Binance: Discussion on the Report on the Mutual Bull Market
1. In recent months, the prevalence of high-valuation and low-initial circulation tokens has been a topic of discussion in the crypto community. This stems from concerns that such a market structure leaves little room for sustainable upside for traders after the token generation event ("TGE").
2. Data from CoinMarketCap and Token Unlocks confirm the growing trend of low circulation and high-valuation token issuance. It is worth noting that tokens worth approximately US$155B are expected to be unlocked between 2024 and 2030. If buyer demand and capital flows do not increase accordingly, a large number of tokens entering the market will bring selling pressure.
3. Factors such as the influx of private market capital, aggressive valuations, and optimistic market sentiment have contributed to the trend of high fully diluted valuation ("FDV") token issuance.
4. The current market setting makes it necessary for investors to be selective and discerning by considering fundamental aspects of the project, such as token economics, valuation, and products. Project teams may also need to consider the long-term impact of decisions related to token economic design.
5. Venture capital firms continue to play an important role in our industry and can work with project teams to ensure fair supply distribution and reasonable valuations.
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