Tokens Are A Lemon Market…Here’s How To Fix It
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If crypto tokens were used cars, how would you tell a bargain from a clunker? The answer might have spared investors in Libra or Hawk Tuah a lot of pain.
According to a study by Solidus Labs, nearly 99% of tokens on DIY meme platform Pump.fun collapse into worthless pump & dump schemes. On Raydium’s DEX, the firm found roughly 93% of token liquidity pools have ‘rug pull characteristics.’
An analysis of token promotions on Telegram by CertiK found that nearly half of the 93,930 new tokens promoted between 2023 and 2024 were involved in deceptive exit swindles — an astonishing 46,526.
Fraudsters got 282,699.96 ETH off the back of these cons, roughly $800 million.
The numbers are staggering — and not just the losses. Tokens proliferate at a pace that makes it all but impossible for buyers to discern a promising investment from a money-losing sinkhole.
But experts say volume isn’t the issue , it’s lack of transparency. A dearth of reliable information has created what 1970s economist George Akerlof called A Market for Lemons, where information asymmetry can cause entire markets to collapse.
Are tokens broken?
In a recent presentation at Blockchain VC DBA’s Research Day 2025, Theia Research co-founder Felipe Montealegre captured the nub of the problem.
“In Akerlof’s model, there are peaches and there are lemons. Peaches are good, but lemons don’t work, and even if you …
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