The Arrival of the Intense Competition in the Crypto Market: Returning to Value Driven by Rise

The current crypto market is facing an unprecedented era of internal competition. This is not just a problem of so-called "VC coins", but a challenge for the entire encryption ecosystem. Market liquidity is lacking, project valuations are severely disconnected from actual value, leading to a series of chain reactions.

Recent market performance shows that not only VC-backed tokens, but also various assets including fully circulated altcoins, Meme coins, and even ETH are experiencing a continuous decline trend. This reflects a more macro issue - the traditional "four-year bull market" cycle model may have failed. Since the second quarter of 2023, the market has been in an unusually low liquidity state.

The deep-seated reason for the current situation is the excessive investment and irrational valuations during the last bull market. A large number of projects and investment institutions that should have been eliminated managed to survive and appeared in the secondary market with unreasonable valuations. In the absence of external cash inflows, the market formed a pyramid-like class structure, with profits at each level derived from the exploitation of the lower tier. This internal competition continues to intensify, causing the entire ecosystem to fall into a vicious cycle.

In such a large environment, the elimination rate of projects and tokens will significantly increase. The so-called "technological determinism", "background determinism", and "narrativism" in the past are no longer sufficient to support the long-term development of projects. What the market truly believes in is real rise - the rise in the number of users, the rise in revenue, and the increase in adoption.

For the project team, there are several crucial points:

1. Value organic rise. The importance of marketing is no less than that of technology development; an excellent CMO should be able to bring substantial growth to the project.

2. Make reasonable use of KOL resources. Establish direct communication channels with influential KOLs instead of simply relying on middlemen or wholesale promotions.

3. Take protocol revenue as the primary rise indicator. A sustainable business model and stable income sources are the foundation for the long-term development of the project.

4. Build a real economic model. This includes ensuring that the circulation of tokens matches business development, viewing incentives as investment behavior rather than consumption behavior, and addressing the issue of class solidification in chip structure, among others.

In this challenging time, only those projects that can demonstrate real value and continuous rise will stand out in the fierce competition. For the entire industry, this may be a painful but necessary purification process that will ultimately drive the crypto ecosystem towards a healthier and more sustainable direction.