Author: LUCIDA & FALCON
Guests
Zheng @ZnQ_626
LUCIDA Founder
2019 Bgain Digital Asset Trading League Season 1 Mixed Strategy Group Champion;
2020 TokenInsight Global Asset Quantitative Competition, Compound Strategy Group: April runner-up, May champion, and season third place;
2021 TokenInsight x KuCoin Global Asset Quantitative Competition, third place in the compound strategy group season;
Jims @jimsyoung_
Youbi Capital Investor
Invest in both traditional finance and Crypto
Focus on Web3 application layer track
Rui @yeruizhang
KOL
Entered the circle in 2017
The main business is invested in the first level, and the secondary business is invested in the second level
Mason @ma_s_on_
Crypto/Tech FoF Investors
5 years of FoF experience in blockchain, Internet, and technology
Researched hundreds of VC, secondary, quantitative and other funds
Unique perspectives on cycles, asset classes, and fund strategies
Zheng @ZnQ_626
The performance of VC Tokens has generally been unsatisfactory in recent months. Today I want to talk to you about a slightly sensitive topic: Does VC Token still have a chance?
I know that all three of you work for relatively good investment institutions in the industry. Today, I actually treat this as a casual chat between the three of us. If you have some more distinct opinions later, they only represent yourself, not the company. I still hope that you can talk some real talk. Before we officially start, let the three of you make a brief self-introduction.
Mason @ma_s_on_
Hello everyone, my name is Mason. Over the past five years, I have focused on investments in the fields of technology, Internet, software and blockchain, and have been committed to asset allocation for clients. I hope to discuss relevant views with you today.
Rui @yeruizhang
I'm Rui. I started working in Crypto in 2017 and have been doing investment-related things. I've basically talked to all the big and small projects on the market. My first-level experience is pretty good. Then I started writing on Twitter in 2021 and have been writing for quite a while.
Jims @jimsyoung_
Hello everyone, I’m Jims. My own experience is that I first invested in overseas investment, and made overseas strategies in large companies. Later, I also invested in overseas projects, and then made primary investments in crypto funds. Basically, I have been focusing on primary investments. In this cycle, I started to be interested in the secondary market and rushed to create some memes. This is the overall situation.
Let’s start with the first question: What are the underlying reasons for the poor performance of VC Tokens in this cycle? If you can list multiple reasons, how do you rank them?
Mason @ma_s_on_
I think there are four reasons for this situation:
Mismatch between primary and secondary markets: This is a long-standing problem in the capital market. Since the participants in the primary and secondary markets are different and their funds and investment areas are limited, this structural problem cannot be solved overnight.
Characteristics of Crypto: The exit channels and rules of the Crypto market are not as mature as those of the traditional market. In the traditional market, VC exit channels are relatively clear, such as mergers and acquisitions or listing. But in Crypto, these rules are still being customized, and the terms and circulation rates can be adjusted at will. This flexibility exacerbates the differences between the primary and secondary markets.
Insufficient liquidity: The overall liquidity is currently low, and the liquidity of tokens held by VCs is insufficient, which leads to poor performance of tokens, thus creating a situation where there are more people than porridge.
Negative cycle of wealth effect: The negative cycle caused by wealth effect is also a reason for the current situation.
If we have to rank them, I think the first and second points, especially the second point, are the key issues. The industry needs to return to rationality, and the issue of custom rules remains unanswered. The situation of too many monks and too little porridge has further exacerbated this problem.
I take the stock market as an example. Factors such as the initial circulation rate, the unlocking ratio, and the profit multiples of primary market investors in the stock market are all controllable. Data from some KOLs show that the valuation of new projects this year may be several times that of three years ago. Compared with projects four years ago, the terms and rules of current projects have changed a lot, and these changes can be measured with quantitative indicators.
In the previous cycle (2020-2021), investors were more cautious and valuations were lower. However, due to the influx of a large amount of funds in this round, the overall valuation of the primary market is higher, and when exiting, they also expect to get higher returns in the secondary market.
Zheng @ZnQ_626
There is a view that the 2022 bear market is not as fierce as the previous rounds, and many projects are struggling but not completely collapsed, which may be the reason for the current high valuation of projects. Do you agree with this view? Are there other reasons?
