Decline of speculative premium of bad tokenomics tokens

The speculative premiums many crypto projects enjoyed is a thing of the past.

The market is distinguishing between good protocols with bad tokens (no value capture, high inflation) and good protocols with good tokens (value capture, low inflation), as it should.

Our collective understanding of tokens, valuations and value capture has improved because we have more data having seen so many tokens trend to zero.

The bar is much higher now than in the past. Even more so when you consider that we have crypto stocks that big money can easily ape in to, and they are doing well.

We are also trending towards more transparency (e.g Blockworks Token Transparency Framework), so teams won't be able to hide how bad their tokenomics really are going forward.

No alt season will bail out bad tokens. Risk on seasons will amplify good tokens more. Ands there are no new retail flows to bid tokens that don't make sense, like the past. Yes, we are retail, but we are just a hot ball of PvP money. There is no exit liquidity for vapour.

I will also add that I think you can do well if you can predict that a good protocol with a bad token will actually have a good token at some point.

The timing is the challenge here, but there are a few candidates in this box.

Not all good protocols with bad tokens should be completely written off. Not everything can replicate HYPE, nor should it.

If you get it wrong it is devastating tho because you knew the token was bad, but no risk, no reward.

UNI probably the ultimate example of good protocol, bad token, and people speculating it would become a good token have been wrong for a long time now.

The longer a good protocol has a bad token the more they open the door up to competitors too, so it absolutely affects growth and market share”

Link to the original tweet: https://x.com/alpha_pls/status/1937105213954855000