The article discusses the phenomenon of low float, high Fully Diluted Valuation (FDV) tokens in the cryptocurrency market, emphasizing the risks involved. It explains that while this model can create the illusion of scarcity and inflate prices, it often leads to volatility and potential crashes when more tokens become available. Analysts and exchanges have differing views on the model's impact, but understanding its mechanics is crucial for investors to avoid being ensnared by the deceptive aspects of tokenomics. The article serves as a warning to crypto enthusiasts to tread carefully.
Artificial scarcity from low float tokens inflates prices, causing the perception of value to spike easily. However, this leads to significant volatility and potential crashes.
The low float, high FDV token structure can create an illusion of value. When tokens unlock after vesting, the reality often leads to falling prices.
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