ICO, IDO & Airdrops

:::section{mins=3} ICOs: the first token-sale wave :::

:::lead Ethereum sold ETH before its network existed in 2014. The sale ran for 42 days, and during the first 14 days one BTC bought 2,000 ETH. This kind of direct fundraising through a new token later became closely associated with the ICO model. :::

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An ICO (Initial Coin Offering) is a token sale used to finance a project. In the early versions, buyers often paid for an asset they could not use yet. Ethereum's genesis sale explicitly warned purchasers that ETH would not become usable or transferable until the network launched.

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The attraction was obvious. A team could raise capital from a global crypto audience without building the same distribution machinery used in traditional finance. The trade-off was equally important: buyers had to judge a project before many of the things they would normally inspect existed. What was actually promised? How much supply would go to insiders? When would those tokens unlock? Was there a product beyond a whitepaper?

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By 2017, the label ICO covered a very wide range of projects, from serious protocol teams to offerings with little more than a fundraising page. That is why the useful distinction is not “ICO versus safe.” An ICO is a distribution and financing format, not a quality certificate.

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The regulatory story also needs more nuance than “ICOs are securities.” In its July 2017 DAO Report, on a 2016 crowdfunded investment vehicle built on Ethereum, the SEC said the legal treatment of a digital-asset transaction depends on the facts and economic realities. It later stopped Telegram's $1.7+ billion Grams offering, while Block.one paid a $24 million penalty over its unregistered ICO. In March 2026, the SEC clarified that a crypto asset itself and an investment contract involving that asset are distinct questions. For a learner, the durable lesson is that legal status comes from the structure of a transaction and its jurisdiction, not the acronym used on a launch page.

:::callout Imagine an independent film raising money before shooting begins. You can inspect the script, the director's previous work, a cast list and a few concept images, but you cannot watch the finished movie because it does not exist yet. In return for joining early, you receive a special ticket that is supposed to become useful when the project launches. If production succeeds, being early may matter. If the film stalls, a beautiful script does not rescue the ticket. An ICO creates the same information gap: the team receives capital before buyers can inspect a finished product, so promises, supply structure and execution matter more than the label “early sale.” :::

:::keypoints{label="Key points"}

• “Early” in an ICO is often mistaken for “cheap.” The sale price per token can be low, yet if only 20% of supply was sold and the other 80% sits with the team and funds on future unlocks, you are buying into a structure whose main sellers have not arrived yet. Price the whole supply at the sale price rather than the single token (see §6).
• A pre-network ICO has no exit. Until the token trades it cannot be sold at any price, and the whole project risk stays with you with no way to change your mind. ETH buyers in 2014 waited about a year for the network to launch. The value of such a purchase therefore cannot be judged without knowing when it could be sold at all.
• KYC and a whitelist tell you the project manages its own legal exposure, not that it is sound. These checks protect the organizer from regulators and say nothing about the product, tokenomics or the team's honesty. It is more revealing to note which countries are excluded, because that hints at how the project's own lawyers read its status.
• Money raised in an ICO is not yet a project budget. If the treasury sits in the project's own token or in ETH, its spending power falls with the market, and a team that raised a large sum at the peak may control a fraction of it a year later. A useful question for any sale is what the treasury is held in and how many months of work it covers without selling tokens. :::

:::details{badge=Advanced title="from The DAO to the 2026 framework"}

:::further{label="Further reading"}

• Ethereum Foundation — Launching the Ether Sale | blog.ethereum.org
• SEC — The DAO Report / 2017-131 | sec.gov
• SEC — Application of the Federal Securities Laws to Certain Types of Crypto Assets (2026) | sec.gov :::

:::quiz{id=q-5-3-s1 label="Check yourself" correct=1 explanation="Correct. ICO is a distribution label, not a universal legal category. Current U.S. guidance distinguishes the crypto asset from an investment contract through which it may be offered."} Why is “an ICO token is automatically a security” too broad?

• Tokens outside the U.S. can never be regulated
• Legal treatment depends on the asset, the transaction, the promises made and the jurisdiction
• ICOs stopped existing after 2018
• Only company shares can ever be securities :::

:::section{mins=5} IEOs, IDOs, launchpads & LBPs :::

:::lead Modern token launches combine several independent choices: where the sale happens, who gets access, and how price is formed. IEO and IDO mainly describe the venue; lotteries and pro-rata subscriptions allocate scarce access; an LBP is a dynamic pricing mechanism. Treating them as one flat taxonomy hides the real trade-offs. :::

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So what actually separates an IEO from an IDO, when the token can be identical? The venue does. An IEO (Initial Exchange Offering) moves the sale onto a centralized exchange. The exchange selects the project, admits eligible users and handles settlement. That adds a gatekeeper between the team and the buyer, but the exchange is not a guarantor of the token's future price or security.

