In line with Darius Moukhtarzade, a researcher at 21Shares, the outdated “token technique” is over, saying that launching excessive FDV, low float with governance “meme cash” not works.
Moukhtarzade defined that the primary purpose why token launches fail is the widening “hole between sentiment and fundamentals.” Nonetheless, fundamentals stay sturdy amid a rising world person base, elevated regulatory readability, elevated institutional participation, and a scalable infrastructure that helps long-term adoption.
Alternatively, market sentiment is extraordinarily detrimental. That is evidenced by excessive worry ranges, repeated failures of latest token technology occasions (TGEs), and dilution of capital on account of explosive development within the variety of tokens.
As well as, a shift in investor concentrate on AI and a deep-seated mistrust of the conduct of previous mining initiatives are additional dampening demand. This disconnect implies that even essentially sound initiatives battle to draw liquidity and curiosity, thus inflicting token launches to underperform regardless of macro tailwinds.
New token playbook
To deal with this, Mouktarzade proposed a framework that focuses on designing tokens in order that customers can earn extra revenue by holding them reasonably than promoting them straight away.
The framework emphasizes that many present fashions create a “race to the exit”, with holders competing to be the primary to promote, and as an alternative searching for alignment of groups, buyers, and customers to learn collectively as worth is constructed over time.
We additionally concentrate on tying the worth of a token to actual fundamentals corresponding to income technology reasonably than hype, distributing that worth on to holders (e.g. via income distribution), and treating possession as a participation within the development of the protocol, which means that long-term holding results in larger contributions and rewards.
Token launch standing
The 2025 token launch considerably underperformed. In line with the info, roughly 85% of initiatives are buying and selling beneath their TGE valuation, which means almost 4 out of 5 are within the purple. Solely 15.3% of the tokens are worthwhile.
In line with Moukhtarzade, regardless of the tailwinds within the business, there are some critical execution errors which are inflicting token launches to stagnate. Talking on the EthCC convention, 21Shares researchers defined that the massive downside is just too excessive pricing, with initiatives being launched at inflated FDVs with restricted circulating provide. This finally ends up making a mismatch between personal valuations and what the general public market needs to assist.
On the similar time, founder overconfidence typically causes groups to disregard broader market situations and launch into weak or bearish environments the place demand is already constrained. One other essential mistake is underestimating the promoting strain in token technology occasions, as airdrop recipients, early buyers, and liquidity suppliers are likely to revenue rapidly. This creates extra downward strain.
Additionally, many initiatives begin too early earlier than reaching product-market match or sustainable income, making the token a substitute reasonably than a complement to actual traction.