Mason @ma_s_on_
I agree with this view, but the more direct reason is that the wealth effect of the last round attracted more investors. Supply and demand determine prices, and the inflow of funds has led to an increase in valuations. Even in the bear market of 22-23, project valuations did not drop as much as in the first three rounds.
Jims @jimsyoung_
I think poor liquidity is indeed an important problem in the current market. The liquidity problem can be alleviated during the period of large-scale money release, but in the current cycle, insufficient liquidity and scarcity of high-quality assets have become the main difficulties. For example, the mobile Internet industry once experienced a huge wave. At that time, the market environment was very conducive to investment. No matter which country you invest in, the return is good. In regions such as Africa and Southeast Asia, although investment opportunities in other fields are relatively limited, due to market size and intrinsic value, investment can still be rewarded.
The phenomenon of poor liquidity will be different in different cycles. In the past cycle, the number of assets in the market was relatively small and liquidity was relatively concentrated. Now, with the increase in asset types, liquidity has been diluted. For example, there are many emerging assets and tokens in the market now, and the price increase of these assets is small, mainly because the liquidity in the market is not concentrated on a few assets.
The high-quality assets are still there, but they behave differently. Assets like Pendle have performed significantly better than the market as a whole over the past year, which shows that there are still some assets in the market that are worth investing in. Although the market no longer has the general rise phenomenon of the past, the performance of high-quality assets is still worthy of attention. The reduction of asset production costs is also an important factor. In the past, the cost of creating a public chain was high, but now it has become easier to create Layer 2 solutions. This has increased the types of assets, but the performance of individual assets has been differentiated.
Zheng @ZnQ_626
How is your own investment performance in the secondary market this year?
Jims @jimsyoung_
This is the first time I manage my own funds. The market performance was strong from the end of last year to the beginning of this year. I increased a lot of high-risk investments and tried different strategies. However, due to the flexibility of funds, my overall performance did not exceed expectations. In particular, the results of investing a large amount of funds in Bitcoin were not as expected. The market experienced some retracements, and I adjusted my strategy and gradually turned to the timing strategy of large currencies to become more stable. Overall, the performance was average, and my learning and judgment abilities were improved.
Zheng @ZnQ_626
I would like to add that the A-share market has also experienced a similar sector rotation phenomenon. This year's sector rotation is very fast, and the performance of a sector may only last for a week or a few days. This phenomenon is actually very common in the A-share market. Although the difficulty of the market has increased, it is only the basic difficulty, not the extreme difficulty.
In the past 20 and 21 years, many investors have made money in the market, and almost all small currencies can be profitable. Even in the 16 and 17 years, investing in any ICO currency can make money. This phenomenon has led many people to have blind confidence in their ability to choose currencies. But the reality is that the current market performance is much more mediocre than in the past, but compared with the traditional market, the difficulty of choosing a currency in the currency circle is still very low.
Mason @ma_s_on_
Regarding the strategies of small and medium-sized currencies in the FOF funds I manage, the overall performance varies greatly. The performance of altcoins is often not as good as that of mainstream currencies because of their higher risks and difficulty in establishing certainty. In investment allocation, institutions usually pursue certainty more. A large position investment may get a 50% return, which is more valuable than a high multiple return on a small position. Different strategies also perform differently in the market. For example, some people focus on the swing operation of Bitcoin, some invest in a small amount of small currencies, and others focus on the top ten currencies. Overall, the current cycle has not yet ended, and the final performance needs further observation.
Rui @yeruizhang
I would like to discuss why the performance of VC coins in this cycle has not met expectations. Although many old coins have performed well since November last year, the money-making effect has weakened compared to the previous cycle. This phenomenon is affected by several factors:
First, market participants have generally become richer. In the last cycle, investors with 100K of funds were considered high net worth investors, but this year, many people's starting funds are already in the millions. As long as you dare to invest, from October last year to March this year, you can usually get good returns by grabbing a few suitable assets.
Secondly, the current currency channels in the market are mainly concentrated on platforms such as Binance. The currencies that can arouse the desire to buy are very limited, and the prices of many currencies have been fully bargained before listing on Binance. Some currencies have even undergone various airdrops and other operations before listing, and the prices have been calculated very clearly. This situation leads to high prices at the opening, and the subsequent profit effect is poor.
