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What happened to the crypto industry?

BlockBeatsBlockBeats2024/08/07 10:12
By:BlockBeats

This KOL's comments on this cycle fully express the helplessness and sadness of investors

Original author: Ryanqyz, crypto KOL


Editor's note: Since 2024, the market has experienced several ups and downs. Retail investors lost money, VCs cried poor, and many project parties ran away. The violent bull market that everyone expected did not arrive as expected. The Bitcoin ETF has been up and down since its approval, and the altcoins are even more difficult to describe. Recently, Ethereum core developers have raised questions, have they entered the wrong industry? What happened to blockchain? Crypto KOL Ryanqyz did a comprehensive review of VCs, project parties, new and old projects, exchanges, etc. in this cycle on X, trying to find the reasons for the current situation. BlockBeats reprinted the full text as follows:


What happened in the blockchain industry?


About VC:


- VCs with a normal rhythm in the last cycle have made money. These VCs have expanded the size of their funds by 3-10 times in this cycle to raise funds again, resulting in too much money on hand. However, there are not enough good projects, but they must be spent, so projects with a little bit of appeal will increase rounds of financing to raise valuations and get money they don't need. Old projects that were dead three years ago can also come out and get a new round of VC financing. This has also greatly increased the VC cost of good projects and the psychological expectations of coin holders.


- VCs are not stupid, and project owners are not stupid either. It has essentially become a game of cutting LPs.


- Other projects cannot issue coins after investment, and they look at each other in confusion during meetings. It's not easy to have a good project issue coins, so hurry up and focus on PR. After 6 or 12 months, you can only unlock and sell the coins. If you haven't unlocked them before, you have to find a way to sell the coins/hedge first.


- In short, VCs don’t make money, and LPs suffer the most.


About new projects:


- Because mature founders spend the same amount of time on small and large projects, and sell coins at the same price, they only do large projects.


- Large projects = high valuations = infra


- Infras appear in large numbers, but there are no applications/real income on them, so they can only subsidize/inflate their own volume.


- Where does their own money come from? VCs come from there, and it’s free anyway.


- Because they have understood the Playbook for listing and opening the market, and have a clear goal of opening and selling coins, they will open the market with a high valuation, and then sell the least coins to get the most money, and then the market buying will dry up, but they still have to sell coins. It is impossible not to sell coins. After the first wave of buying on the opening of a coin ends, it can only fall, and the end time is generally 1-3 days, and basically it can’t last more than three days. After that, create fluctuations and continue to sell coins. If the market is good, occasionally appear on the gain list, and then continue to sell coins.


- In short, the first principle of doing a project is to sell coins; a very small number of projects create value (or rely on cheating) through protocol income. Some projects that inflate volume and make money are also fake user projects. Once they are online, they are equal to zero, and there is no trading volume. For such projects, the market value is meaningless.


About old projects:


- Dead projects use the relatively high-quality Captable invested three years ago to raise funds again (in fact, they have no contact with those funds). Most of them use KOL Round, and a few look for funds to take over. In order to get on BN, continue to raise funds to inflate data, but there are still no real users and no real use cases. In fact, it is impossible to get on BN, so there are two ways, bribe other exchanges/DEX to list coins.


- DEX listing = zero, bribing the exchange = zero (the bribe money must be earned by selling the coins)


- In short, this type of project can only go to zero, because they are unlikely to do it well


About the head exchange:


- The service provided by the exchange to the project party is equivalent to the pool on the chain. Adding a pool to a coin is definitely a good thing for the project. So the project must give money to the exchange, which is understandable and in line with business common sense.


- The exchange has objects to please, that is, the big players. Projects that meet the interests of big players need to be listed, so LRT must list projects that meet its own interests, so those who have invested, those with users, new things, and those that can compete with other exchanges can be listed.


- Because liquidity is king, listing on the exchange has become the most important part of doing a project. The exchange plays an important role in user education and liquidity provision, and should obtain an important position and matching profits. Then he will quietly accept your principal:)


In summary, doing a project has become creating an illusory thing. There is no need to make things. As long as you can sell the coins, it will be fine, because the essence is to create a mob and then sell the coins.


