Mechanism Capital Co-Founder Criticizes Token Lock-Up Periods

According to PANews, Andrew Kang, co-founder of Mechanism Capital, expressed his views on the X platform regarding token economic models. Kang stated that the best token economic model for a project does not require lock-up restrictions for investors and should aim to circulate as many tokens as possible from day one, excluding team and treasury shares. He criticized the standard practice of a one-year lock-up period followed by a three to four-year release period, attributing it to a misunderstanding of capital markets and lazy replication of previous projects. Kang argued that longer lock-up restrictions have minimal impact on investor commitment post-Token Generation Event (TGE). He emphasized that good investors will support a project regardless of whether the tokens are locked or unlocked. Kang called for a change in industry standards, suggesting that the current practices do not align with the realities of investor behavior and project support.