The CLARITY Act's Maturity Pathway: How Digital Assets Transition from Securities to Commodities, and What It Means for Creator Tokenization
R Tamara de Silva
De Silva Law Offices LLC
Executive Summary: One of the most important innovations in the Digital Asset Market Clarity Act of 2025 (the "CLARITY Act") is the maturity pathway, a legal mechanism by which a digital token that begins its life as a security can transition to digital commodity status under the jurisdiction of the Commodity Futures Trading Commission (the "CFTC"). This article provides a detailed examination of the maturity pathway, its requirements, and its implications for digital asset projects. It then uses the emerging field of creator tokenization as a case study to test the pathway's limits, examining whether tokens tied to individual creators' efforts can realistically achieve the decentralization the pathway demands. The article concludes by proposing a structural approach, a multi-creator network model, that may offer a viable path forward for creator economy projects seeking to benefit from the CLARITY Act's framework.
PART I: THE MATURITY PATHWAY
Introduction: The Problem the Maturity Pathway Solves
For nearly a decade, the digital asset industry has struggled with a fundamental classification problem. When a team builds a blockchain network and sells tokens to fund its development, that initial sale typically meets the definition of a securities offering under the test established by the Supreme Court in SEC v. W.J. Howey Co., 328 U.S. 293 (1946). There is an investment of money in a common enterprise with an expectation of profits derived from the efforts of others. The "others" in this case are the founding team building the network.
But something unusual happens with successful blockchain projects. Over time, the network grows. Independent validators join. Open-source developers contribute code without any connection to the original team. Governance disperses across a community of token holders. The founding team's role diminishes. At some point, the network operates autonomously and no single entity controls it.
At that point, the rationale for treating the token as a security begins to erode. If no one's "efforts" drive the token's value because the network is genuinely decentralized, the Howey test may no longer be satisfied. But under existing law, there is no formal mechanism for a token to shed its securities classification. Once a security, always a security, at least as a practical matter. The SEC has never established a process for reclassification, and issuers have been left in legal limbo.
The CLARITY Act's maturity pathway is Congress's answer to this problem.
Key Definitions
Several terms are essential to understanding the maturity pathway.
A digital commodity under the CLARITY Act is a digital asset tied to a blockchain network that has achieved sufficient decentralization or full functionality. Digital commodities are not securities. They are regulated by the CFTC rather than the Securities and Exchange Commission (the "SEC"). Bitcoin and, under this framework, likely Ether would be classified as digital commodities.
An investment contract asset is a digital asset that was originally sold as part of an investment contract but that the Act treats as legally distinct from the investment contract itself. This is a significant conceptual innovation. The Act draws a line between the transaction (the investment contract, which is a security) and the thing sold in that transaction (the token, which is a separate asset). The token is not the security. The deal is the security.
A mature blockchain system is a blockchain network that has met the CLARITY Act's standards for decentralization and operational independence. The specific criteria will be established through joint rulemaking by the SEC and CFTC, but the Act identifies baseline factors. These include whether the network operates independently from any single person or coordinated group, whether validators or miners are broadly distributed across unaffiliated parties, whether the network's source code and transaction history are publicly accessible, and whether the network is reliably functional for its intended purpose.
The maturity pathway is the process by which a token that began life as an investment contract asset transitions to digital commodity status upon the underlying network achieving mature blockchain system status.
How the Maturity Pathway Works
The maturity pathway is not automatic. It is a structured, multi-phase process with obligations at each stage.
Phase One: The Initial Distribution
A project begins by issuing tokens. If the tokens are sold in a manner that constitutes an investment contract, that initial distribution is a securities transaction. There is no way around this under the CLARITY Act. The Act does not eliminate the securities classification for initial offerings. Instead, it provides a tailored exemption.
Section 202 of the Act creates an exemption from full SEC registration for issuers who meet specific conditions. The issuer must file public disclosures with the SEC that are comparable to those required in a Regulation A+ or crowdfunding offering. These disclosures must include information about the project, the development team, the technology, the risks, the use of proceeds, and the rights attached to the tokens. The issuer must also commit to a specific timeline for achieving mature blockchain system status. This timeline is a binding obligation, not a vague aspiration.
During this initial phase, the token is an investment contract asset. It is subject to SEC oversight. The issuer must file periodic reports, and certain insiders are subject to trading restrictions analogous to the lock-up provisions and volume limitations that apply to insiders of publicly traded companies.
