Binance also issued a special report to explore the "culprit" of the bull market - VC coins. It is fairly pertinent. First of all, according to the current market value, the entire market will unlock 155 billion US dollars by 2030, which is extremely horrible dumping. The main reason is the extremely high opening FDV and extremely low initial circulation. At least according to the Binance report, the reason is that VC has pushed the valuation to a very outrageous price before TGE. A few days ago, I also sent a Twitter threads to discuss this topic and coping strategies. If you are interested, you can check it out. In fact, I think it is really a very deformed false prosperity market now. On the one hand, the whole people are boycotting VC coins. On the other hand, a large number of VC friends I have contacted are complaining all day long that they can't make money. Project parties and investors are selling their coins at a discount because of locked positions (I even saw them sold at 10% off) and are trying to find someone to take over by selling coins OTC.
Let me sort out this logic again: the project side wants to raise funds - VC pushes up the valuation - TGE opens at the peak - retail investors are cut - VC sells coins at a discount on OTC. Damn, don't you think it's magical? After so much effort, a project with a valuation of tens of billions of dollars seems to have been created, but no one in the entire industry chain can really benefit from it, and everyone is busy "cutting their losses"? As the "culprit", VC coins are beaten and scolded, and everyone can't help but ask "What the hell are you trying to do?"
I have also invested in several "VC coin" projects, and some of them got very low-priced chips in the seed round. Do you ask me if it's fun? It's fun to see the book assets rising round by round, but it's useless if you can't sell them. In the end, after years of hard work, I finally unlocked them and it was good to keep 10% of the assets. So I can't help but ask, "What the hell are you trying to do?"
If VCs don't "spoil" entrepreneurs into accepting such high valuations at the beginning, if TGE is not so expensive and follows an upward curve, at most they can unlock more in advance and eventually keep 10% anyway, then what's the difference between that and starting at the peak and enduring for three years?
As a victim (secondary scalping) and beneficiary (primary investment) of VC coins, I have been thinking about this problem recently. But gradually, I found that at least for now, this is a dead end. The reason for the dead end is:
1. The prosperity of Web3 capital market development is greatly mismatched with the scarcity of high-quality projects
2. The prosperity of Web3 capital market development is greatly mismatched with its real value creation
First of all, I tweeted the day before yesterday that more than 1 million tokens were issued in just two months. Because of the extremely low asset issuance threshold of Web3, the threshold for issuing tokens for projects is too low, and most of them will return to zero. In the short term, due to the economic downturn in traditional industries + the huge "wealth-making effect" and exit speed of Web3, a lot of money has poured in. There is a lot of money and many projects, but there are very few good projects, so all the money will be concentrated in individual projects to compete for shares at high prices, thus rising the boats. We can see that the typical portraits of those who can really get tens of millions of US dollars in this round of super financing are executives of large companies + professors of famous universities, and with the support of top VCs, it is precisely such a king-level project that "must" be listed on the exchange, which eventually formed such a situation, and many "naive" entrepreneurs who have just entered Web3 to make money are deceived by appearances. After reading too much financing news, they really think that entrepreneurship in the crypto is that 3 programmers can easily raise 30 million by doing 3 months of demos. Good projects are estimated so high that a lot of bad projects follow suit.
Let’s talk about the second point. No one mentioned Mass Adoption this round, and value coins have become a “funny word”. Oh? Mr. Kong Yiji, you are here to invest in value again? Blockchain, as a revolutionary technology, has always been expected to change the old world. In the last bull market, everyone expected a world where everything can be assetized. In the last bull market, everyone expected a world where fair, reliable, and unalterable property rights can be confirmed. In this bull market, what is your expectation for the new world? What I see is a world where everyone wants to launch their own chain but can’t explain why they must do so. The lack of innovation and external value has created a world where PVP is forced to empower narratives and compete to see who can run faster. Once there is no positive value, the competition starts again to see who can run faster. Even if a team really wants to do things seriously, they will only think about starting over and doing new projects when they encounter an irreversible drop in the price of the currency. Anyway, the threshold for issuing coins and listing on the exchange is not that high. In the traditional world, Apple, Google, and Amazon will cherish their hard-earned listing opportunities, and they have no confidence that they can do several projects on Nasdaq in a row. Therefore, even if they have experienced the darkest moments of the downturn, they have persisted and have gone through decades of development. Finally, they have made businesses that truly changed the world and their achievements are reflected in their stock prices.
In the end, many factors have led to this embarrassing deadlock. How can it be solved? Who can solve it? No one knows. It seems that VCs are the culprits of the bull market where no one is willing to take over, but VCs are just members of this deadlock, just like me and you.