Third, changes in the track also affect performance. In the past, the community's FOMO psychology was very strong, such as some public chain and stablecoin projects. In 21 years, the community's support for some projects was very strong, and everyone was willing to promote the project together. However, now the community atmosphere of many projects is not as strong as before, and there is a lack of that sense of joint promotion. In addition, many new tracks have a more transparent revenue model, and investors can judge the investment value by calculating the expected return, rather than relying on the community's emotions and imagination. In this case, investors' decisions are more rational and calculated, resulting in some projects performing worse than expected.
In general, the wealth level of market participants, the centralization of coin listing channels, and changes in tracks and communities are all key factors affecting the current performance of VC coins.
Zheng @ZnQ_626
So, how are your performances in small-currency investments this year?
Rui @yeruizhang
The recent performance has been average, especially since May, when investment returns have slightly declined. But before that, the situation was pretty good. For example, if you put money into projects like Eigenlayer and Pendle, the yield is relatively high, especially in the high-yield period, the annualized return can reach more than 50% after locking in the returns. Despite this, the loss of buying altcoins is still quite serious.
Zheng @ZnQ_626
understood. In fact, I would like to add one point about the reasons for the poor performance of VC features. Some of my personal observations are that retail investors in this cycle no longer seem to believe in the story of Web3 as much as before. Looking back on 2017 and 2018, when ICOs were the hottest, many users truly believed in these projects. Even in 2020 and 2021, many people are confident in emerging projects such as NFTs. However, the trust of retail investors seems to have declined significantly during this cycle, which may also explain the poor state of the community mentioned by Rui. This is just my personal feeling, not necessarily rigorous. With this I would like to lead to the next question.
Do you still believe in Web3? If so, what is your current investment logic? Why do you still want to participate in primary market investment, especially as a VC to invest in these projects?
Mason @ma_s_on_
Indeed, we still believe in the trend of Web3. Although this round of innovation may not be as eye-catching compared to the last cycle, it does not mean that we have lost confidence in the prospects of Web3. The sentiment in the last cycle was very high, and breakthrough innovations such as Uniswap that simplified complex problems were indeed impressive. However, this round of innovation may not seem so dazzling, but there are still many projects that are solving practical problems and promoting industry progress, which are still worthy of our attention.
However, there are two issues worth noting in this cycle. The first is the uncertainty of the implementation path. We cannot be sure what the development path of Web3 or blockchain technology will be, whether there will be a situation where rapid growth will be followed by a trough, and this uncertainty may affect investment decisions.
Secondly, there are obvious differences between the narratives of Web3 in the West and the East. In the West, many investors, including some Wall Street institutions, their relatives and people around them are also actively involved in the blockchain industry, which shows that they truly believe in the potential of this field. In terms of investment, Western investors may be more concerned about how to combine blockchain technology with compliance, such as how to achieve compliant asset management (RWA) in Web3.
Overall, we remain confident in Web3, but there are some uncertainties about its development path and implementation methods, which will affect investment decisions.
Zheng @ZnQ_626
From your perspective, whether it is the projects you invest in or the primary market funds invested by FOF funds, what percentage of entrepreneurs do you think really want to change the world or promote Web3 through projects? What percentage is there to make money and tell a story in the hope of eventually achieving profitability? From the perspective of institutions, what value preferences do these two types of entrepreneurs have? For example, do you have a higher preference for the first type of entrepreneurs?
Rui @yeruizhang
Let me answer this question. First of all, this industry is already quite mature, so most entrepreneurs are not simply pursuing to change the world. They are more likely to play a key role in the existing ecosystem. For example, many projects on the DA track are actually supplementing and improving some functions in the existing ecosystem. Current projects are more about adding some innovations to the existing foundation, rather than simply "disrupting" the entire industry.
Compared with the previous cycle, the projects in this cycle are more about making some improvements on the solid industry foundation. For example, projects such as Eigenlayer actually fill the gaps in the existing system and provide better solutions. These projects are more about adding a new layer to the existing building blocks, or adding a few bricks and tiles.
As for whether the project owners in the market really intend to "cut a wave", the situation is complicated. On the one hand, many project owners do hope to achieve results by solving industry problems, not just for short-term benefits. For example, all projects listed on Binance need to be reported, and Binance has a certain review mechanism, which makes it difficult for projects that are purely for short-term profits to succeed. On the other hand, there are indeed some project owners who hope to gain benefits by "cutting leeks", but these cases are relatively rare.
