Crypto’s Token Lockup Orthodoxy Is a Scam

The dominant model of token distribution in the crypto space these days is the so-called “low-float, high FDV” launch. In this model, projects launch with a low fraction of the total supply in circulation, where most of the supply is locked, typically unlocking gradually after a year. This low circulation is often coupled with, and perhaps even explicitly designed to encourage, a high fully-diluted valuation. According to research by CoinGecko, today nearly a quarter of the industry’s top tokens are low float. Notable recent launches which used this model include Starknet, Aptos, Arbitrum, Optimism, Celestia, and Worldcoin (where an astonishing 95.7% of supply remains locked as of this writing).