According to a report by Binance Research Institute, the prevalence of high valuation and low initial circulation tokens has been a topic of discussion in the cryptocurrency community in recent months. This is because people are concerned that such market structures leave little sustainable upside for traders after token generation events (TGEs).

Data from CoinMarketCap and Token Unlocks confirms that the trend of issuing tokens with low circulation supply and high valuation is growing. It is worth noting that tokens worth approximately $155 billion are expected to be unlocked from 2024 to 2030. If buyer demand and capital inflows do not increase correspondingly, the influx of a large number of tokens into the market will create selling pressure.

Factors such as private market capital inflows, aggressive valuations, and optimistic market sentiment have contributed to the trend of issuing high FDV tokens. The current market environment requires investors to have the ability to choose and discern when considering the fundamentals of a project, such as token economics, valuation, and product. Project teams may also need to consider the long-term impact of decisions related to token economics design.

VCs continue to play an important role in the cryptocurrency industry, working with project teams to ensure fair supply distribution and reasonable valuations.