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

Golden Finance reports that Blockworks co-founder Michael Ippolito has published a long-form piece stating that the crypto industry is facing “survival-level” token issues: the rate at which token supply is growing has already clearly outpaced the value it creates, leading to diluted returns and a disconnect between prices and fundamentals. According to data disclosed by DWF Labs, more than 80% of projects are trading below the TGE level, and most have fallen by 50%-70% within three months, indicating that the token market’s sell-pressure structure is persistent.

Michael Ippolito noted that although the overall market capitalization remains relatively stable, the average value performance of individual tokens is weak: it is down by about 50% compared with 2021, and most tokens have retraced roughly 80% from their highs, with returns concentrated in a small number of top assets such as Bitcoin and Ethereum. In addition, the link between token prices and on-chain revenues has weakened significantly. Even if protocol revenue rebounds, prices do not rise in tandem, reflecting a decline in market confidence in token value capture capabilities. Therefore, token mechanisms must be repaired as soon as possible; otherwise, the market will further concentrate toward leading assets, weakening the broader ecosystem.