The reason a token’s utility is announced before it exists

A gaming protocol announced that its token would be required to access a virtual marketplace launching “in Q3.” The token tripled in the two weeks following the announcement. When Q3 arrived, the marketplace was delayed indefinitely. The price corrected, but by then the team had sold tokens at the inflated valuation. The utility existed only as a press release.

What everyone sees

Buyers purchase the announcement, not the product. They model future demand based on the assumption that the announced utility will materialise on schedule. The speculative premium feels justified because the buyer is “getting in early.” The risk of non-delivery is discounted because the narrative is compelling and the community is excited.

What is actually happening

Li and Mann showed that token utility announcements function as forward-looking demand signals that allow the project to extract value from expectations. The token price reflects discounted future utility, but the discount rate used by speculative markets is far too low — it does not adequately price in execution risk, delay, or outright non-delivery. The result is a systematic overpricing of pre-utility tokens.

Why it stays hidden

The hidden mechanism is expectation monetisation. The project sells tokens at prices that embed future utility, then uses the proceeds to fund development of that utility — or not. The buyer funds the vision; the project captures the premium. If the utility never arrives, the buyer holds a token priced for a world that does not exist.