Tokens lack the ability to compound value like traditional equity. The author argues that while equities grow through reinvestment of earnings, leading to increased intrinsic value, tokens simply redistribute fees without reinvesting them into the underlying network. For example, a business can take $5 million in free cash flow, reinvest it, and grow it to $82 million over 20 years through smart management. In contrast, a protocol generating $5 million in fees distributes those fees to token holders, and the cycle resets without reinvestment. The legal framework around tokens also plays a significant role in their lack of compounding. In an effort to avoid being classified as securities, tokens were designed to have no claims on cash flows or retained earnings. This means that token holders receive a floating yield based on network usage, resembling bonds rather than equities. The author points out that while price volatility may create the illusion of ownership akin to equity, the underlying economic structure reflects fixed-income characteristics. The author contrasts two wealth creation models: the power law of timing in crypto, where early investors can profit if they sell at the right moment, versus the power law of compounding in equities, which rewards long-term ownership. He emphasizes that crypto markets favor traders, while equities reward owners. This disparity highlights why many investors are shifting towards crypto-linked equities instead of tokens, as they seek the stability and compounding potential that traditional investments offer.