BroadChain has learned that on April 5, Michael Ippolito, co-founder of Blockworks, warned that the crypto industry is grappling with a "survival-level" token problem. The growth in token supply has significantly outpaced the creation of real value, leading to diluted returns and a growing disconnect between price and fundamental value.
Data from DWF Labs reveals that over 80% of projects are trading below their Token Generation Event (TGE) prices, with most shedding 50%–70% of their value within three months. This points to persistent structural sell-side pressure in the token market.
Ippolito further noted that while the overall market capitalization has held relatively steady, the average value per token has weakened considerably. Since 2021, the average token value has fallen by roughly 50%, with most down about 80% from their all-time highs. Returns have become highly concentrated in a handful of top-tier assets like BTC and ETH.
Furthermore, the correlation between token prices and on-chain protocol revenue has notably deteriorated. Even when protocol revenues recover, prices often fail to follow, reflecting waning market confidence in tokens' ability to capture value. Ippolito argues that token mechanisms urgently need repair; otherwise, capital will continue to flow toward top-tier assets, weakening the broader ecosystem.