This prediction market focuses on the post-launch valuation of Extended's native token, specifically whether its Fully Diluted Valuation (FDV) will exceed a predetermined threshold exactly one day after its public trading debut. FDV represents the theoretical maximum market capitalization of a cryptocurrency, calculated by multiplying the total token supply by the current market price. The market resolves based on the FDV at 4:00 PM Eastern Time on the calendar day following the official launch, defined as when the token becomes actively and publicly transferable on trading platforms. This type of market is significant in the crypto ecosystem as it serves as a real-time sentiment gauge on a project's initial valuation success, often reflecting investor confidence in its tokenomics, utility, and long-term growth prospects beyond the initial hype. Recent years have seen increased scrutiny on high FDVs at launch, particularly following the 2021-2022 bull market where many tokens launched with multi-billion dollar FDVs only to decline substantially, making post-launch FDV performance a key metric for assessing sustainable value. Interest in this market stems from traders, project teams, and analysts who use it to hedge positions, benchmark performance against competitors, and understand market expectations for new crypto economic models.

Historical Context

The concept of Fully Diluted Valuation gained prominence during the initial coin offering (ICO) boom of 2017-2018, where projects would sell tokens representing a fraction of a large total future supply. High-profile launches like EOS, which reached an FDV of over $12 billion during its year-long ICO, demonstrated the potential scale but also the risks of high initial valuations with unlocked future supply. The decentralized finance (DeFi) summer of 2020 introduced new launch models like liquidity bootstrapping pools (LBPs) and fair launches, which aimed to create more democratic price discovery. However, the 2021 bull market saw a return of high-FDV launches, exemplified by tokens like Internet Computer (ICP), which debuted with an FDV exceeding $90 billion in May 2021 before falling over 95% from its launch price. This pattern led to increased market focus on 'FDV reality checks' in the subsequent bear market. The collapse of projects like Terra/Luna in May 2022, partly attributed to unsustainable tokenomics and inflation, further cemented investor scrutiny on total supply and emission schedules. Precedents like the launch of Arbitrum's ARB token in March 2023, which achieved an FDV of approximately $16 billion on its first day, set a recent benchmark for layer-2 token launches, against which new entrants like Extended are often compared.

Frequently Asked Questions