As the overall cryptocurrency market declines, the prices of some tokens have dropped by 80%-90% from their peak. bitsCrunch has established an evaluation system for 2 million tokens in the market based on 16 specific indicators with different weights, using AI algorithms as an important tool for measuring project credibility and market health.
Through the analysis of the latest data, we found that the token reputation scores exhibit a significant pyramid structure, with the vast majority of tokens concentrated in the "Average" and "Fair" ranges, while high-scoring tokens are extremely scarce. This phenomenon not only reflects the high differentiation in the market but also reveals deep differences in token quality across different public chains. This article will explore the driving factors behind this phenomenon and the future market trends in conjunction with the influencing factors of reputation scores.
Token Reputation Index: Only 14 Tokens Rated Excellent
Data Source: bitsCrunch.com
From the overall data, most tokens are still issued on Ethereum. According to bitsCrunch data, the number of token addresses issued on Ethereum accounts for 54.56% of the total, far exceeding Polygon (451,349, accounting for 21.88%) and third-place Base (336,616, accounting for 16.32%). Avalanche (120,587, 5.85%) and Linea (28,264, 1.37%) are relatively behind.
Data Source: bitsCrunch.com
From the token reputation score table, the overall data trend presents a pyramid shape. From the perspective of reputation scores, the vast majority of tokens hover in the "Average" and "Fair" low to mid-level scoring ranges. Among all tokens issued on Ethereum, approximately 116,347 tokens are at an average level, and 573,739 tokens are at a fair level. In the excellent and good ratings, the number of tokens across various blockchain platforms is extremely limited. Ethereum has 7 tokens rated excellent and 310 tokens rated good.
Polygon and Base rank second and third in total token numbers, respectively. For example, among Polygon's 450,000 tokens, 5 are rated "Excellent," while tokens in the "Fair" and "Terrible" ranges account for as much as 96.7%. In Base's 336,000 tokens, the "Fair" range accounts for 75.6% (254,482 tokens), and there are 67 tokens in the "Average" range.
It is noteworthy that although the total number of Avalanche tokens is only 10.7% of Ethereum's (120,587), its proportion of tokens in the "Average" range (4,865) reaches 4.03%, significantly higher than Ethereum's 0.34% (116,347).
The Ethereum ecosystem has attracted a large influx of projects, but it has also led to a severe "long tail effect"—the coexistence of a few high-quality projects with a massive number of low-quality tokens. In contrast, emerging chains like Polygon and Avalanche perform reasonably well in the "Average" range.
Influencing Factors of Reputation Scores: Common Defects of Low-Scoring Tokens
The token reputation index consists of multiple dimensions, including token issuance time, liquidity pool size, holder distribution, and 16 other influencing factors. By comparing the characteristics of high and low-scoring tokens, we can identify common issues among low-scoring tokens:
1. Insufficient Liquidity and Low Market Participation
Low-scoring tokens generally have low liquidity pool sizes and liquidity participant scores. For example, the median liquidity pool size of tokens in the "Fair" range on the Ethereum chain is only 1/5 of that of high-scoring tokens, with a low number of participants. Insufficient liquidity directly leads to severe price fluctuations of tokens, further undermining market confidence.
2. Excessive Concentration of Holders
Holder distribution is a core indicator of the decentralization level of a token. Data shows that the top 10 holders of tokens in the "Terrible" range on Ethereum account for a significantly higher average proportion than those under the "Excellent" rating. A highly concentrated holder structure is prone to market manipulation risks, which is one of the main reasons low-scoring tokens are avoided by investors.
3. Insufficient Trading Activity and Profitability
In terms of trading dimensions, low-scoring tokens lag significantly in trading volume scores and profitable trader scores. High-scoring tokens attract more long-term investors through stable trading volumes and positive profit expectations.
Market Share and Ecological Strategies
The correlation between the number of tokens and reputation scores reveals differences in ecological strategies across different blockchain platforms. As one of the most mature blockchains, Ethereum has both ecological advantages and disadvantages. On one hand, Ethereum, with its comprehensive development tools, large user base, and rich DeFi infrastructure, has become the preferred platform for token issuance; on the other hand, its high gas fees and network congestion issues have forced many projects to turn to low-cost chains (such as Polygon and Base), which still need to strengthen liquidity depth and user stickiness.
In contrast, the ecosystems of Polygon and Base are also rapidly expanding. For example, the total number of tokens on the Base chain is nearly three times that of Avalanche, but many projects in the ecosystem are still in the early stages. Meanwhile, Avalanche and Linea are also attracting specific projects through technological differentiation, but they are still limited by their user base.
Conclusion
Since the last bull market, the number of tokens has shown exponential growth. The current token market exhibits a clear polarization. In the future, as regulations tighten and investors become more professional, the token reputation index may also become a core tool for screening quality assets—only those projects that develop in a balanced manner across dimensions such as liquidity, holder distribution, and trading sustainability can become the "MAG-7" in the crypto field, gaining an advantage in the next phase of market reshuffling.
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