Svmuu News Blockworks co-founder Michael Ippolito published a lengthy post on the X platform, stating that the crypto industry is facing an "existential-level" token problem: the growth rate of token supply has significantly outpaced the value it creates, leading to diluted returns and a decoupling of price from fundamentals. According to data disclosed by DWF Labs, over 80% of projects are trading below their Token Generation Event (TGE) levels, with most experiencing a 50%-70% decline within three months, reflecting the structural selling pressure present in the token market.
Michael Ippolito further pointed out that while the overall market capitalization remains relatively robust, the average value performance of individual tokens is weak, having fallen by approximately 50% compared to 2021. Most tokens have retraced about 80% from their highs, with gains concentrated in a few top-tier assets like Bitcoin and Ethereum. Furthermore, the correlation between token prices and on-chain revenue has significantly weakened; even as protocol revenues recover, prices have not risen in tandem. This reflects declining market confidence in tokens' value-capture capabilities. Therefore, token mechanisms need to be repaired promptly; otherwise, the market will further concentrate towards top assets, weakening the overall ecosystem.