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

Odaily Planet Daily reports that Blockworks co-founder Michael Ippolito published a long post on X, saying that the crypto industry is facing “survival-level” token problems: the growth rate of token supply has clearly outpaced the value it creates, leading to diluted returns and a decoupling between prices and fundamentals. According to data disclosed by DWF Labs, more than 80% of projects’ prices are below the TGE level, and most have fallen 50%-70% within three months, indicating that token markets are structurally pressured to sell.

Michael Ippolito further pointed out that although the overall market cap remains relatively stable, the average value performance of individual tokens is weak, down by about 50% compared with 2021. Most tokens have pulled back roughly 80% from their highs, with returns concentrated in a small number of top assets, such as Bitcoin and Ethereum. In addition, the correlation between token prices and on-chain revenue has noticeably weakened. Even if protocol revenue rebounds, prices do not rise in tandem, reflecting declining market confidence in the ability of tokens to capture value. Therefore, token mechanisms need to be repaired as soon as possible; otherwise, the market will further concentrate toward leading assets, weakening the broader ecosystem.