Remember initial coin offerings? In 2017, this new, democratized fundraising paradigm took the world by storm. Everything was being “tokenized”, and people were raising eye-watering sums of money with, in many cases, nothing but an idea. In 2017, over $6 billion was raised through the method; more than that entire amount was raised in the first three months of 2018. At certain points, it seemed like anyone with a startup concept - even those tied tenuously at best to distributed ledger technology - was doing an ICO.

Of course, the mania couldn’t last forever. Less than a billion dollars was raised in the last four months of 2018 combined, and 2019 so far saw less than $30 million, according to the website icodata.io. Those who all along declared crypto nothing more than a new tulip bubble believe the market has vindicated them. But it isn’t so simple; blockchain technology has years of expansion ahead of it, and tokens will have a role to play.

The problem with the ICO craze wasn’t that tokens are a bad idea or that blockchain is a scam. It was that the hype so outpaced the stage which the technology had reached as to make a hard landing inevitable. Many people have pointed out that very few blockchain platforms, even now, are actually operating and have customers or user bases. Many of the projects that raised money through ICOs in 2017 and 2018 failed. But the fact that they rode the crest of a once-in-a-lifetime wave for a while, before crashing into the shore, doesn’t invalidate the whole technological-financial concept behind tokens.

The same laws of gravity apply to businesses in the blockchain space as anywhere else: you need to be solving a real problem, and you need a real product, a real team, and a real plan to achieve growth. Many ICO projects had none of these. But a number of teams are hard at work developing products and platforms in a methodical, systematic way. These businesses have all the markers of traditional startups, and they are entering verticals that need the solutions they offer. And they use tokens.

Two types of tokens will begin to gain traction as 2019 progresses: utility tokens and security tokens. These two designations are not mutually exclusive: a single token can be both a utility and a security. But gone will be the days when founders try to contrive utilities to avoid regulatory red tape. This new generation of blockchain entrepreneurs is committed to doing things the right way, and that means two things. A utility token should only be built if it provides a genuine benefit to the platform in terms of access, governance, or user experience. And a token that is a security will be registered as such and provide clear benefits to holders. Over time, security tokens stand a good chance of becoming accepted parts of the capital stack, just like debt and equity.

What sorts of benefits will these tokens offer? In the case of utility tokens, they may act as “membership cards” that allow holders to participate in a system. Holding more tokens may confer more governance rights and greater responsibility. Platforms like Wikipedia and Reddit, which rely on forms of “super users” to maintain standards of content and conduct, are examples where such tokens could function effectively.

Security tokens, meanwhile, can offer benefits to shareholders - such as a portion of company revenue - in ways that weren’t possible before the advent of the blockchain. These tokens, when the proceed from robust companies driven by strong founding teams, have the potential to offer all of the benefits of traditional equity shares as well as new technological benefits in security and efficiency. The recent announcement by JPMorgan, a titan of the financial establishment, that it has launched its own JPM Coin for payments underscores the seriousness of this potential. Far from being dead, tokens are just getting started.

Sean Medcalf is co-founder and managing partner of Angle42, which provides strategic advice and communications support to early-stage companies in emerging technology sectors.