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An IDO (Initial DEX Offering) generally distributes tokens on-chain through a launchpad or decentralized venue. The exact access rules vary. A launch may use a whitelist, lottery, platform-token stake, per-wallet cap, KYC, or fully open access. So “IDOs are open to everyone” is just as misleading as “IEOs are safe because an exchange checked the project.”

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A launchpad is a venue, not one economic mechanism. It can run several allocation systems:

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• first come, first served — speed determines who gets in
• lottery — eligible participants are selected randomly
• pro rata / subscription — tokens are divided in proportion to commitments
• auction / price discovery — the sale itself helps determine the price.

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Pro-rata subscriptions run into oversubscription: more buy orders than tokens on offer. No one then receives their full request; orders are cut back under a pre-announced rule, and the excess money is returned.

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This is not hypothetical. In April 2023 Binance Launchpad sold the Open Campus (EDU) token, and 120,292 participants locked more than 9 million BNB in commitments, an oversubscription of 1,189 times. Someone who committed 50 BNB, roughly $16,000 at the time, ended up buying 277 EDU for about $14, with the rest returned to their account.

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In October 2025 the MegaETH public sale on the Sonar platform went the same way. The project offered 5% of supply for about $50 million and received $1.39 billion in commitments, 27.8 times more. Allocation there was not purely proportional: final shares weighed past community engagement and whether a buyer accepted a one-year lock-up, and the excess was refunded several weeks later. Analysts also flagged signs of Sybil activity among the bids, covered in §4.

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An LBP (Liquidity Bootstrapping Pool) is a different type of price-discovery sale. Token weights change over time, creating downward price pressure when demand is weak. The opening price is therefore often set deliberately high so that rushing into the first block is unattractive. But an LBP is not a countdown that forces price lower: buying can push the price back up. The realized path is the interaction between the programmed weight curve and actual demand.

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Be careful with the phrase fair launch, too. It has no single technical definition. One team means “no private sale,” another means open participation, and another means no investor allocation. Read the actual rules rather than the marketing label.

:::callout Imagine a limited batch of concert tickets. The organizer first chooses where to sell them: its own site, a major ticketing service, or an independent venue. That is one decision. Separately, it chooses how scarce tickets are allocated: first come, first served; a lottery among registered fans; or a pro-rata split across orders. Price is a third decision: fixed, auction-based, or governed by a changing rule. An LBP is closest to the last case: weak demand lets the mechanism pull price downward, while strong buying can push it back up. A reputable ticketing venue can improve distribution, but it cannot make the concert itself good. :::

:::keypoints{label="Key points"}

• An IEO on a large exchange is often read as that exchange vetting the project. The exchange has its own interest, though, earning on trading volume and user acquisition, so its launch selection serves those goals rather than yours. A post-IEO listing tells you the token will be tradable and nothing about whether it is worth holding.
• Under pro rata, participants often commit more than they intend to invest, counting on the cut. That works while oversubscription is heavy, but if demand turns out weak the commitment fills in full and the position ends up five times larger than planned. A pro-rata commitment is therefore not a wish but an obligation to buy the full amount stated.
• An IDO on a DEX is open to everyone, bots included. When a pool launches through a plain transaction, the first blocks are often taken by snipers who spot the launch in the mempool, buy ahead of people and sell straight back to them. Lotteries, per-address caps and LBPs exist to solve exactly this. Mempool mechanics are covered in 3.3 Transactions .
• The classic LBP mistake is buying in the first minutes out of habit, as if it were a regular sale. The mechanism sets a high opening price on purpose, so whoever hurries pays for speed. Waiting is not free either, since strong demand may keep the price from ever coming down, so there is no entry point in an LBP that is right in advance. :::

:::details{badge=Advanced title="allocation matters more than the label"}

:::further{label="Further reading"}

• Binance — Launchpad Subscription Format | binance.com
• Balancer — Liquidity Bootstrapping Pools | balancer.gitbook.io
• Fjord Foundry — LBP FAQ | help.fjordfoundry.com :::

:::quiz{id=q-5-3-s2 label="Check yourself" correct=2 explanation="Correct. The programmed weight shift creates pressure on price, while trades change pool balances. Actual price reflects both."} Which statement best describes an LBP?

