0xResearch Introducing The Token Transparency Framework | Empire
Jun 18, 2025
Felipe Montealegre, CIO of Theia Research with expertise in tokenomics, Dan Smith, Head of Data at Blockworks Research, and Louis T, Investment Partner at L1D focusing on early-stage crypto projects, discuss the groundbreaking Token Transparency Framework. They reveal how this framework aims to boost industry trust by standardizing disclosures and protecting investors. The conversation dives into the challenges of asymmetric information in the token market, the impact of equity risks, and the need for transparency to elevate project credibility.
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Token Market as Lemon Market
- The token market suffers from a "lemon market" problem caused by asymmetric information between founders and investors.
- Good founders avoid launching tokens, leaving mostly low-quality "lemon" tokens in the market.
High Token Risk Premium
- Tokens have a much higher risk premium (
20%) compared to equities (5%). - This causes token valuations to be discounted by nearly 80% relative to comparable equity investments.
Rugging Tokens Example
- A project generating $40 million in cash flow suddenly pulled its IP, leaving token investors with nothing.
- This form of "rugging the token" is unthinkable in public markets but common in crypto.