Why Most Crypto Rounds Get Priced Wrong

in 2025, more than 11.6 million crypto tokens went to zero. that's CoinGecko's number, not a manifesto headline — and it accounts for over 86% of all token failures recorded since 2021. compressed into a single year. some were memecoins that were always going to die. but a meaningful share of the carnage came from venture-backed, tier-one-VC-stamped, exchange-listed projects that raised serious capital at serious valuations and then unwound — sometimes within weeks of going live.

the easy explanation is "the market was bad." it wasn't. the s&p hit highs. bitcoin held above $100K for most of the year. what was bad was the pricing of the rounds themselves — the gap between what allocators believed they were buying and what they actually were.

this piece walks through three of the more instructive 2025 failures: movement labs, mantra, and milkyway. each was funded by names you'd recognise. each crossed deal terms most allocators never see. and each got priced on a story that the structure couldn't support.

Movement Labs: The $38M token dump that should have been priced in

movement labs was, on paper, one of the cleanest 2025 setups in crypto. founded by two 22-year-old vanderbilt dropouts. raised $38 million pre-token. earned a spot in world liberty financial's portfolio. by january 2025, Reuters reported the team was wrapping a series B that would have valued the company at $3 billion. a move-VM ethereum L2 with the kind of distribution most projects only dream about.

the MOVE token launched on binance on december 9, 2024. within 24 hours, wallets later linked by Binance's internal investigation to a market maker had sold roughly 66 million tokens — about 5% of total supply — into the open market. the proceeds: approximately $38 million. binance froze the account for what it described as misconduct and alerted both movement labs and the movement foundation.

according to a Decrypt summary of CoinDesk's reporting, the foundation believed it was contracting Web3Port — a chinese market maker — to provide liquidity for the launch. but internal documents reviewed by CoinDesk allegedly show that an entity called Rentech — a firm with no meaningful digital footprint at the time of contract signing — appeared on both sides of the agreement. once as Web3Port's representative, once as an agent of the movement foundation itself.

according to CoinDesk's reporting, the foundation's own general counsel (yk pek) flagged an early version of the rentech proposal as "possibly the worst agreement" they had ever reviewed. a revised version was nonetheless signed on december 8, 2025 — one day before the token launched. one provision allegedly allowed web3port to liquidate tokens if MOVE's valuation hit $5 billion, splitting profits with the foundation. an arrangement that legal commentators quoted in those reports characterised as creating clear pump-and-dump incentives.

movement labs, for its part, has stated that it was misled, that the foundation believed rentech to be a legitimate web3port subsidiary, and that no insider sold tokens ahead of schedule. co-founder rushi manche was suspended on may 1, then terminated. co-founder cooper scanlon stepped down as CEO. coinbase delisted MOVE on may 15. the project rebranded as move industries. the MOVE token, which peaked at roughly $1.45 in december, traded at around $0.16 by may — an 84%+ drawdown that vapourised over $2 billion in market cap.

but here's what's instructive for anyone pricing a deal: this wasn't a market failure. it was a structure failure. the deal terms that destroyed the project were signed before the token ever traded. they were sitting in the foundation's legal files. and they were materially different from what most allocators in the round would have understood the cap table to be. the round was priced on a story that the contracts didn't tell.

Mantra: When fully diluted valuation is fiction

if movement is the case study for opaque side agreements, mantra (OM) is the case study for fictional float. the april 2025 OM crash was, in one trading session, one of the most violent re-pricings of any major altcoin in recent memory. CryptoSlate, BlockEden, and others have all covered the aftermath in detail.

here's the part that matters for pricing rounds. allocators were valuing mantra against a fully diluted valuation that implied a particular distribution of token holders. according to multiple post-mortem analyses, critics on the ground alleged that the team or insiders may have controlled as much as 90% of the circulating supply at various points before the crash. BlockEden cited public on-chain data showing that in the week before the crash, at least 17 wallets deposited 43.6 million OM (approximately $227 million) to exchanges — two of those wallets allegedly linked, per Arkham data referenced in that reporting, to Laser Digital.

mantra's founders publicly disputed the framing, attributing the crash to forced exchange liquidations. that may all be true. but the structural read-through doesn't depend on resolving the dispute. if a meaningful portion of "circulating" supply sits in addresses controlled by a small set of related parties, then the fully diluted valuation an allocator priced against was always fictional. the cap-table-on-screen didn't match the cap-table-in-practice.

this is the most common pricing failure in crypto, and the one that's hardest to catch from the outside. you can't diligence what isn't disclosed. and when even tier-one allocators are pricing rounds without the full distribution picture, the entire stack of downstream pricing — secondary OTC, retail listing, FDV-implied targets — sits on a foundation of incomplete information.

MilkyWay: When unit economics aren't priced in

not every collapse involves alleged misconduct. some are simpler. milkyway raised $5 million in seed funding led by polychain capital, with binance labs and crypto.com participating. by the time the $MILK token launched in april 2025, the protocol had accumulated more than $80 million in restaking total value locked and over 300,000 users — the kind of numbers that would justify a meaningful follow-on round.

according to The Merkle's reporting on its eventual shutdown, the team made a structural choice early: milkyway retained only 10% of staking fees, leaving the protocol with a very small slice of the economic activity happening on its rails. when adoption plateaued and operational costs continued, the team concluded the project could not sustain itself.

this is the simplest kind of mispricing. the seed round was priced on a TVL ramp the unit economics couldn't support. there was no scandal, no insider sale, no exchange ban. just a fee structure that didn't capture enough of the value the protocol enabled. polychain, binance labs, crypto.com — three of the most sophisticated allocators in the space — and the structure still didn't price the runway against the take rate.

Three projects. One root cause.

across these cases, a few different things broke. but one thing was consistent: every round got priced on the narrative the founder told, not on the structure the contracts actually described.

Four structural mistakes investors keep paying for

look across these three and a wider universe of recent post-mortems — slingshot, polynomial, nifty gateway, vega protocol — and a handful of repeat patterns surface. these aren't unknowable risks. they're known patterns that get overlooked when momentum is doing the diligence.

The five questions a properly priced round actually answers

none of this is an argument against crypto rounds. it's an argument against priced-on-narrative crypto rounds. a properly priced deal is one where the cap-table-on-screen matches the cap-table-in-practice, the take rate funds the team, and the contracts the foundation has already signed are on the table before the lead writes the cheque.

• Who owns what, actually? Full on-chain distribution analysis. Every advisor agreement. Every market-maker loan. Every side letter.
• What does the foundation actually look like? Director overlap with the operating company. Legal counsel independence. Track record on prior token treasuries.
• What's the take rate, and what runway does it fund? Not TVL. Not users. Actual fee capture, modeled against fixed and variable costs.
• What's the unlock schedule, in practice? Lock-ups are easy to write and easy to evade through loaned-token arrangements. Read the market-making contracts.
• What did the legal counsel object to? Internal dissent is the strongest leading indicator of structural risk. If the counsel called it the worst agreement they'd seen, the round is already overpriced.

One question worth sitting with

across the three cases above — and across nearly every major 2025 collapse where the contracts later leaked — the structural risk was readable before the token ever traded. the deals were signed. the counsel had objected. the wallet concentration was on-chain. nobody had to wait for the price chart to tell the story.

so the question isn't really "how do we avoid the next one?"

it's: how did so many of the most experienced allocators in the world price these rounds anyway?

References

All factual claims in this article reference publicly available reporting. We encourage readers to consult the primary sources directly.