• Its price falls every minute and can never rise
• Every participant receives the same number of tokens
• Weight changes shape the price path, while real demand can still move the price
• An exchange guarantees a floor after listing :::

:::section{mins=3} Airdrops & snapshots :::

:::lead On September 16, 2020, Uniswap launched one of the best-known retroactive airdrops: 400 UNI became claimable by each of 251,534 historical user addresses that had called the Uniswap v1 or v2 contracts. The important idea was not “free money” but turning past behavior into future ownership. :::

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An airdrop distributes tokens without a conventional purchase. Tokens may arrive automatically, but many campaigns require users to claim an allocation through a contract.

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Projects use airdrops for different goals: rewarding early users, distributing governance power, encouraging activity, or recognizing developers and community contributors. Do not reduce all of this to free marketing. An airdrop also does not automatically make a token decentralized. If most supply remains controlled by a small set of insiders, widely distributing a small slice does not erase that concentration.

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How does a project decide who receives what? It usually takes a snapshot of blockchain state and applies eligibility rules to historical data. Criteria can include:

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• product use and the number of active periods
• volume or liquidity, often with caps or nonlinear weighting
• staking, delegation or governance participation
• code, content, testing and other contributions that are not simply a function of capital.

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A snapshot makes timing important. If eligibility is calculated at block X, ten new transactions at block X+1 normally do not alter that particular snapshot unless the project announces another season or a different rule.

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“Free” is also relative. A user may have spent months paying gas, keeping capital in a protocol, accepting smart-contract risk and investing time. Claiming creates another attack surface: phishing pages and malicious signatures. That connects airdrops directly to 4.1 Scams and 3.3 Transactions.

:::callout Imagine a publisher deciding to send a gift to its subscribers by ordinary mail. At midnight on September 1 it exports the address list and sends it to print: whoever was in the database before the cutoff gets a parcel; a subscription taken out on the morning of September 2 does not change that print run. Then the publisher notices that one person created twenty nearly identical subscriber profiles to collect twenty gifts and tries to merge those records. That is a useful mental model for snapshots and Sybil filters. First history is frozen, then eligibility rules are applied, and only after that does each qualifying record receive a claimable allocation. Activity after the cutoff may matter later, but it cannot rewrite the frozen database by itself. :::

:::keypoints{label="Key points"}

• Not every airdrop arrives at once and in full. Some projects release the distribution gradually or tie the full share to conditions such as holding or staking the token. “Received 1,000 tokens” then means a right to them in the future rather than a balance in the wallet, and the value of the drop cannot be judged by what is sellable on claim day.
• Projects rarely announce a snapshot date in advance. When the date is known, activity gets inflated artificially in the days before it and the metric stops meaning anything. Trying to “make it before the snapshot” therefore usually means optimizing for a moment the project deliberately hid, with poor odds of guessing it.
• Airdrop recipients have a zero cost basis, and that shapes the market in the first days. Someone who paid nothing for a token sells it without hesitation, so selling pressure around the claim is often the heaviest the token ever sees. Prices in the first days after a distribution therefore tend to reflect selling by people who got the token for free more than the market's view of the project.
• The Uniswap story transfers poorly to the future. Early users in 2020 did not know about the airdrop and did not optimize for it, so “used the product” honestly separated people from farms. Once retroactive rewards became expected, the same criterion started being met on purpose, and projects had to tighten their filters, as §4 describes. :::

:::details{badge=Advanced title="turning a list into a claim"}

:::further{label="Further reading"}

• Uniswap — Introducing UNI | blog.uniswap.org
• OpenZeppelin — MerkleProof | docs.openzeppelin.com
• SEC — Crypto Assets Interpretation (includes airdrops) | sec.gov :::

:::quiz{id=q-5-3-s3 label="Check yourself" correct=3 explanation="Correct. A snapshot freezes state at a specific point. Later activity may matter to another season, but it does not automatically rewrite the closed sample."} A project takes its eligibility snapshot at block 20,000,000 and calculates the airdrop only from that state. What usually happens if you start using the protocol in the next block?

• Those actions automatically increase the already-frozen allocation
• Your address automatically becomes a Sybil address
• The project must recalculate the snapshot retroactively
• They do not change that snapshot unless a later season or rule includes them :::

:::section{mins=5} Airdrop farming & Sybil :::

:::lead In May 2024, LayerZero gave users who considered themselves Sybil farmers 14 days to self-report and keep 15% of their intended allocation; addresses identified later could receive nothing. Farming is therefore not just reward hunting—it is also a game against eligibility rules. :::

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Airdrop farming begins when the expectation of a future token changes what you do today. You make a swap not because you need the trade but because it creates another active day. You bridge a small amount mainly to leave an on-chain footprint. You keep liquidity in a protocol longer than you otherwise would because a future distribution may reward duration.

