Blockworks Co-founder: Token value imbalance worsens, and if funds concentrate in top assets, it will weaken the industry ecosystem

Jinse Finance reported that Blockworks co-founder Michael Ippolito released an in-depth article stating that the crypto industry is facing a “survival-level” token issue: the growth rate of token supply has clearly outpaced the value it creates, leading to diluted returns and a decoupling of prices from fundamentals. According to data disclosed by DWF Labs, more than 80% of projects are priced below their TGE levels, with most projects seeing a decline of 50%-70% within three months, reflecting a structural sell-off pressure in the token market. Michael Ippolito pointed out that although the overall market capitalization remains relatively solid, the average value performance of individual tokens is weak—down about 50% compared to 2021—and most tokens have fallen about 80% from their highs, with returns concentrated in a few leading assets such as Bitcoin and Ethereum. In addition, the correlation between token prices and on-chain revenue has significantly diminished: even when protocol revenues rebound, prices do not rise in tandem, reflecting decreased market confidence in tokens’ value capture ability. Therefore, the token mechanism needs to be fixed as soon as possible, or the market will further concentrate towards leading assets, weakening the overall ecosystem.