Mechanism Capital Co-Founder: The Best Token Economy Model Design Is Not To Put Lockup Limits On Investors

Andrew Kang, co-founder of Mechanism Capital, said in a post on the X platform, “It sounds counter-intuitive, but the best design for a project's token economy model is to not put lock-up limits on investors and to get as many tokens in circulation as possible on day one (except for team and treasury shares.) A 1-year lock-up period plus a 3 to 4 year release period is a poor standard that stems from a misunderstanding of capital markets and lazy replication of previous projects. In reality, longer unlocking restrictions have little to no impact on investor commitment post-TGE, and good investors will support projects regardless of whether the tokens have been unlocked or not. Industry standards need to change.”