In this case, there is no difference between VC coins and meme coins.


About ETH:


- The big players changed their thinking and became POS. Anyway, it is not POW, nor is it a coin speculation idea, nor is it a deposit and purchase idea, but a freeloading idea.


- The big players do not participate in the real construction, which refers to the construction that has a direct positive impact on the price of ETH, including but not limited to making memecoins, pulling high-quality memecoins, and creating a unique ETH cult culture. In short, they do nothing.


- The only two reasons to buy ETH in this cycle are re-staking and ETF, but this has nothing to do with retail investors, so ETH essentially has no good and strong reasons to buy that can be explained at once.


- ETH still has the most developers, the most nodes, and the most ecological projects. It is still the most robust blockchain. However, these projects on ETH have ulterior motives and want to sell their own air coins to retail investors, so that they can only make money for themselves. In short, it is not easy for retail investors to make money on ETH.


About SOL:


- Large investors stick together, and they have a big picture. They understand what retail investors are thinking.


- The scale of large investors is 400,000-2mil SOL. They spend 1w SOL to make a so-called cult memecoin or find someone they know to make a memecoin. It is so easy. They stick together to pull the meme, make a lot of small pools of memecoin, and send them to 100-500mil. Retail investors are dazzled by so many memecoins and are crazy about FOMO. KOLs earn attention and transfer wealth by shouting orders, and these coins really rise


- KOLs form a gradient and shouting range, with top-tier ones such as Hsaka and Ansem in one tier, some with 100k followers in one tier, and others in another tier (these are mainly KOCs), shouting coins of different market value ranges, about 500mil+, 100-500mil, 10-100mil, and lottery players below 10mil. This increases the vitality of the SOL ecosystem and allows retail investors to carry their SOL


- Because retail investors all hold SOL, the SOL maxi army is naturally formed, and the SOL flip ETH sentiment is rampant among retail investors. These people get the pleasure of memecoin, forget the risk of SOL rollback, and the memecoin in their hands is essentially air.


- SOL enters the positive feedback loop stage, the main character shouts orders, retail investors continue to FOMO, continue to shout orders and continue FOMO.


- When will it end? I don’t know. It will end when everyone is disgusted with memecoin.


- In short, SOL has become the best casino in this cycle, the best casino chips, and everyone needs SOL


Judgment:


- The memecoin supercycle is established, and 20 memecoins appear in the top 100 market value coins. A large number of memecoins are between 100-300mil, mainly on SOL.


- Successful memecoin focus CEX appears


- The project continues to open with a high market value, but the opening valuation will be significantly lowered. PR drafts say that the valuation rationalization of the project party has appeared in large numbers (some project parties have already done this, and the results are good from the online point of view, the pattern is large, and they cherish their feathers).


- VCs can only look to Web2 for funding in the next round. They are very jealous of the industry, but reporting to LPs will be painful. High-quality real-use case projects that do not over-finance VCs (or even do not raise funds at all) begin to emerge, using other more decent ways to transfer benefits.


- Audit/security companies that truly create value are slowly beginning to be taken seriously, and high-quality audits have become an important part of the industry: BlockSec, Hexagate, Hypernative


- For non-meme projects, the market has returned to favoring projects with real income, real monopoly, and real use cases (I hope they will have innovative ways to link tokens and businesses)


- The next round is the real application cycle


To my readers:


- Buy BTC, put it in a cold wallet, sell some when the grandpa and grandma come, buy some when your parents scold you for being an idiot, and keep the rest, don’t tell anyone


- Find a way to get money from VC/project parties: do projects/provide services for projects


- Find a way to get money from other retail investors: provide services to retail investors


- Don’t buy VC coins, especially high-market-cap VC coins (end: can’t outperform BTC)


- Try to buy 10mil-100mil SOL memecoin and sell it at the 100-500mil stage


- Do not participate in old projects. There are reasons why they did not issue coins in the last cycle


- Verify all the information you want to know carefully after seeing it. If you cannot verify it, it is false by default


- Identify valuable content accounts and give them more interaction (<1% of accounts are still doing this)



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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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