# Liquidity Provisioning at Token Launch (TGE) ### Optimal Float-to-FDV Ratios There's no single "optimal" float-to-FDV ratio in crypto, as it depends on the project's goals and market dynamics. However, a low float (small percentage of tokens initially circulating) paired with a high FDV (fully diluted valuation) can strongly influence initial market perception and price dynamics. ### Low Float, High FDV * Pros: Can create a strong initial perception of value due to limited supply, potentially driving the token price higher. * Cons: Risk of significant selling pressure as additional tokens unlock, potentially leading to price drops and volatility. * Example: Tokens are typically considered low-float if their market cap-to-FDV ratio is below 0.5, indicating most of their supply is yet to be unlocked. ### High Float, Low FDV * Pros: Can help stabilize or lower token price due to excess supply availability, reducing volatility. * Cons: Large immediate token supply may exert downward price pressure, making it difficult for price appreciation. ### Factors to Consider * Vesting Periods: Tokens locked up for extended periods can mitigate selling pressure. * Demand: Strong market demand can mitigate downward price pressures from high initial floats. * Tokenomics Design: Effective distribution and utility planning significantly influence long-term token sustainability. ### Debates and Concerns * Fair Token Distribution: Critics argue low-float, high-FDV models limit upside for public investors post-TGE, favoring private investors and VCs. * Long-term Sustainability: Continuous token unlocks raise concerns regarding long-term market stability and price sustainability. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://playbook.tokenise.tech/module-4-liquidity-management-and-market-sustainability/liquidity-provisioning-at-token-launch-tge.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.