What happened to the cryptocurrency industry?

What has happened in the blockchain industry?

About VCs:

VCs that had a normal rhythm in the last cycle made money. These VCs have expanded their fund sizes by 3-10 times in this cycle to raise more funds, resulting in too much money on hand. However, there are not enough good projects, but they must spend the money, so any project with some appeal will increase rounds of financing to raise valuations, obtaining money they do not need. Old projects that had already died three years ago can still bounce back and secure a new round of VC financing. This has significantly increased the VC costs for good projects and the psychological expectations of coin holders.
VCs are not foolish, and project teams are not foolish; it has essentially turned into a game of cutting LPs.
Other projects that have finished funding cannot issue tokens, looking at each other awkwardly during meetings. When a good project finally issues tokens, they rush to PR it, but after 6 or 12 months, they can only unlock and sell tokens, and even before unlocking, they must find ways to sell or hedge.
In summary, VCs are not making money, and LPs are the worst off.

About New Projects:

Since mature founders invest the same amount of time in small or large projects, and selling tokens is the same, they will only pursue large projects.
Large projects = High valuation = infra
Infra clusters appear, but there are no applications/real income on top, so they can only subsidize or inflate numbers themselves.
Where does the money come from? From VCs, since it’s free anyway.
Because they have understood the token listing playbook and have clear goals to sell tokens upon listing, they will list at high valuations, sell the least amount of tokens, and exchange for the most money, then the market buy orders dry up, but they still need to sell tokens; not selling tokens is impossible. After the first wave of buy orders ends, a token can only drop, and this usually lasts 1-3 days, rarely lasting more than three days. After that, they create volatility and continue to sell tokens. If the market is good, they occasionally make it to the top of the gainers list and continue selling tokens.
In summary, the first principle of doing projects is to sell tokens; only a very small number of projects create value (or rely on deceit) through protocol income. Some volume-inflating projects and scams are all fake user projects, launching equals zero, with no trading volume; for such projects, market capitalization is meaningless.

About Old Projects:

Dead projects use relatively high-quality cap tables from three years ago to refinance (actually, they have no contact with those funds anymore), mostly using KOL rounds, with a few finding funds to take over. To get listed on BN, they continue to raise funds to inflate data, but still have no real users or use cases. In fact, they can't even get listed on BN, so there are two paths: bribing other exchanges/DEXs to get listed.
DEX listing = zero, bribing exchanges = zero (the bribe money has to be earned back by selling tokens)
In summary, this type of project can only go to zero because they are unlikely to do it properly.

About Leading Exchanges:

The services provided by exchanges to project teams are equivalent to pools on-chain. Adding a pool for a token is definitely a good thing for the project. Therefore, projects must pay exchanges, which is beyond reproach and aligns with common business sense.
Exchanges have entities they need to please, namely large holders. Projects that align with the interests of large holders need to be listed, so LRT must list projects that align with their interests, projects that have users must be listed, new things must be listed, and those that can compete with other exchanges must be listed.
Because liquidity is king, listing on exchanges has become the most important part of doing projects. Exchanges play a crucial role in user education and liquidity provision and should receive significant status and matching profits. Your principal is quietly accepted by them :)

In summary, doing projects has turned into creating an illusion; there is no need to create anything, just sell tokens, because the essence is to manufacture a mob and then sell tokens.

Since this is the case, VC tokens and meme tokens are no different.

About ETH:

Large holders have changed their mindset, shifting to POS; it’s neither POW nor a speculative mindset, and certainly not a deposit-and-buy mindset, but rather a free-riding mindset.
Large holders do not participate in real construction, which directly positively impacts the price of ETH, including but not limited to creating memecoins, pumping quality memecoins, and creating unique ETH cult cultures, etc. In short, they are inactive.
The only two reasons to buy ETH in this cycle are re-staking and the ETF, but this has nothing to do with retail investors, so ETH essentially lacks strong, clear buying reasons.
ETH still has the most developers, the most nodes, and the most ecological projects. It remains the most robust blockchain. However, the projects on ETH have ulterior motives, wanting to sell their air tokens to retail investors, only allowing themselves to profit. In summary, retail investors find it hard to make money on ETH.

About SOL:

Large holders band together, have a broader perspective, and understand what retail investors are thinking.
The scale of large holders is 40k - 2 million SOL; they can easily spend 10k SOL to create a so-called cult meme coin or collaborate with acquaintances to make a meme coin. They band together to pump memes, creating a plethora of small pool meme coins, pushing them to 100-500 million. Retail investors are dazzled by so many meme coins and go into a frenzy of FOMO. KOLs earn attention by calling out these coins, completing the wealth transfer, and these coins actually rise.
KOLs form gradients and call-out ranges, with top-tier influencers like Hsaka and Ansem in one tier, some with 100k followers in another, and others in another tier (mainly KOCs), each calling out coins in different market cap ranges, roughly 500 million+, 100-500 million, 10-100 million, and lottery players below 10 million. This increases the vitality of the SOL ecosystem and allows retail investors to lift their SOL.
Since retail investors hold SOL, a SOL maxi legion naturally forms, and the sentiment of SOL flipping ETH is rampant among retail investors. These individuals experience the thrill of memecoins, forgetting the rollback risks of SOL and that the memecoins in their hands are essentially air.
SOL enters a positive feedback loop stage, with main characters calling out, retail investors continuing to FOMO, and continuing to call out and FOMO.
When will it end? I don't know. It will probably end when everyone becomes disgusted with memecoins.
In summary, SOL has become the best casino of this cycle, the best casino chips, and everyone needs SOL.

Judgment:

The memecoin supercycle is established, with 20 memecoins appearing among the top 100 market cap coins, and a large number of memecoins in the 100-300 million range, mainly on SOL.
Successful memecoins focus on CEX.
Projects continue to open at high market caps, but the opening valuations will be significantly adjusted downwards, with PR drafts stating that project valuations are rationalized in large numbers (some project teams have already done this, and the results look good online, with a broad perspective and valuing their reputation).
In the next round, VCs can only seek funding from Web2; they are very envious of the industry but find it painful to report to LPs. High-quality, real-use case projects that do not excessively rely on VC funding (or even do not fund at all) are beginning to emerge, using other more decent ways to transfer benefits.
Audit/security companies that truly create value are slowly starting to gain attention, with quality audits becoming an important part of the industry: BlockSec, Hexagate, Hypernative.
For non-meme projects, the market is returning to favor projects with real income, real monopolies, and real use cases (hoping they will have innovative ways to link tokens with business).
The next round is a real application cycle.

To My Readers:

Buy BTC, put it in a cold wallet, sell some when the old folks come, buy some when your parents call you an idiot, and hold the rest without telling anyone.
Find ways to get money from VCs/project teams: do projects/provide services to projects.
Find ways to get money from other retail investors: provide services to retail investors.
Do not buy VC tokens, especially high market cap VC tokens (outcome: will not outperform BTC).
Try to buy 10 million - 100 million SOL memecoins and sell them during their 100-500 million phase.
Do not participate in old projects; there are reasons why they did not issue tokens in the last cycle.
Verify all the information you want to understand seriously; if it cannot be verified, assume it is false.
Identify valuable content accounts and interact with them more (less than 1% of accounts are still doing this).

ChainCatcher reminds readers to view blockchain rationally, enhance risk awareness, and be cautious of various virtual token issuances and speculations. All content on this site is solely market information or related party opinions, and does not constitute any form of investment advice. If you find sensitive information in the content, please click "Report", and we will handle it promptly.