Crypto Assets Market Transformation and New Trends

Project Token Distribution and Market Performance

Recently, the token distribution and market performance of some well-known Crypto Assets projects are as follows:

| Token | Market Cap | Fully Diluted Valuation | Token Distribution | Price Change | |------|------|--------------|----------|----------| | BERA | 610 million USD | 2.8 billion USD | Airdrop 15.8%, Investors 34.3% | -61.6% | | IP | $409 million | $1.6 billion | Investors 21.6% | -37.5% | | GPS | $277 million | $1.5 billion | Airdrop 10%, Investors 19.33% | -32.0% | | PLUME | $265 million | $1.3 billion | Airdrop 7%, Investors 21% | -38.8% | | B3 | 205 million USD | 967 million USD | Investor 20% | -48.5% | | BIO | $178 million | $446 million | Airdrop 6%, Investors 13.6% | -85.4% | | SHELL | $145 million | $542 million | IDO 4%, Investors 29% | -9.8% | | LAYER | 148 million USD | 724 million USD | Airdrop 12%, Investors 16.66% | -49.6% | | SONIC | $115 million | $774 million | Airdrop 7%, Investors 15% | -73.4% |

The proportion of investors in these projects generally ranges from 10% to 30%, showing little change compared to before. Most projects choose to distribute tokens through airdrops, considering it a reasonable way to allocate to the community. However, users often sell immediately after receiving the airdrop, as they believe that the project team has hidden a large number of tokens in the airdrop. This results in significant market sell pressure after the token is issued, which is detrimental to the effectiveness of the airdrop. This phenomenon has persisted in recent years, with little change in the token distribution method. The performance of token prices indicates that investor-driven token prices perform poorly, often experiencing unilateral declines after issuance.

SHELL is slightly different, allocating 4% of the tokens through IDO, with an IDO market value of only 20 million USD. In addition, Soon and Pump Fun chose to allocate over 50% of the tokens through fair launch distribution, combining a small number of investors and opinion leaders for large-scale community fundraising. This way of giving back to the community may be more easily accepted, while the funds raised from the community can be locked in advance. Although the project party no longer holds a large amount of tokens, they can buy back chips through market making, sending positive signals to the community.

The End of the Memecoin Bubble

The shift from an investor-driven market to a purely "speculative" token issuance model has led to these tokens inevitably engaging in zero-sum games, where ultimately only a few profit while most retail investors may incur losses and exit. This will exacerbate the collapse of the primary and secondary structures of the market, and rebuilding or chip accumulation may take a longer time.

The atmosphere in the Memecoin market has plummeted to an extreme. When retail investors realize that Memecoins are still unable to break free from the control of capital parties, market makers, investors, opinion leaders, and celebrities, the issuance of Memecoins has completely lost its fairness. The dramatic losses in the short term will quickly affect users' psychological expectations, and this token issuance strategy is nearing a phase of conclusion.

In the past year, retail investors have made relatively the most profits in the Memecoin sector. Although the AI Agent narrative has driven market enthusiasm, it has proven that this wave of AI Agent hype did not change the essence of Memecoins. A large number of Web2 individual developers and Web3 shell projects quickly occupied the market, resulting in a proliferation of AI Memecoin projects dressed in the guise of "value investment."

Community-driven tokens are controlled by certain groups, manipulating prices for "fast track" through malicious means. This approach severely impacts the long-term development of the project. Previously, Memecoin projects alleviated token sell-off pressure through religious beliefs or support from minority groups, and achieved an acceptable project exit process for users through market maker operations.

However, when the Memecoin community is no longer using religion or minority groups as a cover, it indicates that market sensitivity has decreased. Retail investors are still looking forward to the opportunity to get rich overnight, eager to find tokens with high certainty, and expect projects to have deep liquidity at launch. Bigger bets mean bigger rewards, which is beginning to attract the attention of teams outside the industry. After these teams reap their profits, they will no longer use stablecoins to purchase Crypto Assets, as they lack faith in Bitcoin. The liquidity that has been drained will be permanently lost to the Crypto Assets market.

The Dilemma of Investor Tokens

The strategies from the previous cycle have become ineffective, yet many project teams still use the same strategies out of inertia. Small amounts of tokens are released to investors while maintaining high control, leading retail investors to buy orders on trading platforms. This strategy has become ineffective, but the inertia of thought makes project teams and investors reluctant to change easily. The biggest drawback of investor-driven tokens is that they cannot gain early advantages during token generation events. Users no longer expect to achieve ideal returns by buying tokens, as they believe that project teams and trading platforms hold a large number of tokens, placing both parties in an unfair position. At the same time, during this cycle, investors' return rates have significantly decreased, and investment amounts have begun to decline, coupled with users' unwillingness to take over on trading platforms, creating significant difficulties for the issuance of investor tokens.

