The latest incident involving the MOVE token from Movement Foundation, where a market maker appears to have quickly sold off millions of tokens soon after listing, serves as another example highlighting issues with the functioning of web3 markets. Despite crypto’s foundation in innovation and strong technical aspects, it often lacks essential operational and financial maturity.
Most web3 tokens are introduced by teams who possess significant technical prowess, yet have limited financial knowledge or discipline. These teams consist of engineers and dreamers – individuals with extensive knowledge in protocol development but lacking expertise in capital markets, liquidity management, or strategic marketing execution. This lack of experience often leads to hasty, disorganized, and potentially risky token launches.
Instead of focusing on critical aspects such as token economics, liquidity provisioning, and post-launch market behavior as afterthoughts or problems to tackle later, it’s essential to prioritize them from the beginning. Neglecting these financial considerations can transform significant milestones into credibility-damaging mistakes, despite a project having secure code and an enthusiastic community.
Setting baseline standards for launches
In simpler terms, cryptocurrencies don’t have to start from scratch. They should follow some basic guidelines to ensure they operate professionally and consistently during the initial coin offering (ICO) or token launch.
As a researcher involved in token launches, it’s crucial to view these events as more than just cause for celebration; they represent significant market entries that demand strategic planning and execution. To ensure success, every token launch team should designate an individual responsible for financial modeling and market strategy—this could be an in-house expert, a trusted advisor, or a strategic partner.
In addition to this, projects must develop comprehensive strategies for aspects such as liquidity management, investor communications, token distribution schedules, and post-launch support. A clear narrative and economic guidelines are not optional extras; they are essential components of a successful launch.
To ensure success, it’s equally important for projects to establish mechanisms that foster accountability, such as live dashboards for continuous tracking of project progress and post-launch evaluations to discern what strategies worked effectively and which ones required improvement. Launches should not be shrouded in mystery; instead, they should be quantifiable, open to review, and capable of being repeated with similar results.
It would be more effective for projects to leverage the available resources such as tools, platforms, and skilled professionals who are ready to assist in project execution from the start. Unfortunately, many teams fail to utilize these resources altogether or only engage with them at a later stage when it might be too late.
Crypto’s lack of financial discipline—and how it’s holding projects back
In conventional finance, the method for introducing new products or services (the go-to-market process) has been refined over centuries. When a private company decides to go public, it must meet stringent criteria once it reaches a certain level of maturity. However, unlike traditional markets, there are no established guides or institutions to help navigate this process within the web3 environment.
In conventional industries, every product that’s introduced to the market is typically overseen by a Chief Financial Officer (CFO), has a well-thought-out pricing strategy, and includes a thoughtful plan for engaging potential investors. However, it’s quite common in the crypto sphere to witness projects launch without any financial experts contributing to the process.
A significant issue lies in the structure, as token launches frequently occur without much institutional backing compared to equity IPOs. While equity IPOs are backed by numerous bankers, underwriters, and investor relations specialists, token launches often take place with little support from these groups. Instead, there are only a few reliable intermediaries, no underwriting syndicates, and no established guidelines. This leaves small teams or even individuals to navigate the most financially impactful event in their project’s history on their own.
The outcomes are foreseeable: a significant number of projects fail to establish definitive control over financial modeling and token distribution; liquidity provisioning is frequently overlooked, with minimal collaboration between exchanges, market makers, or the core team; and there’s usually a lack of focus on managing price fluctuations and setting investor expectations post-launch.
Due to unclear token distributions, volatile pricing patterns, and scattered market liquidity, there is a gradual loss of confidence among the public regarding cryptocurrencies. This leads to financial losses for backers, stagnation in project progression, and multiple setbacks to the overall industry reputation.
When it comes to crypto, issues like unclear token distribution, price fluctuations, and lack of consistent market liquidity can make people lose faith, resulting in financial losses, project slowdowns, and negative impacts on the entire industry’s reputation.
Predatory advisors are a symptom of a broken system
The lack of established professional assistance for crypto creators has given rise to a thriving market of deceptive “advisors.” These individuals claim expertise, offering introductions, advice, and visibility, but frequently fail to deliver on their promises. They often ask for high fees or token shares in exchange for generic suggestions and repetitive talking points. Their attention is divided among numerous projects, and they prioritize building their resumes over achieving long-term success.
Examine their social bios and you’ll notice a long list of companies they claim to have “advised,” whether these companies have actually been successful or not. These individuals don’t provide any substantial benefits, instead acting more like parasites that drain resources from a project’s community without contributing much in return. In an industry lacking solid foundations and infrastructure, they have discovered a way to prosper. The issue is that when there are no reliable standards within your field, deception can easily be mistaken for advice.
The imperative to mature: Poor planning smothers the industry at large
Cryptocurrencies have moved beyond being a playground. Massive amounts of money are involved now, attracting institutional investors’ attention and scrutiny from regulators. The spotlight is on this industry, and in order to make a positive impact, it must quickly enhance its performance.
It’s unsustainable to persist with our current approach to launching projects, as if we’re still in 2017. If we don’t adopt more effective strategies, the crypto sector could face persistent losses of skilled personnel, funding, and public faith. Talented initiatives might collapse due to avoidable mistakes, while unscrupulous individuals could manipulate uncertainty to deceive communities. Furthermore, developers may become disenchanted with a system that prioritizes hype over substance.
In a more straightforward phrasing: The existing system skews industry valuations unfairly, leading to ineffective allocation of capital. Projects with questionable foundations may surpass stronger rivals due to smoother launches, while sturdier protocols face difficulties gaining popularity not because of product flaws, but due to mishaps during release. This not only results in inefficiency but also goes against the meritocratic principles of capitalism, making it difficult for the system to operate optimally in this skewed environment.
In the brink of mainstream cryptocurrency acceptance, the current market issues become a matter of survival. The next phase of acceptance won’t be driven by average investors speculating on meme-coins. Instead, it will be fueled by institutions, businesses, and innovators who demand robust foundations. If tokens can’t showcase robust foundations and active markets, they may never materialize at all.
‘Growing pains’ are no longer acceptable
As more institutions enter the cryptocurrency market and prominent political figures endorse crypto-friendly platforms, the chance for web3 to enter mainstream society has never been more promising. However, if we don’t elevate our standards, we risk missing this opportunity. The world is observing us, and at the moment, they see disorder.
To secure a position at the international financial stage, web3 needs to demonstrate its worthiness. This implies viewing each token release not as an artistic endeavor or unveiling event, but as a financial product launch. By having the right personnel, resources, and infrastructure, we can prevent chaotic launches and instead begin constructing a more credible, dependable, and trusted environment.
Shane Molidor serves as both the creator and chief executive officer of Forgd, a versatile and efficient platform offering guidance on tokens, as well as optimization solutions tailored for various blockchain initiatives, making it effortless for these projects to utilize necessary tools.
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2025-06-05 13:21