Zheng @ZnQ_626
I understand. Then there is another question. For you, is the logic and necessity of a project a necessary prerequisite for investment? If a project itself is an important building block, but it does not have a good financial return in the economic model, and may not even be profitable in the short term, will you still invest? Or if you are not satisfied with its economic model and think it may not make money in the next one or two years, will you still consider investing?
Mason @ma_s_on_
This is a very good question. For us, the logic and necessity of a project are really the core part of investment decision-making. We will consider whether the project really solves a real problem and whether it can play an important role in the Web3 ecosystem. This "political correctness" or necessity is the premise for us to judge whether a project is worth investing in.
However, financial returns and economic models are also important considerations. If a project has obvious problems with its economic model or has no short-term profitability prospects, this will affect our investment decisions. We will consider the balance between the long-term potential of the project and the short-term financial returns. If a project has strategic value in the long run, we may choose to invest even if it is not profitable in the short term. But this usually requires the project to prove its long-term potential and sustainability.
In general, the necessity of a project and the problem it solves are the core considerations for investment, but the economic model and financial returns must also be reasonably evaluated. We need to ensure that the project can bring the expected returns in the long run while solving practical problems.
Rui @yeruizhang
In fact, many of the projects we invested in are constantly building public facilities in the industry. They are still not profitable and have almost no profit expectations, but they still attract a lot of institutional investment. I personally believe that as long as a project is really meaningful and plays a key role in a certain ecosystem, its value will eventually be discovered. Take Pendle for example. It was not successful at first, but after three years of development, Pendle found its opportunity and succeeded.
The characteristic of this industry is that it is constantly changing, and new opportunities and challenges are constantly emerging. If the project party can seize the opportunities in this process, it will be successful. Even if a project does not seem to be profitable at present, it does not mean that it will never be profitable in the future. For example, Etherscan did not make money at first, but now it is making very good money. They initially made money through rewards and advertising, and now they earn large fees by receiving new chains. This shows that the value and profit potential of a project may take time to emerge.
Therefore, most institutions will be more open to this situation and willing to wait patiently. Investment institutions usually focus on the long-term value of the project rather than just short-term profitability.
Jims @jimsyoung_
I think the concept of Web3 itself does not have a particularly clear definition. Since the concept was proposed, various interpretations have emerged one after another, and many problems that Web2 cannot solve have been attributed to the problems that Web3 needs to solve. In fact, replacing or extending an existing framework into Web3 does not mean that it can solve all problems. This view is obviously unrealistic.
If we take blockchain as the definition of Web3, then in fact many places are already using blockchain. For example, cross-border payments and cryptocurrency transactions have partially realized the concept of Web3. However, there are still many challenges in the current Web3 applications. In some places, they look like "Casinos on Mars", that is, technologies and models that have not yet been widely accepted and recognized. For some countries with immature financial systems, blockchain technology can provide new solutions, but its actual application still faces many obstacles.
External factors are also crucial to the development of the blockchain industry. For example, advances in hardware technology and the development of artificial intelligence can significantly improve the performance of blockchain technology. The change in Ethereum's storage method from disk to hard disk is an example of the advancement of hardware technology on the development of blockchain. These technological advances are not problems solved by blockchain technology itself, but hardware and other external factors promote the development of blockchain technology.
In addition, changes in policies and regulations may also have a significant impact on the blockchain industry. If certain countries relax their regulations on blockchain, it may encourage traditional businesses to enter this field, thereby promoting the development of the industry. For example, the Singapore government's move to promote blockchain technology is a positive example.
In general, the development of blockchain technology depends not only on innovation within the industry, but also on external factors. Although there may not be fully mature applications at present, with the changes in external conditions and the advancement of technology, the blockchain industry is likely to usher in new development opportunities. We need to be patient and actively explore these new opportunities, while paying attention to the impact of external factors on the industry.
What do you think are the necessary conditions for restarting VC tokens? In addition to "improvement of macro liquidity" and "lower early valuation of projects", are there any other answers?
