In the world of cryptocurrency, the most prevalent model for token distribution is known as the “low-float, high FDV” launch. This approach involves projects releasing only a small portion of the total token supply at the outset, with the majority of tokens being locked up for a period of time before gradually becoming available. The aim of this strategy is to create a sense of scarcity and exclusivity, driving up the fully-diluted valuation of the project.
Research conducted by CoinGecko has revealed that approximately 25% of the top tokens in the industry follow this low-float distribution model. Recent high-profile launches that have adopted this approach include Starknet, Aptos, Arbitrum, Optimism, Celestia, and Worldcoin. Notably, Worldcoin has locked up an impressive 95.7% of its token supply, emphasizing the scarcity factor.
This trend towards low-float, high FDV token launches reflects the competitive nature of the crypto space, where projects are seeking innovative ways to stand out and attract investor interest. By limiting the initial circulation of tokens and emphasizing the potential for future growth, these launches are able to generate excitement and drive up valuations in a crowded market.
