The Era of Intense Competition in the Crypto Market: From the VC Coin Crisis to Value Driven by Rise

Market difficulties are not limited to VC coin

The current difficulties faced by the crypto market are not limited to VC coin, but the entire market is trapped in a low liquidity dilemma. The rise in Bitcoin prices to new highs has not driven altcoins to surge, a phenomenon that differs from previous cycles, indicating the overall weakness of the market.

The reasons for this phenomenon include:

1. The marginal diminishing effect of Bitcoin halving
2. The overlap of the Bitcoin ETF listing and the halving cycle creates an illusion of a bull market.
3. Global Economic Cycle Changes

The Pyramid Structure in the Era of Intense Competition

The crypto market is forming a pyramid-like class structure, where the profits at each level come from the exploitation of the lower levels. This internal competition structure is intensifying and leading to a continuous loss of market liquidity.

In this structure, VCs are relatively disadvantaged. According to the difficulty of obtaining low-cost, highly liquid tokens, VCs rank only 6th. Those who can acquire tokens at a lower cost are truly at the top of the pyramid.

Return to Real Growth

In the current environment, for projects to survive, they must return to real growth, including:

1. Organic user growth
2. Actual income rise
3. Adoption Rate Increase

The narratives and backgrounds that were relied upon in the past are no longer sufficient to support project development.

Value the market and rise

• The importance of the market and rise is no less than that of technology; an excellent CMO's salary should not be lower than that of a CTO.
• The rise should focus on authenticity, rather than just simple data growth.
• The rise strategy should be highly integrated with the product strategy.

New Ideas for KOL Cooperation

• Founders should communicate one-on-one with important KOLs directly.
• Treat KOLs as important clients and resources, rather than just simple promotional tools.
• High-quality KOLs can provide strategic, resource, and other multifaceted value.

The core indicator is protocol revenue.

• Establishing a sustainable source of income is key.
• Ensure that the agreement has the potential for a surplus.
• Build a reasonable governance mechanism and economic model

Improve economic model design

• The circulation of tokens must match business development
• Extend the token unlocking period and increase the initial circulation rate
• Treat incentives as investments rather than consumption
• Solve the problem of class solidification in chip structure

Only by truly focusing on organic growth, sustainable income, and a reasonable economic model can projects survive and develop in the current environment of intense competition. The market will eventually return to rationality, guided by real value.