Here is the English translation of the text, with the specified terms preserved:
The Rise of Crypto and Social Background
Hayes believes the success of cryptocurrencies is not accidental. Its rise is driven by three key factors: government control, revolutionary technology, and the wealth effect. As global wealth and power become increasingly concentrated, the influence of large corporations exceeds national borders, leaving most people in poverty or the middle class unable to share the fruits of economic growth. The decentralized nature of cryptocurrencies provides a means of resistance to this phenomenon and allows ordinary users to participate in a new round of global economic growth.
The Rift between VCs and Retail Investors
Hayes points out that many tokens in the current cryptocurrency market are VC-driven, with fully diluted valuations (FDV) and initial circulating supplies so high that they are difficult for retail investors to bear. For example, many new tokens issued in 2024 have underperformed mainstream cryptocurrencies (such as Bitcoin and Ethereum) by about 50%.
The Rise of Memecoins and Reverse Thinking
Faced with retail investors' indifference to VC-backed coins, Hayes proposes the rise of Memecoins as a reverse capital operation model. Memecoins, created based on internet culture and memes, often lack intrinsic value. However, through rapid dissemination and attracting speculators' attention, Memecoins can quickly gain high market attention. For ordinary investors, the most appealing aspect of Memecoins is the ability to enter the market at a lower cost and pursue rapid wealth growth in the short term.
The Standard of Capital Formation
Hayes presents a simple framework to understand the value sources of different types of tokens. The value of Memecoins comes from the propagation power of their meme content, while VC-backed tokens rely more on the founders' backgrounds and the stereotypical image of "successful founders". For retail investors, the most attractive are the tokens that can quickly generate market effects, regardless of whether they have actual products or services.
The Demands of Retail Investors and the Future Path
Although most initial coin offerings (ICOs) will ultimately fail, a few projects can realize their value through strong Memetic effects and technical potential. Hayes believes the future cryptocurrency market should focus more on how to involve retail investors and allow them to truly benefit. He suggests that founders should return to the fundamental purpose of their projects - creating products that meet user needs, rather than relying solely on venture capital funding.
Hayes also emphasized that with the support of decentralized exchanges (DEX) and new token issuance methods, investors no longer need to rely on traditional venture capital institutions or intermediaries, but can directly participate and price according to market response. This model not only allows more teams from different backgrounds to have opportunities, but also allows investors who are willing to take risks to get high returns.
Finally, Arthur Hayes pointed out:
The retail investors in the current cryptocurrency market are indifferent to venture capital-backed tokens, reflecting a bias in the value proposition of the market, and calls on project parties to refocus on user needs rather than catering to venture capital.
