Blockworks Co-Founder: Token Value Imbalance Intensifies, Concentration of Funds in Major Assets Will Weaken Industry Ecosystem

Michael Ippolito, co-founder of Blockworks, published a lengthy article stating that the cryptocurrency industry is facing a ‘survival-level’ token issue: the growth rate of token supply has significantly outpaced the value created, leading to diluted returns and a disconnection between prices and fundamentals. According to data disclosed by DWF Labs, over 80% of projects are priced below their Token Generation Event (TGE) levels, with most experiencing a 50%-70% drop within three months, reflecting a structural selling pressure in the token market. Ippolito pointed out that although the overall market capitalization remains relatively robust, the average value performance of individual tokens is weak, having dropped about 50% since 2021, with most tokens retracting about 80% from their peaks. Returns are concentrated in a few major assets, such as Bitcoin and Ethereum. Furthermore, the correlation between token prices and on-chain revenue has significantly weakened; even when protocol revenues rebound, prices have not risen in tandem, reflecting a decline in market confidence regarding the ability to capture token value. Therefore, it is imperative to quickly repair token mechanisms; otherwise, the market will further concentrate on major assets, weakening the overall ecosystem.