Lightspeed Newsletter: Anatomy of a token launch

Maybe there’s no silver bullet to avoiding most tokens dumping after launch…

article-image

Dennis G Zill/Shutterstock and Adobe modified by Blockworks

share

Howdy!

Today’s Lightspeed is a bit shorter, on account of the US office being closed for Memorial Day. 

Hopefully you’re soaking in a bit of sun today. And if any current or former members of the military happen to be reading this, thank you for your service! 


High FDV, low float, no dice

If you want to kick a crypto founder or VC into fight or flight mode, ask him about his low float, high fully diluted valuation (FDV) token launch. 

The online part of the crypto world has been blaming these sorts of token launches — where the amount of initially available tokens is small, and the total supply is large — on lackluster returns that purportedly benefit insiders for some newly-circulating coins. Boiled down, some allege that inflated FDVs are making it difficult for retail investors to capture any upside. 

One chart has been making the rounds showing a large majority of new Binance listings seeing price declines in recent months.

The prodigious crypto poster cobie opined on the subject at length, concluding that new token launches are “uninvestable” because of “the privatization of price discovery and unhealthy inflated valuations from VC markets that ignore supply and demand.”

In the VC corner, Dragonfly managing partner Haseeb Qureshi argued that new token prices are actually down because risky assets became generally less attractive when instability flared up in the Middle East.

In Solana land, where token launches have been a big driver of DeFi activity in recent months, it’s unclear how much of a problem this all is. Jito and Jupiter’s tokens were among the rare few to appreciate in price following their Binance listing despite having FDVs in the billions, per CoinGecko. Still, the Solana ecosystem token PYTH declined post its early February listing, per the aforementioned chart.

I spoke with David Lu, core contributor at Drift Labs, about the perpetuals DEX’s airdrop from last week. DRIFT launched with 17% of its total supply circulating, Lu said, adding that many tokens launch with closer to 10% in circulation. 

Lu said this put Drift’s community on a more level playing field with insiders. 

“The high FDV just benefits VCs and insiders and really hurts people because your real users cannot participate. And I think at some point the music stops, and once your community leaves, that’s it for your project,” Lu said. 

DRIFT’s price has climbed over the past week, though its exchange listings were somewhat staggered, and I won’t claim to know causally why the price is up. 

But maybe there’s no silver bullet to avoiding most tokens dumping after launch. If making the token price go up was as simple as punching numbers in differently, wouldn’t everyone be doing it?

— Jack Kubinec

One good DM

A message from David Lu, core contributor at Drift Labs:


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

Content Delivery Networks (CDNs) represent low-hanging fruit in a massive market ripe for Web3-driven disruption. The global CDN market was valued at ~$28B in 2024, and is projected to surpass $140B by 2034, (18.75% CAGR) underscoring the immense demand for efficient content delivery.

article-image

As Satoshi-era wallets saw over $8 billion worth of BTC on the move, Congress is gearing up for “Crypto Week”

article-image

Bitcoin’s runaway success was partly driven by Slashdot

article-image

Blockworks Research data shows that VC spending is back on the rise after a slow May

article-image

After rejecting a bid from the AI cloud-computing startup last year, Core Scientific agreed to be acquired in a deal expected to close by Q4 2025

article-image

Sponsored

Plume’s collaboration with TRON will unlock cross-chain RWA yield for one of the world’s largest blockchain ecosystems

article-image

Who needs gold when you have taxes?