The conventional token playbook is deemed outdated, according to 21Shares researcher Darius Moukhtarzade, who pointed out that high initial valuations combined with low liquidity and leveraging governance meme tokens are no longer effective strategies for successful launches.

Moukhtarzade noted a significant “sentiment-fundamentals gap” as the main factor leading to failing token launches. Despite strong fundamentals supported by a growing global user base, enhanced regulatory clarity, heightened institutional involvement, and scalable infrastructure promoting long-term adoption, market sentiment remains bleak.

This negativity is reflected in pronounced levels of fear, the failure of numerous recent token generation events (TGEs), and the dilution of capital due to a surge in token quantity.

Moreover, changing investor interest towards AI and lingering mistrust from past exploitative project behavior have exacerbated the situation. Consequently, even fundamentally strong projects face challenges in attracting liquidity and interest, resulting in token launches that do not meet expectations despite favorable macroeconomic conditions.

The New Token Framework

To remedy this outlook, Moukhtarzade has suggested a new framework that emphasizes designing tokens to encourage users to hold rather than quickly sell them. This framework aims at eliminating the “race to exit” dynamic, where holders rush to sell, instead advocating for the alignment of interests among teams, investors, and users to jointly benefit as the project’s value increases over time.

The proposal also urges the association of token value with genuine fundamentals, such as revenue generation instead of mere hype, and suggests sharing that value directly with holders (e.g., through revenue sharing). This aligns holding with participation in the protocol’s growth, where longer holding periods lead to increased contributions and rewards.

Overview of Token Launches in 2025

Token launches in 2025 have largely underachieved, with data indicating that approximately 85% of projects are trading below their TGE valuations, leaving nearly 4 out of 5 in the red. Only 15.3% of tokens are performing well.

Several critical execution errors are contributing to the poor performance of these launches, even with favorable industry trends. Moukhtarzade explained during the EthCC conference that overpricing is a major issue, where projects commence with inflated FDVs alongside restricted circulating supply, leading to discrepancies between private evaluations and public market reception.

Moreover, founder overconfidence often results in disregarding broader market trends, leading to launches during weak or bearish periods, which further constrains demand. An additional mistake is underestimating sell pressure during the token generation event, where liquidity providers, airdrop recipients, and early investors frequently take profits quickly, adding downward pressure.

Many ventures also prematurely launch before achieving market fit or sustainable revenue, rendering the token a mere substitute for organic traction instead of a complement to it.