The trend in venture capital (VC) tokens sparked both attention and criticism after Bella was launched and continued to fall onto the cliffs. These VC tokens are typical crypto startups that have secured large amounts of funding from venture capitalists, even before the tokens are made public.
This path to token distribution was both Dr. Jeklin and Mr. Hid in the eyes of the crypto community.
Like a coin with a VC back $ bera As community repulsion grows more than token distribution, it's on fire. Is this the end of a bulging evaluation? #berabacklash #cryptocommunity #TokeneConomics #investsmart
– pratap (@mr_pratap_singh) February 10, 2025
VC Token Dilemma: Between Equity and Community in Cryptospace
A venture capital token is a model in which a cryptographic project attempts to build an infrastructure or application with initial funds. Before tokens come into the market, they assign many tokens to early launch investors and founders.
This pre-allocation ranges from 20% to over 60% of total supply. The idea is to use this capital to advance innovation before launch. This will disrupt the economics of tokens from the start and harm the perception of the community.
Bella Chine's Bella Token was released with high expectations and a “proof of liquidity” mechanism. Bella quickly became the focus of this VC controversy.
Its high full dilution rating (FDV) indicates that the initial token distribution was highly fond of early supporters at the expense of the community. A rebel that many in the crypto community have questioned the fairness and consistency of Crypto's decentralized principles.
(Belaus))
In contrast, community support tokens offer a different story. Projects like Uniswap are popularizing the concept of “fair launches.” They distribute tokens directly to users involved in the platform.
This approach actively promotes a sense of ownership among users. They are building communities that tend to invest in the long-term success of their projects rather than seeking short-term benefits.
These tokens often have a right to governance, allowing the community to guide the project in direction, leading to more sustainable growth and a loyal user base.
Uniswap itself has many holders, with the owners holding almost a small portion of the supply, with the largest cluster holding less than 1% of the total supply. This creates stability in the token because it cannot manipulate the price.
(sauce))
The market dynamics of VC tokens and community support tokens differ. Once the VC tokens are released, the market will see a huge volatility. This is because early investors will sell pre-allocated tokens and try to make a profit quickly.
This leads to a price drop before the project's utility proves itself. Marketing then plays a key role in maintaining or increasing the value of the token through hype, not through actual development of the project or community involvement.
Before Bella: Notorious for VC tokens and cryptography
I'll take a few examples such as Luminos (Lum) and Quantumlink (QTL). Luminos has launched in a massive hype and shows that token utilities are being exaggerated, with support from several well-known VC companies.
The team struggled with technical issues, including scalability issues that were not resolved despite the large amount of funding. Market sentiment became worse, and early investors began selling allocations. The value of Lum fell shortly after its launch.
(lumusd))
Another token that fulfilled a similar fate is Quantumlink (QTL). QTL has attracted several well-known VC investors with its vision to integrate quantum computing into encryption to improve security and speed.
However, the technology is far from a practical implementation, and the team has made no progress in integrating quantum mechanics into the blockchain.
The price of the token fell sharply as the market realized it was just another steamware. This discrepancy between ambition and reality, coupled with pressure from VC investors, has failed QTL to show a quick return.
The launch of Bella Chine's Bella Token has sparked controversy in the crypto community. Critics have raised concerns about whether these “VC coins” really provide community interest or whether they provide an exit strategy for early investors.
– Chainbrief (@chainbrief) February 10, 2025
VC tokens highlight the war against the principles of decentralization and the need for capital to promote innovation. Without a doubt, VC funding will accelerate technology development and provide the resources needed for ambitious projects.
But repulsions against tokens like Bella are growing demand for launches that are more closely aligned with the core values of crypto transparency, fairness and community engagement.
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Post-Venture Capital Token and Bella's Fall: Crypto-New Gold Rush or Gold Cage? It first appeared in 99 Bitcoin.
