@christopher443
Token distribution can face a “bad money drives out good money” scenario if poorly designed, where early recipients or large holders dominate, reducing incentives for active engagement. Concentrated holdings may encourage rapid selling, arbitrage, or opportunistic behavior, undermining ecosystem health. When low-quality distribution outweighs merit-based allocation, tokens lose functional value and liquidity may suffer. Projects can mitigate this by implementing fair distribution mechanisms such as vesting schedules, progressive airdrops, or usage-based allocations. Balanced and strategic token allocation ensures participation from committed users, developers, and contributors, creating a healthier ecosystem where value accrues to active participants rather than opportunistic actors, stabilizing long-term token utility and growth.
0 reply
0 recast
0 reaction