Insufficient Transparency in the Token Market Raises Industry Concerns, Experts Call for Establishing Open Standards

The cryptocurrency industry has a history of fifteen years and is at a crucial turning point. Although some crypto companies have begun to seek IPOs, the lack of transparency in the token market still seriously hinders the development of the industry. Industry experts point out that if this issue is not resolved, the vision of tokens as a direction for future capital formation will be difficult to achieve.

Several industry veterans recently delved into the structural issues facing the current Token market during a discussion. They believe that the Token market is transforming into a "lemon market"—due to the lack of effective mechanisms to distinguish between quality and subpar projects, the overall quality of the market is declining, and quality projects are reluctant to issue tokens.

Compared to traditional equity investments, token investors face many unique risks: insufficient legal protection, multi-token issues, parasitic equity problems, misconduct by founders, and foundation abuses. These risks result in a risk premium for tokens of up to 20%, far higher than the 5% for stocks, leading to a significant discount in token valuations.

Experts cited some chaotic phenomena in the industry, including projects suddenly abandoning their Tokens, issuing new Tokens for new business lines that harm the interests of early investors, and Token holders being unable to share in project revenues. They pointed out that some of these issues stem from regulatory gaps, while others are due to the abuse of power by founding teams.

To address these challenges, the industry is taking some proactive measures. Some projects are exploring new legal structures to ensure that value flows to Token holders. There have also been some positive signals from regulators, such as the "Safe Harbor 2.0" proposal put forward by a commissioner of the SEC in the United States.

In response to the issue of insufficient information disclosure, some experts have proposed the idea of establishing a "Token Transparency Framework." This is an open, standardized self-disclosure template that requires projects to fill in key information and provide supporting materials. The scoring mechanism will assign different weights based on the importance of the issues, ultimately generating an easy-to-understand rating.

Experts predict that projects that participate and receive high ratings may have their Tokens appreciate in the long term due to increased transparency. If this framework is widely adopted, it is expected to drive more institutional capital into the Token market. However, projects that view Tokens as arbitrage tools and lack real products may lose market favor as a result.

Overall, industry insiders generally believe that increasing transparency and establishing open standards are crucial for promoting the healthy development of the Token market. This not only helps attract more institutional investors but also allows resources to flow more effectively to projects that truly have product-market fit.