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There is no guaranteed recipe. A protocol having no token does not imply that an airdrop is coming. Even a public points program may leave the final token allocation undefined. The rational question is therefore not “what should I farm?” but “what am I spending for an uncertain probability?”

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A simple model is:

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expected result ≈ probability of eligibility × expected allocation value − fees − capital opportunity cost − time

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Every input is uncertain. Criteria can change, caps can appear, an address can be filtered, or the project may never launch a token. Capital cost is particularly easy to miss because it never shows up in a transaction. It is an opportunity cost. If you park $10,000 for three months where it earns almost nothing just to collect points, you give up what that money would have earned elsewhere. Even a Treasury-backed savings wrapper from 5.2 would pay around 4% a year, roughly $100 for the quarter, and that is a real cost of participating even when gas is nearly zero.

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The most contested category is Sybil farming. To see why projects fight it so hard, it helps to start with the word itself.

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A Sybil attack is when one participant poses as many in order to gain more votes, weight or rewards than they are entitled to. The term was coined by Microsoft Research's John Douceur in a 2002 paper, borrowing the name from “Sybil,” a 1973 book about a woman with multiple personalities. The paper's central result is uncomfortable: without an authority vouching for each identity, such attacks cannot be ruled out entirely.

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On an open blockchain a new identity costs nothing; it is just another address, created in a fraction of a second. Any system that hands out something “per participant” eventually runs into this problem. Consensus solved it bluntly by tying voting weight to a scarce resource rather than to the number of nodes: computing power in PoW, staked coins in PoS. You can split a stake across a hundred addresses, but you gain no weight by doing so, as covered in 1.3 Consensus.

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Airdrops work the other way round, which is why they are exposed. If a project wants to reward people rather than capital, it cannot weight rewards by balance, or nearly everything flows to large holders. Rewards are therefore counted per address, and one person with a hundred wallets looks like a hundred users. Sybil farming exploits exactly that: a farm runs many wallets designed to look independent so the allocation is multiplied.

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Projects respond with address clustering, funding-source analysis, repeated action patterns and other heuristics, and sometimes with proof-of-personhood systems that verify a distinct human stands behind an address, at the price of revealing some personal data. No detector is perfect. A rigid farm is easier to link; a broad filter creates more false positives.

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LayerZero made that conflict unusually visible in 2024. Its self-report phase offered 15% of the intended allocation, followed by project-led detection and a bounty process. The case is more useful than any list of “transactions to farm”: the project owns the eligibility rules, and those rules can change before distribution.

:::callout Imagine a closed beta game whose developers hint that active testers may receive a rare founder skin, without revealing the exact criteria. One player simply enjoys the game and files useful bug reports. Another logs in for five minutes every day to maximize an activity counter. A third creates fifty accounts and runs the same route on each, hoping for fifty rewards. The database shows “activity” in all three cases, but the developer sees three very different behaviors. Airdrop farming works the same way: the more a user optimizes for a guessed metric, the further the behavior can drift from genuine product use—and the easier it becomes to justify filtering it. :::

:::keypoints{label="Key points"}

• Farming has a break-even point, and it rises with fees. If participation costs $150 in gas and time and the typical reward turns out to be $300, the result is positive. If a cap trims the reward to $100, the same costs are underwater. Identical actions turn out profitable or loss-making depending on a decision the project makes after you have already paid for them.
• A genuine user with several wallets can be flagged as a farm if all of them were funded by one exchange withdrawal. To an algorithm, a shared first funding source looks like one owner. That makes an appeals process matter to more than farmers, and it is worth checking whether a campaign offers one at all before taking part.
• Anti-Sybil numbers are sometimes published, and they show the cost of errors. In 2024 LayerZero first flagged more than two million addresses as suspicious, then narrowed its criteria to hit fewer genuine users, and the published list ended up at around 800,000, roughly 13% of the six million eligible. The gap between the two figures is what the project gave up to reduce false positives.
• Time is the most undercounted cost in farming. Fifteen minutes a day across a few protocols adds up to roughly 45 hours over six months. With a final reward of $300 that is under $7 an hour, with a real chance of getting nothing. Time almost never enters the calculation because it does not show up in a wallet. :::

:::details{badge=Advanced title="why Sybil detection is never perfect"}

:::further{label="Further reading"}

• LayerZero — Addressing Sybil Activity | layerzero.network
• Human Passport — Sybil resistance concepts | docs.passport.xyz
• 4.1 Scams — phishing around claim campaigns | card 4.1 :::

:::quiz{id=q-5-3-s4 label="Check yourself" correct=0 explanation="Correct. Multiple wallets are normal, but using them to simulate independent users can trigger a campaign's Sybil rules."} Why is “I used 10 wallets, so I should receive roughly 10× the airdrop” a weak model?

