A coin with a market cap of $1B that falls 99% is worth $10m. I'd love to see the startup with more than a few employees where that leaves anybody but the founders with anything.
And usually these lesser known tokens are thinly traded and the volume doesn't support actually cashing out large trades at market price
But yeah, if you trick enough ignorant retail investors to bid up your token, you can siphon their money to your employees. Certainly.
Death spirals happen. Its a risk that lockups expiring create ongoing dilution not met by increased demand. Thats not controversial or exclusive to crypto assets, the early liquidity is currently exclusive and competitive.
The liquidity pool technology fixes the liquidity issue and many company’s investors park additional capital in the liquidity pools. Sometimes even their unvested tokens sit in them or the generated liquidity pool shares is put in the vesting timelock smart contract, guaranteeing liquidity for others (which often increases confidence for holding, knowing that people can get out at any time)
And usually these lesser known tokens are thinly traded and the volume doesn't support actually cashing out large trades at market price
But yeah, if you trick enough ignorant retail investors to bid up your token, you can siphon their money to your employees. Certainly.