Four Major Misconceptions About Token Issuance for New Projects and Actual Performance

A recent study analyzed 50,000 data points from 40 major token issuances in 2025, revealing that some common views circulating in the crypto community are actually not valid.

The Myth of Participation

Many projects spend a lot of money on participatory marketing, task platform promotion, and buying followers. However, research shows that these engagement metrics have almost no correlation with price performance, with a correlation coefficient R² of only 0.038. In fact, likes, comments, and shares are even slightly negatively correlated with price performance.

The only weak positive correlation observed is the volume of shares in the week prior to issuance, but the correlation is also very weak. Therefore, investing a large amount of funds in these activities is actually ineffective.

Misconceptions of Low Circulation

It is generally believed in the industry that tokens should be issued with a very small circulating supply to create scarcity and drive up prices. However, research shows that the ratio of initial circulating supply to total supply has no correlation with price performance.

What really matters is the dollar value of the initial market capitalization. Data shows a clear relationship between the two: for every 2.7 times increase in initial market capitalization, the price performance in the first month decreases by about 1.56%. The key is the total dollar value entering the market, rather than the proportion of unlocked Tokens.

The Illusion of Financing Scale

The general view is that projects that secure large amounts of financing will perform better, but data shows that there is actually no statistically significant correlation between the amount of financing and Token performance.

The higher the financing amount, the higher the valuation usually means, and the greater the selling pressure that needs to be overcome. Additional funds do not automatically translate into better Token performance.

The Fallacy of Timing the Issuance

Traditional views suggest that the most important news should be released during the project launch week to maximize the FOMO atmosphere. However, data shows that the reality is quite the opposite.

User participation often declines after the project launches. Well-performing projects usually establish their reputation before the launch, rather than during the launch week. Attention before the launch can bring in real buyers, while attention during the launch week often only attracts passersby.

The truly effective method

Research shows that the following factors are more important for project success:

1. Actual product utility: Projects that can generate content naturally perform better.

2. Trading retention rate: Tokens that maintain trading volume after initial hype show significantly better price performance.

3. Reasonable initial market value: this is the strongest predictive indicator of success. Listing at a reasonable valuation allows for growth potential.

4. Authentic communication: A consistent tone that matches the product is more conducive to project development.

Conclusion

The practical approach of successful projects is: focusing on building useful products, reasonable pricing, sincere communication, and paying attention to truly important metrics. Projects that quietly build useful products and release them wisely often achieve better long-term results than those that cater to social media algorithms.