In two years, nearly 30 million tokens were produced, and cryptocurrency is a huge "token factory."

ChainCatcher Selection
2025-02-28 12:01:35
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Leave or wait for a transfer? Where should the first shot of change be aimed?

Author: flowie, ChainCatcher

Editor: TB, ChainCatcher

If you are still looking forward to altcoins, you might lose some illusions after seeing this set of data.

According to the Dune panel data created by @cgrogan, the number of types of crypto tokens has risen from over 3.4 million in 2022 to over 39 million in 2025. The crypto market created over 10.09 million and more than 18.7 million tokens in 2024 and 2023, respectively.

In stark contrast to the explosive growth of altcoins in this bull market is the decline in the number of cryptocurrency developers. Electric Capital's "Cryptocurrency Developer Report" shows that the total number of crypto developers decreased by 7% and 24% in 2024 and 2023, respectively.

The crypto market has long been an enormous "token issuance" factory, where, apart from the innovation of token issuance models and casinos, there is hardly any new paradigm innovation to be seen.

The flip side of fairness and overnight wealth is the extremely low cost of wrongdoing and a large number of ordinary users being defrauded. In the long-term PvP, all important participants, including users, have been educated to become smart short-termists.

Exit or Wait for a Turnaround

Yesterday, the cryptocurrency fear and greed index dropped to 10, the lowest level since June 2022. @ZKSgu refuted the externalities of Crypto, saying, "People inside the market can't stay anymore."

Exchanges and VCs, as the most criticized participants in this bull market, are looking for exit opportunities or being forced to exit.

The well-established crypto derivatives exchange BitMEX is seeking to sell, and informed sources told ChainCatcher that the largest crypto options exchange, Deribit, may have completed a merger agreement, with the acquisition amount possibly reaching $5 billion.

Not only exchanges, but the entire crypto field is also experiencing a wave of mergers and acquisitions. According to RootData, there have been nearly 30 M&A events in the crypto field in the first two months of 2025, averaging nearly 15 crypto mergers per month.

Many VCs are facing elimination. YettaS felt that at Consensus HK, the VC scene was filled with despair: some VCs couldn't raise the next round of funds, some had half of their team leave, some shifted to strategic investments and no longer invested independently, and some even considered issuing memes to raise funds.

Investor @26x14eth began to urge young people not to focus their most precious time on gold mining in the crypto circle, but to intern in promising AI and robotics industries when they have the opportunity. Because this is no longer the period from 2017 to 2021 when everyone could make money; the most precious wealth now is time.

But some are waiting for a turnaround. Crypto KOL @cmdefi is not so pessimistic. He feels that the current market is like 2018-2019, after the ICO bubble burst, everyone thought this market had no hope and was full of scams.

"But then came the DeFi Summer in 2020, speculative funds decreased, and the market focused more on application innovation. Stay in the game."

The Crazy "Bloodsucking" of Token Production Lines

This bull market is indeed hellishly difficult.

There is hardly any surprising crypto construction to be seen. From Trump leading the celebrity coin "harvesting" wave, to the Pi coin hype, and recently Safe being hacked, everyone seems to wake up to the absurdity and fragility of the crypto system.

The current state of the crypto ecosystem drawn by overseas KOL @sherlock has resonated with the market; apart from the flimsy crypto construction, conspiracy groups are everywhere.

In this bull market, making money has become harder.

Players who have experienced the last bull market may be particularly pained. Binance and other wealth-making legends from the last bull market have become dumping grounds for project teams' shitcoins, and the so-called alpha is now at its peak. Presto Research reported that all tokens listed on Binance in the first month of 2025 have dropped over 70%.

If you are holding beta diamond hands among the top 20 by market cap, you are no longer rewarded. From July 2024 to now, the top 20 tokens by market cap have generally seen declines of over 60%. Meanwhile, those looking to profit lament that no matter how they upgrade, they still can't escape being counter-harvested.

The seemingly fair on-chain PvP is a mess.

As of February 26, the Pump.fun platform has issued over 8.1 million tokens, with nearly 32 meme coins having a market cap exceeding $100 million, and only 154 with a market cap over $10 million. After experiencing scandals like Libra and other celebrity coins, on-chain PvP is also coming to an end.

Without actual crypto construction, most people can't make money; where is all the money going?

Conflux co-founder Yuanjie may have revealed the truth: apart from a very few lucky smart ones, the vast majority have flowed to the various stakeholders of "token production lines."

Yuanjie shared on Twitter that "'token factories' include not only VCs, serial entrepreneurs, market makers, OL agencies, studios, large holders, and exchanges, but a complete production line that greedily sucks the blood of this industry and the retail investors."

In the crypto market, token creation and selling is the biggest business model.

In Yuanjie's view, under the "token factory" model, the wealth creation process for project teams mainly focuses on two core aspects: chip distribution and listing. The token production line model is:

  1. Find founders backed by core circles (like Vitalik, A16Z, Binance, etc.) or influential meme leaders to acquire low-priced chips.
  2. Fabricate a beautiful narrative and use artificial data (TVL, on-chain data, node scale, etc.).
  3. Bind interests with KOL groups to complete Twitter shilling.
  4. Target core decision-makers influencing listings to make the final push.
  5. After listing, start dumping through market makers and repeat the above steps to concoct the next project.