Phase Two: The Transition Period
After the initial distribution, the project enters a transition period during which it must make demonstrable progress toward decentralization. The Act does not specify exactly how long this period lasts. It will depend on the timeline the issuer committed to in its disclosure filings and on the rulemaking criteria the SEC and CFTC establish.
During the transition period, the issuer continues to file reports with the SEC. The token trades on the secondary market, but because it has not yet achieved commodity status, secondary trading is governed by the Act's framework for investment contract assets. Section 203 of the Act clarifies that secondary market transactions in these tokens are not themselves securities transactions, which is an important distinction. It means that ordinary buyers and sellers on the secondary market are not conducting unregistered securities offerings every time they trade. But the platforms facilitating those trades and the issuer's disclosure obligations remain subject to SEC jurisdiction.
Section 204 imposes insider trading protections during this period. Digital commodity related persons and affiliated persons, essentially founders, executives, large holders, and their associates, face lock-up periods and volume limitations on their token sales. They must also disclose their transactions publicly. These restrictions ease progressively as the network approaches maturity, reflecting the diminishing influence of insiders as decentralization increases.
Phase Three: Certification of Maturity
When the project believes its network has achieved sufficient decentralization, the issuer (or its successor, or a designated representative) files a certification with the SEC. This certification must demonstrate that the network meets the criteria for a mature blockchain system. The specific benchmarks will be defined through rulemaking, but the Act's text indicates that they will include decentralization of control, broad distribution of validators, public accessibility of the network, and operational independence from any single entity.
Once the SEC processes the certification and the network is recognized as a mature blockchain system, the transition occurs. The token is reclassified as a digital commodity. SEC jurisdiction over the token's secondary market trading gives way to CFTC jurisdiction. The issuer's obligation to file periodic reports with the SEC ends, although the Act requires continued disclosure of any significant ongoing activities that affect the network or the asset even after maturity is certified.
Phase Four: Life as a Digital Commodity
After maturity, the token trades as a digital commodity under CFTC oversight. Platforms hosting secondary trading must register with the CFTC as Digital Commodity Exchanges, Digital Commodity Brokers, or Digital Commodity Dealers, depending on their role. These intermediaries are subject to market integrity rules, customer asset segregation requirements, anti-money laundering obligations, and membership in a registered futures association such as the National Futures Association (the "NFA"). The regulatory framework is real and substantive, but it is structurally distinct from the SEC's securities regime. There is no need for the token to be registered as a security. There is no need for the exchange to operate as a broker-dealer or an Alternative Trading System under FINRA. The compliance architecture is different.
This is the destination the maturity pathway promises: a token that began as a security, offered under investment contract principles, can become a freely tradable digital commodity regulated under a framework designed for that purpose.
Why the Maturity Pathway Matters
The significance of the maturity pathway extends well beyond regulatory convenience. It addresses a genuine economic reality. A token sold to fund a nascent network is, at that early stage, an investment driven by trust in a founding team. But a token representing a stake in a fully decentralized, autonomous network is something categorically different. It is closer to a commodity, a fungible, functional unit within a self-sustaining system, than it is to a share of stock in a company.
By creating a legal process for this transition, the CLARITY Act acknowledges that digital assets are not static. They evolve. The regulatory treatment should evolve with them. This is a significant departure from the existing approach, under which the SEC's classification of a token at the moment of its initial sale tends to follow it indefinitely, regardless of how the network changes.
The maturity pathway also creates a powerful incentive for decentralization. Projects that want the benefits of commodity classification must actually decentralize. The timeline commitment, the periodic reporting, and the certification process ensure that this is not merely aspirational. It is a measurable, enforceable obligation.
But the pathway has inherent limitations. It is designed for a specific kind of digital asset: a protocol token whose value derives from a decentralized network's functionality, not from any single entity's ongoing efforts. Not all tokens fit this mold. This brings us to a revealing test case.
PART II: CREATOR TOKENS AS A CASE STUDY
The Rise of Creator Tokenization
The creator economy is large and growing rapidly, with some estimates placing it above $250 billion globally. Musicians, visual artists, game developers, writers, podcasters, and influencers are increasingly exploring tokenization as a way to monetize their work, raise capital, and build deeper relationships with their audiences. Blockchain technology offers creators the ability to issue digital tokens representing some form of economic or social interest tied to their creative output, and to make those tokens tradable on secondary markets.