For investors in projects or trading platforms, going public may not be the best choice. The liquidity siphoned off by celebrity tokens or political token teams has not been injected into other coins. Therefore, once the investor's token is listed on the exchange, the contract fee rate will quickly turn to -2%. The team will have no incentive to pump the price, as the listing goal has already been achieved; trading platforms will also not pump the price, as shorting new coins has become the market consensus.

When a coin is issued and immediately enters a one-sided downward trend, the frequency of this phenomenon increases, and the market users' perception will be gradually reinforced, leading to the situation of "bad coins driving out good coins". Assuming that in the next token generation event, the probability of a project team dumping the coin immediately after issuance is 70%, while those willing to maintain the market are 30%. Under the influence of the continuous appearance of dumping projects, retail investors will engage in retaliatory short selling, even knowing that the risk of shorting immediately after issuance is extremely high. When the short-selling situation in the futures market reaches its extreme, project teams and trading platforms are also forced to join the ranks of short selling to compensate for the target returns that cannot be achieved through dumping. When the 30% of teams see this situation, even if they are willing to provide liquidity, they are reluctant to bear such a huge price difference between futures and spot markets. Therefore, the probability of project teams dumping immediately after issuance will further increase, and the teams that create beneficial effects after issuance will gradually decrease.

The unwillingness to lose control over chips has resulted in a lack of progress or innovation for a large number of investors' tokens during token generation events compared to four years ago. The inertia of thinking is a stronger constraint on investors and project parties than imagined. Due to the fragmentation of project liquidity, long unlocking periods for investors, and the constant turnover of project parties and investors, despite the ongoing issues with this method of token generation events, both investors and project parties exhibit a numb attitude. Many project parties may be establishing projects for the first time, and when faced with difficulties they have never experienced, they tend to develop a survivor bias, believing they can create different value.

The Rise of Dual-Drive Mode

Why choose a dual-driven model of investors + community? A model driven solely by investors increases the pricing discrepancy between users and project parties, which is detrimental to the price performance of token issuance in its early stage; on the other hand, a completely fair launch model can easily be manipulated maliciously by certain groups behind the scenes, leading to a loss of a large amount of low-priced chips, causing the price to go through a complete cycle of fluctuations within a day, which is a devastating blow to the subsequent development of the project.

Only by combining the two can the investors enter at the early stage of the project, providing reasonable resources and development plans for the project party, reducing the team’s financing needs in the early stages of development, avoiding the worst outcome of losing all chips due to fair launches and only obtaining low certainty returns.

Over the past year, more and more teams have realized that traditional financing models are failing—giving investors small shares, highly controlled operations, and waiting for the market to rally has become untenable. With tightening funds from investors, retail investors refusing to take over, and higher listing thresholds on large trading platforms, a new approach better suited for bear markets is emerging: collaborating with leading opinion leaders and a small number of investors to promote projects through large-scale community launches and low market cap cold starts.

Projects represented by Soon and Pump Fun are paving a new path through "large-scale community launches"—endorsed by leading opinion leaders, distributing 40%-60% of tokens directly to the community, launching projects at valuations as low as $10 million, and achieving millions of dollars in financing. This model builds consensus FOMO through the influence of opinion leaders, locks in profits early, and exchanges high liquidity for market depth. Although it abandons short-term control advantages, it allows for compliant market-making mechanisms to repurchase tokens at low prices during bear markets. Essentially, this is a paradigm shift in power structure: from the investment-led game of passing the parcel ( to institutional takeovers—selling off—retail buying ), moving towards a transparent game of community consensus pricing, where project parties and the community form a new symbiotic relationship within liquidity premiums.

Recently, Myshell can be seen as a groundbreaking attempt between a trading platform and project parties. 4% of its tokens are issued through IDO, with an IDO market value of only $20 million. To participate in the IDO, users need to purchase a certain coin and operate through the trading platform wallet, with all transactions recorded directly on the chain. This mechanism not only brings new users to the wallet but also allows them to gain fair opportunities in a more transparent environment. For Myshell, operations through market makers ensure a reasonable price increase. Without sufficient market support, the price of the coin cannot be maintained within a healthy range. As the project develops, the gradual transition from low market value to high market value, along with the continuous enhancement of liquidity, leads to the project gradually gaining market recognition. The contradiction between project parties and investors lies in transparency. After the project parties launch the coin through IDO, they no longer rely on exchanges, which can resolve the contradictions regarding transparency between both sides. The token unlocking process on the chain becomes more transparent, ensuring that past conflicts of interest are effectively resolved. On the other hand, traditional centralized trading platforms face the dilemma of often experiencing price crashes after token issuance, which leads to a gradual decline in trading volume. However, through the transparency of on-chain data, trading platforms and market participants can more accurately assess the true situation of the project.

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 investor tokens is the lack of buying support after listing, with pricing and expectations being the main reasons. The breakthrough point lies with the project parties and trading platforms. Only by fairly distributing tokens to the community and continuously promoting the development of the technical roadmap can the project's value growth be achieved.