The cryptocurrency market is facing a crucial decision regarding token distribution. A recent opinion piece by Ethan Luc, head of community at Lava Network, suggests that the industry needs to rethink its approach to token launches. The current focus on inflated valuations and speculative price action must shift towards long-term utility and transparency.
Luc argues that the prevailing "low float, high fully-diluted value (FDV)" strategy is unsustainable and artificial. This approach involves releasing a small percentage of tokens while assigning a high price, creating a deceptively inflated FDV. Many projects have adopted this model, leading to short-lived benefits that disintegrate in the long-term.
The alternative approach suggested by Luc involves a market-derived FDV through decentralized exchange (DEX) trading, designed to reduce speculation and organically foster a community of believers and long-term network participants.