Forward Guidance Empire | Introducing the Token Transparency Framework
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Jun 18, 2025 
Dan Smith, Head of Data at Blockworks, dives into the new Token Transparency Framework designed to boost clarity in the crypto space. He highlights the imperative for transparency to attract institutional investment and build trust. The discussion navigates the complexities of token markets, drawing parallels with traditional markets and underscoring the importance of legal protections. Smith emphasizes how the framework can help assess token projects more effectively, enhance investor confidence, and combat the challenges posed by speculative market behavior.
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Token Market as a Lemon Market
- The token market suffers from a "lemon market" problem due to asymmetric information, driving out quality projects.
- This causes good founders to prefer equity over tokens, perpetuating a cycle that harms token adoption.
High Risk Premium on Tokens
- Token investing requires a higher risk premium, roughly 20%, compared to 5% for equities.
- This results in tokens being valued at an 80% discount versus comparable equity investments.
Token Horror Stories and Scams
- A $40M FTV token project generating $40M cash flow lost investor trust when the team took IP and cash flow, effectively rugging token holders.
- Another example is Uniswap, where revenues flowed to equity holders instead of token holders, frustrating the token community.