Nobody is going to work for Crypto startups now that the whole sector has imploded. And likely will go even lower from here. The days of profiting off ponzi scheme-esque tokens is over

most crypto assets can fall 99% from their initial trading price (like IPO price) before employees, founders and investors are at anything resembling a loss.

99.99% from all time highs

thats true for newly or to be launched crypto assets, and for existing established cryptos the fully diluted value (non circulating supply that company holds) is often many times the supply that “marketcap” sites show, and this is paid to employees and slowly increases the circulating supply

all while the cash compensation and bonus structure is now similar to FAANG

so I think you might be right that there are potential employees that don't understand that and can only relate to their or their friend’s attempts at day trading

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)