99% of projects actually don't need a token.
Study Base, Arbitrum, LayerZero, and Wormhole (before the token launch), etc.
All amazing products – and they all function completely without a token (Base is still functioning and thriving).
But let me add another nuance.
There are obvious arguments for having a token (decentralization, governance, bootstrapping, liquidity, community building, etc.).
And these are undoubtedly important factors.
But in reality, and this is important to understand from a retail perspective, these factors are usually secondary to the main principle: it is much easier to attract capital/make a profit compared to traditional revenue models.
And many crypto products wouldn't be able to attract capital (and, consequently, create) if it weren't for this dynamic (since these businesses simply wouldn't be profitable enough just from revenues).
So do these products need tokens to function? No.
But does the industry depend on new tokens for innovation? Yes.
Obvious downsides: private > public market, token dilution, liquidity fragmentation, etc.
But the obvious upside is: more innovation, as teams can attract capital to build, and developers have an incentive to develop new products/dApps.
I would like to see more infrastructure products representing more interesting/dynamic token utilities – as we have seen in the DeFi market.