Several models have emerged. Revenue share tokens give holders a fractional claim on a creator's future earnings, such as streaming royalties or advertising income. Access tokens function as digital memberships, granting holders exclusive content, community access, or direct interaction with the creator. Social and community tokens represent a form of social capital, offering voting rights, governance participation, or recognition within a creator's community. Intellectual property fractionalization tokens give holders ownership stakes in specific creative works or portfolios of works. And builder tokens are issued by development teams to fund the construction of creative tools, platforms, or protocols.
The appeal of the CLARITY Act's maturity pathway to these projects is obvious. If a creator token could transition from a security to a digital commodity, it would trade under a lighter regulatory framework, the platforms hosting it would face simpler licensing requirements, and the ongoing compliance burden for both the creator and the platform would decrease significantly. The question is whether creator tokens can actually make this transition.
The Decentralization Problem for Creator Tokens
The maturity pathway requires the underlying network to achieve sufficient decentralization. For protocol tokens, this is conceptually straightforward, even if practically difficult. The founding team builds the network, distributes governance to the community, opens the source code, ensures that validators are broadly distributed, and steps back. The network eventually runs on its own.
Creator tokens face a fundamentally different situation. Consider a musician who tokenizes a percentage of her streaming royalties. The value of those tokens depends entirely on whether the musician continues to make music that generates income. It does not matter how decentralized the blockchain is, how many validators secure the network, or how widely the tokens are distributed. If the musician stops recording, the tokens lose their value. She is an irreducible central point of dependency.
The same problem appears across the other creator token models, in varying degrees. Access tokens depend on the creator continuing to produce the content that makes the access valuable. Social tokens derive their worth from the creator's ongoing participation in and attraction of the community. IP fractionalization tokens depend on the commercial exploitation of specific works, which is typically controlled by the rights holder. In each case, the token's value is anchored to an identified individual's efforts.
This is precisely the characteristic that the Howey test identifies as the hallmark of a security: an expectation of profits derived from the efforts of others. And it is precisely the characteristic that the maturity pathway is designed to eliminate through decentralization. A protocol can decentralize away from its founders. A creator token cannot decentralize away from its creator. The person is the point.
This does not mean that all creator token projects are poorly conceived. It means that the CLARITY Act's maturity pathway, in its current form, was not designed for them. The pathway solves a specific problem, the transition from centralized founding team to decentralized network, and most creator tokens do not present that problem because the centralization is not a phase to be outgrown. It is a permanent feature of the asset.
The Protocol Layer and the Asset Layer
Understanding why the maturity pathway does not automatically extend to creator tokens requires distinguishing between two separate layers of a tokenized system.
The first is the protocol layer. This is the infrastructure: the set of smart contracts, governance mechanisms, and technical systems that allow tokens to be issued, communities to form, and transactions to occur. A tokenization platform's own protocol can, in principle, be built to decentralize over time. Its governance can be distributed across token holders. Its smart contracts can operate autonomously. Its source code can be open and publicly maintained.
The second is the asset layer. These are the individual tokens issued on the protocol, each representing a specific economic interest tied to a specific creator or project. A musician's royalty token, a filmmaker's IP share, a YouTuber's access pass: these are all assets issued on the protocol, but they are not the protocol itself.
It is possible for the protocol layer to decentralize while the asset layer does not. A tokenization platform could achieve mature blockchain system status for its own governance token, transitioning that token to digital commodity status under CFTC jurisdiction. But the individual creator tokens issued on that platform would retain their own regulatory classification, which depends on their own characteristics, not the platform's. A royalty-sharing token does not become decentralized merely because it was issued on a decentralized protocol. The protocol's maturity and the asset's maturity are independent questions.
This distinction has real consequences. A platform builder might successfully walk the maturity pathway for the platform's own token while simultaneously hosting thousands of creator tokens that remain securities. The two regulatory regimes would coexist on the same infrastructure.
PART III: A POSSIBLE PATH FORWARD
Designing Creator Tokenization Around the Maturity Pathway
The analysis above identifies a structural mismatch between the maturity pathway and most creator token models. But it would be a mistake to conclude that the CLARITY Act offers nothing to the creator economy. The Act's framework, properly understood, can inform a more thoughtful approach to creator tokenization. The key is to design the project's architecture with the pathway's requirements in mind from the beginning, rather than trying to force existing models into a framework that was not built for them.
What follows is a hypothetical structural approach. It is not legal advice for any specific project, and its viability will depend on facts and circumstances that vary from case to case, as well as on the rulemaking criteria that the SEC and CFTC have not yet established. But it illustrates how a project might be structured to align more closely with the CLARITY Act's logic.