An investor in both Web2 and Web3 also told ChainCatcher that because there is no R&D investment and the team doesn't need to support many people, as long as they complete the listing and harvesting, they won't die. "The market elimination mechanism has completely failed, and the number of garbage projects and tokens is continuously increasing."

But when ordinary users are no longer easily deceived by the "narrative" tricks conspired by project teams and VCs, a more brutal meme token production model has emerged. The methodology is almost identical, just without VCs involved.

The seemingly fair token issuance has extremely low costs for wrongdoing behind it. Primitive Crypto investment partner @YettaSing believes that the meme model is essentially a darker on-chain world than the VC model. Due to the lack of product and technical support, "absolute fairness" is often just a facade. The scandals of celebrity coins like Libra have unveiled the last piece of the meme's cover.

Where Should the First Shot of Reform Be Aimed?

The wealth effect is failing everywhere, and the industry is beginning to collectively reflect and hold accountable.

Recent public opinion has once again targeted the harvesting studios. Crypto KOL @mscryptojiayi believes that the rise of altcoins can be traced back to the moment when the "bribery system" became prevalent, and the first shot of industry reform should be aimed at the harvesting studios.

In her view, studios collude with project teams to create a "false prosperity" in the industry, which not only dilutes ordinary users' expected returns but also weakens users' long-term loyalty to projects, leading communities to degrade from value communities to interest transaction markets, while also laying mines for secondary market dumping.

She criticized that many studios, lacking bottom lines, conspire with fraudulent projects to implement shameless behaviors like building mouse warehouses and deceiving exchanges and users.

However, the KOL in the airdrop space, Ice Frog @Ice_Frog666666, refuted this. He believes that "false prosperity" is a result of the industry's distorted development, not the cause. Studios are not the biggest vested interests and rule-makers; if the knife does not cut towards the biggest vested interests or the rule-makers, reform is destined to be ineffective.

Apart from harvesting studios, this bull market has also seen project teams colluding with VCs and CEXs, which have been repeatedly attacked.

During the Hong Kong Consensus Conference, a Crypto VC even criticized the chaotic phenomenon of junk coins flying around, saying, "90% of VCs should close their doors."

The rise of VC coins also stems from the fact that there have been too many crypto scams after ICOs, and projects endorsed by VCs gradually gained recognition from retail investors.

However, the leading retail investors have lost trust. Retail investors believe that VCs can acquire chips at a lower cost and have information advantages, colluding with project teams to dump tokens and harvest users.

In this bull market, VC coins are generally overvalued with low liquidity, causing dumping right after listing, which is also a source of dissatisfaction among community users.

He Yi also bluntly stated in last year's AMA response to the listing controversy that "some VCs are indeed the core reason for the inflated prices."

The ones who get hurt are always ordinary retail investors.

As the most powerful link in wealth creation, exchanges are naturally also seen by the market as being hard to absolve of blame.

Mainstream exchanges like Binance and Coinbase have frequently been attacked by listing controversies in the past year. The exorbitant listing fees of CEXs have been seen by Moonrock Capital CEO Simon as the biggest reason for project teams' inability to bear the burden and the bleeding of market liquidity.

Although He Yi later denied the exorbitant "listing fees," the listing mechanisms of CEXs and the insider trading of "girlfriend groups" have always been questioned as one of the culprits for the harvesting and bloodsucking of junk projects.

Although He Yi has repeatedly stated that Binance has a transparent and complex listing process, the recent meme TST on the BNB chain was quickly listed and immediately dumped, leading even Zhao Changpeng to begin questioning Binance's listing issues.

Not only exchanges and VCs, but almost any beneficiary in the "token factory" can be "revolutionized." Crypto KOL @CyberPhilos believes that the three major pests in the Crypto world, besides CEXs, are KOL agencies and market makers.

A common viewpoint is that the important participants in this bull market have become too path-dependent, lacking sufficient native innovation. Without new external liquidity entering, everything has failed. But is this a result or a cause? Why can every party in the chain become a "pest"?

Overseas KOL Murtaza reflected, "Wealth came long before practicality, not just a small mistake that will resolve itself over time. This actually poses a fatal threat to the potential of technology."

Murtaza mentioned that the global cryptocurrency industry has a market value exceeding $2 trillion. Typically, industries of this scale form only after developing something useful to society.

Cypher Capital co-founder Bill and Nothing Research partner @0x_Todd share similar views in reflecting on the dilemmas of VCs and exchanges.

Bill stated that Web3 venture capital and Web2 venture capital follow completely different logics; the former emphasizes "early fame is key," and the model of quickly creating wealth drives founders to chase trends, focus on marketing, and rush to list on exchanges.

In Bill's view, Web3 actually needs more "patient capital"—venture capital that adopts Web2-style methods and supports founders in building long-term value in major markets, allowing teams to focus on product development rather than rushing to cash out.

The listing dilemma of CEXs may also stem from project teams cashing out too early. @0x_Todd believes that compared to traditional Web2 market IPOs, the problem with crypto protocols is that they enjoy the benefits of traditional listings: investors exit/incentivize employees without bearing any obligations of traditional listings.

The lack of crypto regulation is also a key issue. @0x_Todd stated that "bribery, fraud, wash trading, and deception" are all tactics that can be employed because there are no penalties.

Currently, the panic sentiment in crypto has reached an extreme point. Although everyone is holding each other accountable and reflecting, they are collectively trapped. Whether the industry can truly "cut bones to heal wounds" and usher in a clearing moment remains unknown.

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.
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