Supply Shock Empire | Introducing the Token Transparency Framework
Jun 18, 2025
Dan Smith, Head of Data at Blockworks, unveils the Token Transparency Framework, which aims to bridge the information gap in the crypto space. He discusses how transparency can reshape token projects and drive mainstream adoption. Louis, an investment partner at L1D, highlights structural issues in the crypto market, likening it to a 'lemon market.' They address the impacts of inadequate legal protections for investors and the need for improved disclosure practices to bolster trust and integrity in the cryptocurrency ecosystem.
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Token Market Lemon Problem
- Token markets suffer from a "lemon market" problem caused by asymmetric information and lack of transparency.
- This drives away good projects, creating a market dominated by low-quality tokens and causing steep valuation discounts.
Token Risk Premium Explained
- Tokens currently carry a much higher risk premium than equities, about 20% versus 5%.
- This increased risk leads to an approximate 80% discount in token valuations compared to equivalent equity.
Token Rugging and Revenue Issues
- Felipe shared a case where a $40M valued token project generating $40M cash flow stripped token holders of value, a form of "rugging".
- Another example involved Uniswap directing revenue to equity holders while token holders received no fees, highlighting market risks.