• A campaign can cluster those wallets and exclude them under its Sybil rules
• Blockchains prohibit users from owning multiple addresses
• All airdrops require passport identity
• One private key can control only one address :::

:::section{mins=3} Points before tokens :::

:::lead Hyperliquid started its points program on November 1, 2023 and distributed 1,000,000 points per week for six months, followed by a phase distributing 700,000 weekly. The score was visible, but points were not tokens and came with no fixed exchange rate. :::

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Points are internal units used to score activity. They became popular because they solve one frustration of classic airdrops: users can see that their behavior is being counted before a token generation event (TGE). The mistake is to treat that visibility as a guaranteed conversion. A point is not a token unless the program explicitly creates that right.

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Any points campaign has three separate layers:

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• the earning rule — what earns points: volume, liquidity, active days, referrals or specific products
• the season rule — when the period ends, whether multipliers change and whether earlier calculations can be revised
• the distribution rule — what, if anything, happens to points after the season.

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The last layer is critical. The outcome may be a token allocation, product access, another rewards system, or nothing with a fixed financial value. A visible score is not the same thing as a promised payout.

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Hyperliquid illustrates both the power and the ambiguity. Its public docs described weekly point distributions and explicitly reserved the right to modify criteria and previous distributions. Later, approximately 31% of the initial HYPE supply was distributed to early users around the network launch. The correct lesson is not “one point converted into X HYPE”—the points program never published a fixed exchange rate like that.

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Why run points at all instead of a plain airdrop? For protocols, points delay the actual token reward while shaping behavior today. For users, the mirror image matters: capital, fees and time are spent now while the eventual reward remains unknown. A quoted “10% yield in points” cannot be added to an ordinary APY until those points have a defensible monetary value.

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Points also compete for liquidity. If two protocols offer similar base yields and one adds a points campaign, users begin pricing a possible future token into today's capital allocation. That can bootstrap usage, but it does not guarantee that capital remains after a snapshot or TGE.

:::callout Imagine a class where the teacher awards points all semester for homework, projects and attendance. You can see your score—820 points versus a classmate's 640—but the teacher has not said whether 800 means an A, a place in the top 10%, or merely permission to take the final exam. The score is transparent; its final value is not. You can compare activity, but you cannot honestly put “A” on your transcript yet. Crypto points work the same way: they make accounting visible, but without an explicit conversion rule they do not become a financial claim against the protocol. :::

:::keypoints{label="Key points"}

• Your points dilute even if you never spend them. Final allocation is computed against everyone's total, and that total grows all season. If the pool doubles by the end, the same 10,000 points buy half the share. Watch your share of the total rather than your balance, if the project shows it.
• Points rules can almost always be changed retroactively, and there is nothing to argue about later if the terms were never recorded. Screenshots of the rules and leaderboard from the dates decisions were made are therefore often the only way to tell later whether the program changed or was misread from the start.
• Referral multipliers shift rewards from people using the product to people recruiting others. When a notable share of points comes from invites, your activity in the protocol itself weighs less than the formula suggests. If the project discloses what share of points comes from referrals, that figure says a lot about what the program really measures.
• Points shift who carries the uncertainty. The protocol defers its cost to the TGE, while the user pays in fees and locked capital today. A simple consequence follows: the longer a season runs, the better the program works for the protocol and the more it costs you. :::

:::details{badge=Advanced title="three kinds of points uncertainty"}

:::further{label="Further reading"}

• Hyperliquid Docs — Points | hyperliquid.gitbook.io
• Eigen Foundation — EIGEN Stakedrop | blog.eigenfoundation.org
• 7.1 Tokenomics — supply, allocation and unlocks | card 7.1 :::

:::quiz{id=q-5-3-s5 label="Check yourself" correct=2 explanation="Correct. Points record activity under the program's rules. Without distribution and conversion terms, they do not create a fixed monetary claim."} You have 50,000 points, but the project has published neither a token allocation nor a conversion formula. What can you state with confidence?

