The dominant model of token distribution in the crypto space these days is the so-called “low-float, high FDV” launch. In this model, projects launch with a low fraction of the total supply in circulation, where most of the supply is locked, typically unlocking gradually after a year. This low circulation is often coupled with, and perhaps even explicitly designed to encourage, a high fully-diluted valuation. According to research by CoinGecko, today nearly a quarter of the industry’s top tokens are low float. Notable recent launches which used this model include Starknet, Aptos, Arbitrum, Optimism, Celestia, and Worldcoin (where an astonishing 95.7% of supply remains locked as of this writing).

This model is fundamentally broken. Restricting the movement of tokens distorts the market signal and misleads both actual and potential network participants who rely on that signal to make decisions. “Low-float, high FDV” results in a world where most of the upside potential of new launches is captured by private investors and little is available to the public markets at all. Ultimately, this pattern of launching tokens inflates short-term metrics at the cost of long-term sustainability and the public trust.

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