The launch of Berachain’s BERA token has reignited debates over venture capital-backed (VC) coins, with critics pointing to its low circulating supply and high fully diluted valuation (FDV) as key concerns.
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The Controversy
After an initial 71% surge, BERA plunged 63%. This raised concerns that its low float—just 15% of total supply—created artificial scarcity before a sell-off.
Traders argue the tokenomics favor early investors while exposing retail participants to volatility. This is similar to past issues face by other projects like Starknet.
With a fully dilluted valuation of 2.7 billion, critics say excessive valuations driven by VC funding inflate prices before launch, benefiting insiders at the expense of regular investors.
Market reaction:
Investors like Moonrock Capital’s CEO Simon Dedic claim high-FDV tokenomics are unsustainable.
Dedic warned that they primarily enrich VCs, market makers, and centralized exchanges.
Some experts advocate for community rounds to allow early supporters to enter at fairer valuations rather than dealing with inflated FDVs post-launch.
Hack VC’s Ed Roman, an investor in Berachain, argues FDV is set by the market, not the project itself, and points to BERA’s 21% float being higher than many competitors.
In a highly charged post on X, BitMEX founder Arthur Hayes recommended founders to work with market makers and exchanges so that their tokens will open at lower prices.
