In the past two years in the altcoin market, we have consistently seen a phenomenon like a curse—extremely low circulating supply and an inflated FDV, resulting in losses for exchanges, retail investors, project teams, and even venture capitalists. This vicious cycle has been formed.

Why does this happen? Essentially, it’s due to large amounts of locked-up supply during the fundraising phase. Once unlocked, it causes a dump. This is a structural issue.

In recent years, some have attempted to break this cycle. When Meme coins were popular, many hoped that 100% circulation would solve the problem—but the result was that, without strict screening mechanisms, most people still lost money. Later, MetaDAO tried to strengthen the rights of token holders; the direction was correct, but issues with founder incentives, unlimited issuance, and difficulty listing on exchanges meant they also failed to fully resolve it.

Looking ahead, in the next 12 months, we need to digest the supply pressure from the previous funding round. Once past this hurdle, as valuations gradually return to rationality and new supply decreases, the situation may improve. But the real risk is that high-quality teams might switch to traditional equity financing, which could lead to a bleeding of the token market.

In my opinion, the key is to address the root causes: linking unlocks to KPIs, ensuring transparency, clarifying rights and responsibilities, issuing tokens selectively, and strictly screening projects. The game dynamics and growth potential of tokens are there; the crucial part is to set the rules correctly.