@genevieve67

When token distribution is skewed toward opportunistic or early participants, high-quality holders may exit, creating a “bad money drives out good money” scenario. This can undermine ecosystem stability, reduce token utility, and erode trust. To avoid this, projects can design allocations that reward long-term engagement, development contributions, or governance participation, rather than mere acquisition. Vesting schedules, usage-based distributions, and incentive alignment are effective tools. Ensuring that token distribution favors committed users maintains liquidity, encourages adoption, and strengthens network effects. By mitigating the “bad money” effect, projects create a balanced ecosystem where token value is supported by active participants and sustainable use rather than opportunistic dominance.

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