype cycles and unverified claims reign supreme.

Even when a token claims to have utility, it's often minimal, doesn't integrate well with existing systems, or isn't linked to actual financial functions. Most utility tokens aren't connected to any regulated system, and most don't align with what professionals currently do - like trading, paying service fees, or accruing interest on a trustworthy platform.

This stands in the way of greater participation from individuals who bring expertise, capital, and interest in the market.

What Makes Utility Actually Useful?

For utility tokens to resonate with the mainstream audience, they need more than a whitepaper and a plan. They need:

A defined role within an already-existing financial system

Operations that are transparent and may be verified

Intrinsic reasons for adoption from the outset

Utility, in its purest form, should be improving something that already works, not an effort to make people abandon what they trust. It's not about building the highway from scratch; it's about making the on-ramp to Web3 smoother.

Where Structured Utility is Starting to Show

Some platforms are finally getting this right, creating a more natural extension of traditional finance by linking tokens to genuine financial systems - including trading platforms, brokerage services, and payment infrastructure.

For example, consider MultiBank Group and their $MBG coin. It isn't simply made for speculation; it's designed to integrate seamlessly with existing operations. Customers can use it to pay for services and get cashback, a routine activity in their daily financial practices. You can also stake the token for APY dividends, which encourages traders to engage for the long term rather than quickly selling out.

The interesting aspect is that it doesn't force people to change their habits; instead, it rewards them for what they already do.

Sustainable Models Need Sustainable Mechanics

Models that are meant to last for the long haul need sustainable mechanics. Utility isn't just about the features; it's also about the tokenomics that sustain the system's health in the long run. Some platforms are adopting deflationary elements like buybacks, burns, and capped supply to maintain balanced ecosystems and stable value over time, rather than overloading the market.

Those in the financial sphere are familiar with these strategies, and they bring a level of predictability that crypto often lacks.

In the case of $MBG, the strategy involves a $58.2 million repurchase and burn in the first year, with the goal of reducing the total supply by up to 50% over four years. These dynamics mirror the stringent supply-side tactics employed in traditional asset management.

A More Natural & Safer Way to Get into Web3

It's becoming clear that the future of finance won't be Web3 or traditional; it will be both. When tokens cooperate with current systems, contribute to regulated platforms, and provide genuine incentives, adoption becomes less about risk and more about the level of utility.

When the technology doesn't feel foreign but rather like an enhancement, it entices traders, investors, and financial experts to participate more readily.

The market is still quite noisy. But there is a quieter development unfolding beneath it. One where the appropriate type of utility may finally put those who were on the fence about joining more at ease.