Written by Tyler, Tally CRO

The CLARITY Act of 2025, scheduled to go to the U.S. House of Representatives for a vote tomorrow afternoon, unlocks a clear playbook for tokens to win as the new mechanism for capital formation and ownership. The CLARITY Act opens up a new playbook for raising capital via ICOs, governing networks with minimal bureaucracy, and returning value to tokenholders.

2025 will be remembered as the year tokens go mainstream.

Launching Tokens via ICOs Instead of Airdrops

Introduced in May and recently approved by the House Financial Services and Agriculture Committees, the CLARITY Act of 2025 explicitly defines digital assets—distinguishing “digital commodities” (like utility tokens) from securities—and allocates oversight between the SEC and CFTC. It creates a clear exemption path for token sales under $75 million and establishes unified rules for token issuers, exchanges, and custodians.

Here’s why I think ICOs are back—and a clear improvement over airdrops:

While both airdrops and ICOs distribute tokens, ICOs offer greater value to teams building long-term projects. ICOs raise capital; airdrops do not. Projects need funding to develop products, hire talent, and bootstrap liquidity, and ICOs provide a direct way to secure those resources from users who believe in the mission.

ICO participants have skin in the game. By committing capital, they become financially and emotionally invested, making them more likely to stay involved, participate in governance, and contribute to the ecosystem. Airdrops often fail to create this connection. Many recipients sell immediately or disengage, and even carefully designed eligibility systems struggle to prevent Sybil attacks or passive participation.

ICOs are starting to take off. On June 9, 2025, the Plasma project — a Bitcoin sidechain for stablecoins — saw its public sale vault on Echo’s Sonar platform overflow with $500 million in deposits within five minutes, oversubscribed 10× for a planned $50 million token sale. pump.fun, the Solana-based token launchpad, has also leaned into a new wave of public token sales. On July 12, 2025, it launched the PUMP token, a community-driven ICO that raised $600 million in 12 minutes.

Removing Unnecessary Bureaucracy from Governance

The CLARITY Act of 2025 finally enables streamlined decentralized governance. Under the Act, a decentralized governance system is any transparent, rules-based system where decisions are made collectively—not by a single person or group under effective control. This includes systems using public code, open participation, and distributed decision-making—meaning core contributors aren’t treated as part of a centralized entity unless they retain disproportionate control. We’re starting to see exciting examples of removing unnecessary bureaucracy from on-chain governance play out in practice:

• The Arbitrum Foundation released “A Vision for the Future of Arbitrum,” outlining its intent to empower Arbitrum-aligned teams (AAEs) to serve as delegates, vote on strategic decisions, and help execute operations collaboratively—demonstrating active core team involvement in governance.

• In June 2025, Morpho announced that its nonprofit arm (Morpho Association) would fully absorb Morpho Labs SAS, a for-profit entity, effectively merging equity control into the MORPHO token and aligning core team contributions directly with tokenholder interests.

• In his widely discussed essay, “The End of the Foundation Era in Crypto,” MilesJennings of a16z argues that core contributors should be empowered to engage directly in governance, product decisions, and resource allocation without hiding behind artificial legal entities.

Unlocking Token Value Accrual

The CLARITY Act of 2025 outlines clear mechanisms for token value accrual. The Act defines a "digital commodity" as a token intrinsically tied to its blockchain's operation or use and excludes such tokens from being treated as securities—so long as they meet criteria like peer-to-peer transferability and blockchain-based issuance.

The industry is responding quickly:

• Ethena’s governance proposed enabling a fee switch that directs a share of protocol revenue to sENA stakers, aligning token value with protocol usage. The Ethena Foundation approved the proposal, and the Risk Committee set clear milestone metrics (e.g., USDe circulation and revenue levels) before activation.

• A proposal in the Compound DAO aimed to direct 30% of protocol revenues to staked COMP holders. This was framed as “shareholder activism” —ensuring tokenholders receive returns in proportion to usage fees, much like shareholders in a traditional company.

• Uniswap’s DAO has voted on activating a fee switch granting part of swap fees to UNI tokenholders. A pilot proposal aims to implement a small fee (e.g., 10% of certain pool fees) to test its effect on liquidity and user impact. This enables value transfer from protocol usage to holders via on-chain governance.
  

The Bottom Line

The CLARITY Act of 2025 is the catalyst the industry’s been waiting for. It clears the legal fog around tokens, unlocking new ways to fund, govern, and scale blockchain-based systems. It’s not just about compliance — it’s about unleashing a better model for ownership. This is the moment the crypto ecosystem grows up. And it’s just getting started.

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