The Multi-Creator Network Model
The fundamental problem with single-creator tokens is that the value depends on one person. The most direct way to mitigate this problem is to build a network where value is generated by a broad and growing ecosystem of creators rather than any individual.
Imagine a protocol, built on a high-performance blockchain like Solana, that provides infrastructure for creator tokenization. The protocol allows any creator to issue tokens, build a community, and monetize their work. But instead of each creator operating in isolation, the protocol itself has a native token that represents a stake in the network as a whole. This protocol token does not derive its value from any one creator. It derives its value from the aggregate activity on the network: the total number of creators, the total transaction volume, the network effects that emerge as the ecosystem grows, and the governance rights that allow token holders to shape the protocol's development.
The protocol is designed from inception with a decentralization roadmap. At launch, a founding team builds and maintains the core infrastructure. Over time, governance transitions to the community of protocol token holders. Smart contract upgrades require community votes. Protocol parameters, such as fee structures and listing standards, are set through decentralized governance. The source code is open. Validators are independent and broadly distributed. Eventually, the founding team's role becomes indistinguishable from that of any other participant.
If this protocol reaches maturity under the CLARITY Act's criteria, its native token could transition to digital commodity status. The protocol token would then trade under CFTC jurisdiction. This is the protocol layer achieving the maturity pathway's promise.
Structuring Creator Tokens for Compliance Within the Network
The individual creator tokens issued on this protocol are a separate matter. As discussed, most creator tokens whose value derives from a specific individual's efforts will likely remain securities. But the way those tokens are structured can significantly affect their regulatory profile and the compliance burden they carry.
One approach is to structure creator tokens primarily as access and utility instruments rather than as profit-sharing mechanisms. A token that grants the holder access to a creator's community, exclusive content, or participation in governance over the creator's future projects looks more like a functional product than an investment contract. The more the token's value comes from what it does (unlock access) rather than what it pays (distribute profits), the weaker the Howey analysis becomes.
This is not a guarantee of non-security status. The SEC has been skeptical of utility token arguments, particularly when tokens trade on secondary markets at prices that fluctuate with the creator's popularity. But a token that is genuinely designed for consumption rather than investment, and that is marketed accordingly, stands on stronger ground than a token that promises a share of future revenue.
For creator tokens that do constitute securities, whether because they involve revenue sharing, IP fractionalization, or some other profit-dependent structure, the CLARITY Act's Section 202 exemption provides a viable issuance pathway. Creators can issue tokens under this exemption by filing the required disclosures, committing to a timeline (even if maturity may not be achievable for the individual token), and complying with insider trading restrictions during the initial period. Alternatively, existing exemptions such as Regulation D for accredited investors, Regulation A+ for broader offerings up to $75 million, and Regulation Crowdfunding for smaller raises remain available and may be more appropriate depending on the size and nature of the offering.
The Combined Architecture
The result is a two-tier system that works with the CLARITY Act rather than against it.
At the protocol level, the platform operates a decentralized network whose native token can walk the maturity pathway. This gives the protocol itself the benefits of digital commodity status: CFTC jurisdiction, lighter ongoing compliance for the protocol token, and the ability to list the protocol token on Digital Commodity Exchanges without broker-dealer registration.
At the asset level, individual creator tokens are issued in compliance with securities law, using either the CLARITY Act's Section 202 exemption or existing Regulation D, A+, or crowdfunding exemptions. The platform builds securities compliance tooling into its infrastructure so that creators can issue tokens lawfully without needing to independently navigate the registration process. Disclosure templates, accreditation verification, reporting automation, and insider trading compliance can all be embedded in the protocol's smart contracts and user interface.
Where creator tokens are structured as genuine access or utility instruments with minimal profit expectations, they may avoid securities classification entirely, but this determination must be made carefully on a case-by-case basis with qualified legal counsel.
Secondary trading in creator tokens that remain securities would occur on platforms registered with the SEC, such as broker-dealers operating an Alternative Trading System. This could be a separate module of the same platform or a third-party marketplace. The platform would need the appropriate licensing, but the CLARITY Act's DeFi exemptions under Sections 309 and 409 could reduce the registration burden for components of the system that are genuinely non-custodial and decentralized.
Why This Model Is Stronger
This approach is stronger than attempting to force creator tokens through the maturity pathway for several reasons.
