Governance tokens are beginning to distribute cash flows to holders, and this trend is sparking heated discussions across the entire network. Many believe this is the ultimate form of token empowerment—after all, who doesn't love receiving real returns?

But here’s the problem. When a token evolves from a simple "voting credential" into a "sharing right of protocol revenue," what does it touch upon? The Howey Test. This is the core standard for judgment under U.S. securities law. Once a token is deemed to have security characteristics, the consequences are obvious.

What is the current approach? Using workaround methods like bribery and buybacks to indirectly return income from protocol-generated interest, liquidation penalties, and other revenues to holders. It sounds clever, but in reality, it’s dancing on the edge of regulation. More critically, as migration to the codebase of a well-known stablecoin protocol and deeper integration of RWA (Real World Assets) accelerate, the entire protocol’s financial attributes are rapidly intensifying.

Imagine a scenario: if regulators someday determine that the current dividend distribution model essentially constitutes an "unregistered security," then every dividend paid out would become evidence in court. Investors, while enjoying the pleasure of discounted cash flows, must factor this risk into their valuation models. This is not just about price volatility—it’s a matter of whether the protocol itself faces forced delisting or hefty fines, life-or-death issues.

So the real question is: the returns are indeed there, but at what cost?