Odaily Planet Daily report: Michael Ippolito, co-founder of Blockworks, posted a lengthy article on X stating that the crypto industry is facing a "existential" token issue: the rate of token supply growth has significantly outpaced the value it creates, leading to diluted returns and a disconnect between price and fundamentals. According to data disclosed by DWF Labs, over 80% of projects are trading below their TGE levels, with most declining 50%-70% within three months, reflecting a structural selling pressure in the token market.
Michael Ippolito further noted that although the overall market cap remains relatively robust, the average value of individual tokens has weakened, declining by approximately 50% since 2021, with most tokens retracing about 80% from their peaks. Returns are concentrated among a few top assets, such as Bitcoin and Ethereum. Additionally, the correlation between token prices and on-chain revenue has significantly weakened—even as protocol revenues recover, prices have not followed suit, reflecting declining market confidence in tokens’ ability to capture value. Therefore, tokenomics must be repaired promptly; otherwise, the market will continue to concentrate further around top assets, undermining the broader ecosystem.