Crypto Assets Token Allocation and Market Dynamics Analysis

Recently, the token allocation of several crypto assets projects has attracted market attention. From the data, the proportion of institutional investors in most projects ranges from 10% to 30%, which has not changed significantly compared to before. Many projects choose to distribute tokens to the community through airdrops, but the actual effect is not ideal. Users often sell immediately after receiving airdrops, leading to significant selling pressure on the market. This phenomenon has persisted for years, and there has been no obvious change in the token allocation methods.

From the performance of token prices, it can be seen that institution-led tokens generally perform poorly, often showing a one-sided downward trend after listing. However, there are also some projects that have adopted different strategies. For example, a certain project allocated 4% of its tokens through the initial token issuance (IDO), with an initial market value of only $20 million, which stands in stark contrast to other institution-led projects. Additionally, some projects choose to distribute over 50% of the total token supply through a fair launch method, while combining a small number of institutional investors and opinion leaders for large-scale community fundraising.

This profit-sharing approach for the community may be more readily accepted. Although the project party no longer holds a large amount of Tokens, they can repurchase chips on the secondary market through market-making, sending a positive signal to the community while acquiring chips at a lower price.

The Memecoin Craze Cools Down

The market atmosphere for Memecoins has fallen to a low point. As users realize that Memecoins are still controlled by various forces, the issuance of these Tokens has lost its fairness. The massive losses in the short term have quickly affected user expectations, bringing this Token issuance strategy close to a phase of conclusion.

Despite the fact that the concept of artificial intelligence (AI) has driven market enthusiasm, it turns out that this wave of AI frenzy has not changed the essence of Memecoin. A large number of projects have flooded the market, resulting in many AI Memecoin projects disguised as "value investment."

Community-driven tokens are manipulated to "cash out quickly" through malicious price control. This practice severely damages the long-term development of the project. When the Memecoin community no longer hides behind specific groups, market sensitivity has already decreased. Retail investors are still chasing opportunities for windfall profits, but this plays right into the hands of certain groups.

A larger bet means higher returns, which begins to attract teams from outside the industry. However, these teams may not leave their profits in the crypto assets market, leading to a permanent loss of liquidity.

Institutional-Driven Tokens Face Dilemmas

The strategies from the last bull market have become ineffective, yet many project teams are still using old models. A small percentage of tokens are allocated to institutional investors and highly controlled, allowing retail investors to buy on exchanges. The biggest downside of this strategy is the inability to gain early advantages during the Token Generation Event (TGE).

Users no longer expect to achieve ideal returns by buying in through issuing coins, as they believe that project parties and exchanges hold a large number of tokens, resulting in both sides being in an unfair position. At the same time, institutional investment returns have significantly declined, and the scale of investment has also shrunk accordingly. Additionally, users are unwilling to take over at exchanges, posing a huge challenge for the issuance of tokens driven by institutions.

For institutional projects or exchanges, direct listing may not be the best option. Once listed, the contract rate may quickly turn negative. The team lacks the motivation to drive up prices, and exchanges will not actively promote the rise, as shorting new coins has become a market consensus.

When the phenomenon of a Token immediately entering a unilateral decline after issuance occurs frequently, market perception will gradually strengthen, leading to the situation of "bad money driving out good money." Even if they are aware of the great risks, retail investors may engage in retaliatory short-selling behavior. In such cases, even teams willing to provide market-making may hesitate.

The Rise of Dual-Drive Mode

Why choose a dual-driven model of institutions and communities? A purely institution-driven model increases the pricing disparity between users and project parties, which is not conducive to the early price performance of Tokens; while a completely fair launch model can be easily manipulated maliciously, causing devastating damage to project development.

Only by combining the two can one obtain reasonable resources and development plans in the early stages of the project, avoiding the worst outcome of losing all chips due to fair launch and only obtaining low certainty returns.

Recently, more and more teams have discovered that traditional financing models are failing. Under multiple pressures, a new model that is more suitable for bear markets is emerging: combining leading opinion leaders and a small number of institutional investors to advance projects through a large proportion of community launches and low market cap cold starts.

Some projects are opening up new paths through "high ratio community launches"—endorsed by leading opinion leaders, distributing 40%-60% of the Tokens directly to the community, and launching projects at valuations as low as $10 million. This model builds consensus through the influence of opinion leaders, locks in profits in advance, and exchanges high liquidity for market depth.

Essentially, this is a paradigm shift in power structures: from an institution-led game of passing the parcel to a transparent game of community consensus pricing, where project parties and the community form a new symbiotic relationship through liquidity premiums.

Recently, the IDO of a certain project can be seen as an attempt at a new model. 4% of the Tokens were issued through the IDO, with an IDO market capitalization of only 20 million USD. Users need to participate through specific channels, and all transactions are recorded directly on the chain. This mechanism not only brings new users to the platform but also provides users with a more transparent and fair opportunity to participate.

The conflict between the project party and institutional investors lies in transparency. After launching the Token through IDO, the project no longer relies on traditional listing methods, effectively resolving the transparency issue between both parties. The unlocking process of the on-chain Token has become more transparent, ensuring that past conflicts of interest are effectively addressed.

It can be said that the core contradiction between users and project parties lies in pricing and fairness. The purpose of a fair launch or IDO is to meet users' expectations for Token pricing. The fundamental issue with institution-driven Tokens is the lack of buying pressure after listing, with pricing and expectations being the main reasons. Only by fairly distributing Tokens to the community and continuously promoting the construction of the technical roadmap can the value growth of the project be realized.