Blockworks Co-founder: The growth rate of token supply has significantly exceeded the value it creates, leading to diluted returns and a decoupling of price from fundamentals.

ME News Report, April 5th (UTC+8), Blockworks co-founder Michael Ippolito posted a long article on the X platform stating that the cryptocurrency industry is facing a “survival-level” token problem: the supply growth of tokens has significantly exceeded the value they create, leading to diluted returns and a decoupling of price from fundamentals. According to data disclosed by DWF Labs, over 80% of projects are priced below their TGE (Token Generation Event) levels, with most dropping 50%-70% within three months, reflecting a structural sell pressure in the token market. Michael Ippolito further pointed out that although the overall market capitalization remains relatively stable, the average value of individual tokens is weak, down about 50% compared to 2021, with most tokens retracing approximately 80% from their highs. Returns are concentrated in a few top assets, such as Bitcoin and Ethereum. Additionally, the correlation between token prices and on-chain revenue has significantly weakened; even when protocol revenue rebounds, prices do not rise in tandem, reflecting a decline in market confidence in the ability of tokens to capture value. Therefore, token mechanisms need to be repaired as soon as possible, or the market will further concentrate on top assets, weakening the overall ecosystem. (Source: ODAILY)