Return to Growth Drivers: How Can VC Coins Escape the Narrative Trap?

The essence of the "VC Coin Collapse" is the excessive investment and irrational valuations in the primary market during this cycle, allowing VCs and projects that should have been eliminated to survive, raise funds, and appear in the secondary market with unreasonable valuations, as shown in Figure 1; this is not just a crisis for VC coins, but the entire cryptocurrency market is facing a crowding of funds, as depicted in Figure 2.

In the absence of external cash inflows, the degree of internal competition within the crypto market is extremely rising, forming a pyramid-like class structure, as illustrated in Figure 3. The profits of each level come from the exploitation of the levels below them, draining liquidity from the market. This process further exacerbates distrust among the lower levels, leading to increasing internal competition. Moreover, beyond VC, there are many higher tiers within the pyramid.

In an era of intense internal competition, the mortality rate of projects and tokens will significantly increase. The top-down "technological determinism," "background determinism," and "narrativism" will transform more from sufficient conditions to necessary conditions. What the market believes in is only real growth: real user growth, real revenue growth, and real adoption growth.

Viewpoint excerpted from: @Loki_Zeng @BeWaterOfficial