Coinlist "tears apart" VC coins: the listing FDV is over 13 times the private placement premium, and users are certainly unwilling to take over
Currently, the cryptocurrency market is filled with high FDV, and although exchanges have made adjustments to their listing strategies in response to community disputes, it ultimately only addresses the symptoms, not the root cause.Author: Nancy, PANews
Valuation assessment is both an art and a science. Currently, the crypto market is filled with high FDV, and although exchanges have adjusted their listing strategies in response to community controversies, it ultimately is a case of "treating the symptoms rather than the root cause." As the logic behind high valuations of projects urgently needs reconstruction, MEME has forcefully dominated trading charts, even leading to FOMO phenomena with institutions, celebrities, and politicians entering the market one after another.
Listing valuations show extremely high premiums compared to private placements, reducing VC profit margins to break the deadlock
In recent years, there has been an increasing number of projects in the crypto space that have raised tens of millions to billions of dollars. According to RootData, the total financing amount in the crypto market over the past year was $10.161 billion, with an average financing amount of $9.6871 million. Among these, projects that raised over $10 million accounted for nearly 40.2%, primarily through seed round financing.
In addition to the generally large financing scale, the valuations of listed projects on mainstream exchanges are also high. For example, data analysis released by RootData earlier this month indicated that since 2021, Binance Launchpool has announced valuations for 20 projects totaling approximately $5.94 billion, with an average valuation of about $297 million per project, maintaining a stable overall valuation trend; during the same period, OKX Jumpstart announced valuations for 10 projects totaling approximately $5.01 billion, with an average valuation of about $501 million per project.
Valuation levels are often used as one of the important indicators to assess potential value, especially as high-financing projects have once become "hot cakes" for investors, even leading to slogans like "buying high is the way to bottom" and "fear of heights is for the unfortunate." However, looking at the token price performance of today's high-valuation projects, market "fear of heights" sentiment is spreading, seemingly no longer favored by investors. In particular, under the immense selling pressure, criticism of high valuations is prevalent.
The well-known public offering platform CoinList tweeted today (May 28) that high FDV itself is not the problem, but the issue lies in projects conducting private placements at a certain FDV and then issuing to retail investors at an FDV 20 times higher. For instance, some recent high-profile airdrop projects like DYM, STRK, ARB, and W had an average FDV of $14.7 billion at listing, which is an average premium of 13.3 times compared to private market valuations.
"For founders, this practice is destructive to long-term development, as their brief unicorn status will subsequently be destroyed due to 'airdrop participants quickly selling tokens' and 'constant selling pressure from the private market,'" CoinList believes. If retail investors could participate at prices close to the last round of VC, everyone would be more satisfied.
CoinList cites its own example, stating that the retail price for its first five token issuances this year was only 1.04 times the previous VC round premium, with no lock-up period and a shorter release cycle.
Under market competition, MEME's popularity intensifies, leading to chaos such as account hacking and false promotions
As tensions between VCs and retail investors escalate, MEME has become a mainstream investment target. For example, according to the latest data shared by Zaheer Ebtikar, co-founder of Split Capital, among the top 10 largest cryptocurrencies by open contracts, four are MEME coins: PEPE, DOGE, BONK, and WIF. Among them, PEPE has open contracts worth $812.6 million, which is half of SOL's ($1.78 billion).
Additionally, the first-quarter revenue disclosed by Robinhood also showcases the market's love for MEME coins, with users holding $7.6 billion worth of Dogecoin, surpassing Ethereum's $5.63 billion.
Meanwhile, large institutions are also paying attention to and laying out plans in the MEME field. For instance, VanEck's MarketVector launched a Meme Coin Index that tracks six major MEME tokens: DOGE, SHIB, PEPE, WIF, FLOKI, and BONK. Franklin Templeton has also published multiple reports related to MEME coins.
Moreover, MEME has become a tool for political maneuvering. For example, U.S. presidential candidate Trump announced that his campaign would accept cryptocurrency donations, including Dogecoin and Shiba Inu, while Biden's campaign team plans to hire a Meme manager to attract young voters. This trend has also driven a recent surge in PolitiFi-related MEME tokens, with CoinGecko data showing that as of May 28, the market capitalization of PolitiFi tokens exceeded $1.35 billion.
However, it is important to be cautious as the rising popularity of MEME has also led to various chaotic phenomena. This includes recent incidents where multiple crypto KOL/media personalities' X accounts were hacked to falsely promote MEME coins. For instance, the hacker who attacked the well-known trader GCR's account was also related to the MEME token team CAT, and there have even been extreme actions taken by individuals promoting their MEME coins that resulted in third-degree burns. Of course, this also reflects the importance of VCs with endorsement value playing a role as "information filters."
