The Dark Side of Tokenomics: Exposing Low Float, High Valuation Token Launches | $TIA $GRT $ARCH

BY Cosmos JoeJuly 9 · video

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This is an excerpt from my stream on 5/2/2024
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=============== CHAT GPT SUMMARY ================

In the context of cryptocurrencies, low float high FDV (Fully Diluted Valuation) tokenomics refers to a scenario where a cryptocurrency has a small number of tokens actively circulating in the market (low float), but the total valuation of all potential tokens, including those not yet in circulation, is very high (high FDV). This design can be problematic and predatory for several reasons:

Market Manipulation: With a low float, it’s easier for large holders (whales) to manipulate the market price, leading to extreme volatility and potential price spikes or crashes.
Illusion of Value: A high FDV can give an illusion of a high market cap, making the project appear more valuable or successful than it actually is, potentially misleading investors.
Inflation Risk: As more tokens are released into circulation, the value of each token can be diluted, leading to significant price drops and losses for early investors.
Investor Exploitation: Unscrupulous developers may use low float high FDV structures to pump the price artificially, then sell their large holdings at a profit, leaving smaller investors with devalued tokens.
Lack of Transparency: Often, the details about the release schedule of additional tokens are not transparently communicated, adding to investor risk and uncertainty.
Overall, low float high FDV tokenomics can create a deceptive environment that exploits investor trust and market dynamics for the benefit of a few at the expense of the many.