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 message. On April 5 (UTC+8), Blockworks co-founder Michael Ippolito posted a long article on the X platform, saying that the cryptocurrency industry is facing a “survival-level” token problem: the growth rate of token supply has clearly exceeded the value it creates, resulting in diluted returns and a decoupling of price from fundamentals. According to data disclosed by DWF Labs, more than 80% of projects are priced below their TGE levels, and most have fallen by 50%-70% within three months, reflecting that the token market’s sell-pressure structure is persistent. Michael Ippolito further pointed out that although the overall market value remains relatively stable, the average value performance of individual tokens is weak: it is down about 50% compared with 2021. Most tokens are down about 80% from their highs, and returns are concentrated in a small number of top assets, such as Bitcoin and Ethereum. In addition, the correlation between token prices and on-chain revenue has noticeably weakened. Even if protocol revenue rebounds, prices do not rise in sync, 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; otherwise, the market will further concentrate toward top assets, weakening the overall ecosystem. (Source: ODAILY)