It is honest about what creator tokens are. Revenue shares and IP interests are investment products. Treating them as such from the outset, and building compliance into the platform rather than hoping for a future reclassification that may never come, reduces enforcement risk and builds trust with regulators.
It takes advantage of the CLARITY Act where the Act is actually helpful. The protocol token benefits from the maturity pathway. The DeFi exemptions protect the decentralized components of the system. The Section 202 exemption simplifies the issuance process for creator tokens that are securities. The Act provides tools at each layer. The mistake is treating all layers as one.
It creates network-level value that can genuinely decentralize. A single creator's token cannot escape dependency on that creator. But a protocol serving thousands of creators generates value through network effects, aggregated transaction volume, and community governance that transcends any individual participant. That is the kind of value the maturity pathway was designed to recognize.
And it provides a defensible contingency if the CLARITY Act does not pass or is materially amended. Because the creator tokens are structured for securities compliance from the start, the project does not collapse if the maturity pathway is eliminated or narrowed. The securities framework works regardless of what happens in the Senate. The maturity pathway is an upside, not a dependency.
Practical Considerations
Several practical points are worth emphasizing for projects considering this space.
The maturity test criteria do not yet exist. The CLARITY Act directs the SEC and CFTC to define the specific benchmarks for mature blockchain system status through joint rulemaking. Until those rules are published, no one knows exactly what sufficient decentralization will require. Projects should build toward the general principles outlined in the Act while remaining flexible enough to adapt to the final rules.
The CLARITY Act is not yet law. The House passed the bill in July 2025, and the Senate Agriculture Committee advanced a companion bill in January 2026. But the Senate Banking Committee has delayed its markup, and significant disagreements remain, particularly around stablecoin yield provisions and DeFi treatment. Building an entire business model on pending legislation is inherently risky. Projects should ensure they have a viable path under existing law even if the CLARITY Act never passes.
State law adds complexity. Several states, including Illinois with its recent Digital Assets and Consumer Protection Act (SB 1797), are implementing their own digital asset regulatory frameworks. Federal preemption under the CLARITY Act is not yet settled, and projects serving users in multiple states must account for overlapping compliance obligations.
AI and algorithmic features in tokenization platforms carry independent regulatory risks. The SEC has made AI-related misrepresentations, sometimes called "AI washing," a priority enforcement area. Platforms that use artificial intelligence for pricing, curation, or recommendation of creator tokens must ensure their marketing claims about AI capabilities are substantiated and accurate.
Finally, anti-money laundering compliance is not optional. The CLARITY Act explicitly applies the Bank Secrecy Act to digital commodity intermediaries, requiring know-your-customer procedures and suspicious activity reporting. Creator tokenization platforms must build AML/KYC infrastructure regardless of whether their tokens are classified as securities or commodities.
Conclusion
The CLARITY Act's maturity pathway is a genuinely important legal innovation. It provides, for the first time, a statutory mechanism by which a digital asset can transition from securities regulation to commodity regulation as the underlying network decentralizes. For protocol tokens, this pathway offers a clear and compelling destination.
For creator tokens, the picture is more complex. Most creator tokens carry an inherent dependency on a specific individual's efforts that cannot be decentralized away through network maturity. Revenue shares, IP interests, and personality-driven community tokens are, by their nature, centralized around a person. The maturity pathway was not designed for this kind of asset, and attempting to use it without acknowledging this mismatch creates regulatory risk.
But the CLARITY Act, taken as a whole, offers useful tools for creator tokenization when applied thoughtfully. A multi-creator network model can separate the protocol layer, which can decentralize, from the asset layer, which may not. Creator tokens can be issued in compliance with securities exemptions, and platforms can embed compliance tooling that makes this process accessible to creators without legal expertise. Access and utility tokens can be designed to minimize securities characteristics. And the protocol's own token can pursue digital commodity status through the maturity pathway while the creator tokens it hosts follow their own appropriate regulatory path.
The opportunity in creator tokenization is real. So are the legal complexities. Projects that approach both with clarity will be best positioned to build sustainably as this regulatory framework takes shape.
This firm will continue to monitor and analyze the CLARITY Act as it advances through the Senate and into rulemaking, with particular attention to the maturity pathway criteria and their implications for emerging tokenization use cases.
NB This information is provided as a service to clients and friends for educational purposes. It should not be construed or relied on as legal advice or to create a lawyer-client relationship. Readers should not act upon this information without seeking advice from a legal professional.