

Empire | Introducing The Token Transparency Framework
Jun 18, 2025
Dan Smith, Head of Data at Blockworks, and Louis, Investment Partner at L1D, dive into the innovative Token Transparency Framework aimed at enhancing clarity in the crypto market. They discuss the challenges within the token market, comparing it to lemon markets plagued by information asymmetry. The conversation highlights the distinct risk premiums between traditional assets and tokens, illustrating the valuation disparities. They emphasize the need for standardized information to foster trust and accountability, ultimately paving the way for a more transparent crypto landscape.
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Crypto's Lemon Market Problem
- Crypto token markets suffer from a "lemon market" problem due to asymmetric information and lack of transparency.
- Good founders avoid tokens because the market undervalues them, driving away quality projects.
Lack of Token Disclosure Tools
- Token issuers hold unique proprietary information with no standardized way to disclose it.
- Lack of disclosure tools prevents projects from proving legitimacy and transparency to investors.
Token Risk Premium Explained
- Tokens carry a higher risk premium (
20%) than equities (5%), demanding much higher returns. - This leads to an 80% valuation discount on tokens compared to comparable equities.