Blockworks co-founder: The growth rate of token supply has significantly exceeded the value it creates, leading to diluted returns and a decoupling of price from fundamentals.

Blockworks co-founder Michael Ippolito published a lengthy article on the X platform stating that the crypto industry is facing a "survival-level" token problem: the growth rate of token supply has significantly exceeded the value it creates, leading to diluted returns and a decoupling of prices from fundamentals. According to data disclosed by DWF Labs, over 80% of projects are priced below their TGE level, with most experiencing a 50%-70% drop within three months, reflecting structural selling pressure in the token market. Michael Ippolito further points out that while the overall market capitalization remains relatively stable, the average value of individual tokens is weak, having fallen by approximately 50% since 2021, with most tokens retracing about 80% from their peaks. Returns are concentrated in a few top assets, such as Bitcoin and Ethereum. Furthermore, the correlation between token prices and on-chain revenue has weakened significantly; even with a recovery in protocol revenue, prices have not risen in tandem, reflecting a decline in market confidence in the token's ability to capture value. Therefore, the token mechanism needs to be repaired as soon as possible; otherwise, the market will further concentrate on top assets, weakening the overall ecosystem.