Recently, tokens within the TON ecosystem have seen a drastic decline in value, with many of the largest tokens dropping between 30% to 50% from their all-time highs. This article explores the potential reasons behind this significant collapse.
A Summary of the Decline
Among the notable tokens affected are DOGS, which fell by 58%, Hamster Kombat (HMSTR), and Catizen (CATI). The Toncoin token has also seen a decrease of over 8% in the past week. Trading volumes across these tokens have plummeted by more than 27%, dropping to approximately $675 million. The sell-off is evident, with traders eager to unload what were once sought-after tokens.
1. DOGS Token Plummets
Since its listing on August 26, DOGS has experienced a staggering decline of more than 58%, dropping to $0.0006599. This token had an 81.5% supply derived from community contributions, but the absence of a vesting period allowed users to sell their DOGS immediately after the airdrop, leading to a rapid devaluation. In response to this price collapse, the DOGS development team announced a token burn to help reduce the total supply. Historically, token burns aim to increase value by decreasing circulating supply.
2. Hamster Kombat’s Unfulfilled Expectations
Hamster Kombat initially generated excitement in the community, but it quickly turned bearish following the token distribution. Although the token price reached $0.014 at launch, it has since lost 50% of its value. User dissatisfaction stemmed from several issues, including complaints about the airdrop distribution, changes in the token’s listing date, and the low initial trading price. Users also faced challenges in selling their HMSTR tokens due to restrictions imposed by exchanges, limiting their ability to capitalize on the distribution.
3. Changes in Catizen’s Distribution Rules
Catizen has followed a similar trajectory to Hamster Kombat. Shortly before the airdrop, the developers unexpectedly altered the distribution rules, reducing the percentage of CATI tokens allocated for players from 43% to 30%. This change, combined with a structure that favored those investing money over time, sparked outrage in the community. Many players shared their grievances on social media, leading to the hashtag #catizenscam trending among discontented users.
4. General Trends Among Telegram Project Tokens
Airdrops have become a common strategy for engaging users within the TON ecosystem. However, the effectiveness of this approach appears to be diminishing as users grow weary of constant distributions. Research by KeyRock indicated that 88.7% of tokens distributed through airdrops experienced significant price declines within 90 days. Smaller airdrops have demonstrated slightly better short-term resilience due to lower selling pressure, but long-term trends show declines as well.
5. The Hype Cycle of New Tokens
The current landscape of newly launched tokens in the TON ecosystem typically follows a hype cycle. Initial expectations often exceed reality, leading to steep declines as the initial excitement wears off. CryptoQuant analyst Maartunn noted that many meme coins are likely to fail unless they are backed by solid fundamentals and strong community support.
The graph of HMSTR transactions relative to all TON transactions illustrates this hype cycle phenomenon, demonstrating that while excitement can drive initial interest, sustainability is often lacking.
Conclusion
The recent collapse of major TON tokens underscores the challenges facing new projects in the cryptocurrency landscape, particularly those relying heavily on airdrops and speculative trading. As the market evolves, both developers and investors must navigate these fluctuations carefully to identify projects with genuine potential for long-term growth.
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