• You already own the equivalent of 50,000 tokens
• You are guaranteed more money than a user with 40,000 points
• The program currently records 50,000 points for you, but their monetary value is still unknown
• You can add the points to your APY using the token's current market price :::

:::section{mins=5} How to evaluate a launch :::

:::lead Token price is almost meaningless on its own. In a simple example, a token at $0.10 with a maximum supply of one billion has a $100 million FDV; if only 10% circulates at launch, circulating market cap is about $10 million. One “cheap” token produces two very different valuation numbers. :::

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Before entering a token sale, airdrop or points campaign, split the analysis into separate questions instead of relying on a binary green-flag/red-flag checklist.

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Two figures in this section need defining up front. Market capitalization (market cap) is the token price multiplied by the number of tokens in circulation, in other words what all currently tradable tokens are worth. Fully diluted valuation (FDV) is the same price multiplied by the maximum supply, including tokens that are still locked or not yet issued. While only part of the supply circulates, the first figure is always smaller than the second, and the gap shows how many tokens the market still has to absorb.

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Start with valuation. FDV (Fully Diluted Valuation) prices the maximum supply at the current token price. Circulating market cap uses only supply already in circulation. A wide gap is not automatically bad, but it is a reason to open the unlock schedule and see who receives the rest.

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Then inspect vesting. A small initial float can make price unusually sensitive to modest buying and selling. Months later, liquid supply may expand materially. “What price am I paying?” should therefore sit next to “what share of future supply does this price imply?”

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Keep project quality and security as separate dimensions. An anonymous team is not automatically fraudulent; a famous VC does not make a protocol safe. An audit can reduce some code risk without validating tokenomics, admin-key design or a business model. Those are separate checks.

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Airdrop claims need their own safety rule: do not send assets to an unknown address for “verification” or to “unlock” a supposedly free allocation. A legitimate claim may still require gas and an on-chain transaction, so “any request to pay anything is 100% a scam” is also too broad. Verify the domain through multiple official channels, inspect the claim contract, understand the signature and review approvals. A low-balance dedicated wallet can limit damage when interacting with a campaign you do not fully trust. See 4.1 Scams and 4.4 OpSec.

:::callout Imagine booking a venue for a large event. The ad says “only €500,” but that number is useless without the terms: how many hours are included, what deposit is required, when it is refundable, what security costs, whether cancellation is allowed and what happens if twice as many guests arrive. A token at $0.10 is the same kind of headline number. FDV shows the scale of the whole bill, circulating supply shows what is available now, vesting tells you when more obligations arrive, and liquidity tells you how easily you can enter or exit. Good decisions start with the full set of terms, not one attractive price. :::

:::keypoints{label="Key points"}

• A low launch float amplifies price moves in both directions. With 5% of supply circulating, modest demand easily lifts the price, and that price is what the quoted FDV is computed from. The same thin market lets the first unlocks push the price down just as easily. A high launch valuation on a small float says more about market depth than about the project.
• An unlock date is not a sale. Investors may hold, stake or sell gradually through OTC deals. It is more useful to watch what the unlocked addresses actually do, for example whether they move tokens to exchange wallets. Such transfers are visible on a block explorer and reveal intent more precisely than any schedule.
• Each signal covers a narrow slice. An audit speaks for the code at review time, an investor for access to capital, a public team for reputational cost, and none of them speaks for supply structure or the unlock schedule.
• When comparing launches, trading volume is easily mistaken for liquidity. A big first-day volume can come from the same few participants trading with each other, while real liquidity is order-book or pool depth, meaning how much you can sell without moving the price by 2%. That depth decides whether you can exit when you want to. :::

:::details{badge=Advanced title="a toy valuation example"}

:::further{label="Further reading"}

• 7.1 Tokenomics — market cap, FDV, vesting and unlocks | card 7.1
• SEC — Transactions Involving Crypto Assets | sec.gov
• 4.1 Scams — + [4.4 OpSec] — claim and signature safety | card 4.1 :::

:::quiz{id=q-5-3-s6 label="Check yourself" correct=1 explanation="Correct. Unit price says nothing about valuation without supply. Small float and future unlocks are parts of the same picture."} A token trades at $0.05, but only 5% of its maximum supply is circulating. Which conclusion is sound?

• It is cheap because the unit price is below $1
• First calculate market cap and FDV, then inspect the future unlock schedule
• Its price must rise as the remaining 95% unlocks
• FDV is irrelevant until all supply has unlocked :::