Star Xu, the founding father of the most important crypto alternate OKX, raises alarms concerning the frequent sell-offs of newly listed altcoins.
Specifically, he factors to the drastic decline of the Aevo token, which fell from a excessive of almost $4 in March 2024 to a present worth of $0.434. This represents a dramatic 90% drop in worth in simply 5 months.
Aevo Announces Buyback to Create Long-Term Value For Token Holders
Xu’s criticism extends past market fluctuations to handle crypto exchanges’ moral duties.
In an X (Twitter) publish, Xu questioned the motives behind crypto exchanges listing new tokens. He argued that these actions usually result in speedy sell-offs, primarily benefiting preliminary holders and disadvantaging the broader person base.
“Since there is no supervision on listing and reducing holdings for the time being, how can we protect this market? This is something that the entire industry should reflect on,” Star Xu said.
Read extra: 12 Best Altcoin Exchanges for Crypto Trading in August 2024
Echoing Xu’s issues, outstanding crypto investor RamenPanda famous a shift in how challenge builders method token gross sales. In earlier instances, founders invested deeply in their very own cryptocurrencies. However, at this time’s builders often use tokens merely as instruments to lift and money out USD.
“Tokens themselves have become an intermediate tool for cashing out US dollars. These project developers don’t even believe in Bitcoin, let alone their own tokens,” RamenPanda criticized altcoin builders.
Moreover, in response to those points, the Aevo workforce has carried out a token buyback technique to stabilize its value. In July, they bought 1 million AEVO at a mean value of $0.446.
“We will commit to buybacks of at least 1 million AEVO every month from July to December. With the supply of AEVO almost fully vested and the start of buybacks, we believe this is a good starting point to create long-term value for AEVO token holders,” the workforce announced.
Nevertheless, Aevo shouldn’t be the one token going through these challenges. Recent knowledge from the Dune dashboard, VC Printer, indicates that a number of altcoins are below related pressures. For occasion, enterprise capitalists (VCs) holding Ethena (ENA) are sitting on an unrealized revenue of 73X, posing a big threat of market influence if these earnings are realized.
Additionally, token-unlocking occasions contribute to market pressures. Wormhole’s upcoming launch of 600 million W tokens, constituting 33% of its circulating provide, is anticipated to introduce a considerable promoting pressure into the market.
Read extra: How To Fund Innovation: A Guide to Web3 Grants
Similarly, final week AltLayer unlocked over $100 million worth of ALT tokens. These tokens make up round 42% of its provide. If the stakeholders promote their tokens within the open market, it may ignite strain, impacting value.
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