Mason @ma_s_on_
Well, I think first of all, changes in the market environment, including improvements in the macro economy, are necessary conditions for restarting VC tokens. In addition to these, I also think there are several aspects that can promote the restart of VC tokens:
Market Game: Market game plays an important role in determining the value and performance of VC tokens. For example, if the market fluctuates greatly, investors may adopt different strategies to achieve returns. Recently, people joked that "if meme coins are expensive, then value coins may also become meme coins", which shows that the market's game strategy may affect the attitude towards VC tokens. This game is not only reflected in the rise and fall of prices, but also includes investors' reactions to market dynamics.
Game on capital structure: If the performance of VC tokens is poor, the overall performance of VC funds may be affected. In this case, VC funds may face a decline in market enthusiasm, which will drive valuation corrections and market revaluations. This adjustment will help the market re-evaluate investment opportunities and risks, which may lead to re-evaluation and opportunities for VC tokens.
Emergence of innovation: The market is highly receptive to truly disruptive innovation. If new, disruptive technologies or projects emerge that can attract widespread attention and demand, then this innovation may become the driving force behind the restart of VC tokens. Innovation is not just a technological breakthrough, it can also be a major improvement in business models, market demand or operating methods.
Changes in the regulatory environment: The attitude of the government and regulators will also have an impact on the VC token market. If the regulatory environment becomes more friendly or transparent, it may stimulate more investment and market activities, which will have a positive impact on the performance of VC tokens.
Shifts in market sentiment: Investor sentiment and market psychology can also affect the performance of VC tokens. If market sentiment becomes more optimistic or acceptance of risky assets increases, then VC tokens may receive more attention and investment.
In general, restarting VC tokens not only depends on the improvement of the macroeconomic and market environment, but also requires market competition, adjustment of capital structure, innovation drive, and support from supervision and market sentiment. The combined effect of various factors will determine whether VC tokens can usher in a new growth cycle.
Rui @yeruizhang
I think it is like this, how should I put it? What everyone complains about is the unlocking period. During the unlocking period, there will always be selling pressure. Some projects unlock a batch every six months, which is actually okay. The more troublesome ones are unlocked once a month, such as OP and ARB. It is expensive and it can fall, but you can choose not to buy it. But everyone knows that OP and ARB will be unlocked, and you have to buy it despite it. This is unnecessary.
What are the pros and cons? Compared with the previous cycle, there are indeed many traps in this cycle, but as long as these traps are avoided, it will not be a big problem. For example, the performance of Starnet in April is an obvious example. In the past, only investors who were very familiar with and optimistic about technology would invest in such projects, while ordinary retail traders generally would not get involved. Therefore, a distinctive feature of this cycle is that much information is not disclosed and the game tends to be rational.
My view is that whether a coin's value can rise depends on the unlocking schedule. If the project party postpones the unlocking time, it may avoid the selling pressure in the market. The valuation level and liquidity issues mentioned by Mason are also common. Basically, as long as there is no unlocking period, the market will not face large-scale selling problems, so the risk is controllable.
Jims @jimsyoung_
Yes, I think it is basically clear. Mason may be more macro or long-term, while Rui is more micro, focusing on the core points. Then from a macro perspective, there is actually another issue, which is the issue of the best assets, that is, what are the best assets and what can reach a consensus.
In this cycle, we are now fully engaged in price, technology, and various indicators. I know many project owners, and basically everyone knows how much stock they have. In this case, what is a high-quality asset? If there is no threshold for technology, others can do ZK if you do it, and others can do AI if you do it. In fact, everyone is very clear about the price. What can form a barrier? Where is the information gap, and where is the value of non-consensus? I think this is a more core question to answer.
People say VC coins are bad because they don't rise. They just don't rise as much as before. If we use the logic of non-consensus, then what else may be non-consensus? When this non-consensus appears, there are big opportunities hidden behind it. If you find something that others don't, then this is an opportunity.
Just like what Rui mentioned in the previous question, more and more projects can be settled in this cycle. Once the accounts are settled clearly, the story is set, and everyone will work hard towards that point, leaving not much room for imagination.
But there are some things that are difficult to calculate clearly, and they may become non-consensus things. I think this is where great opportunities may emerge from the perspective of a single currency or a single track.
Zheng @ZnQ_626
I have observed that more and more former first-level participants around me are participating in the second level. Regarding this phenomenon, I have a few points I would like to discuss with you.
Do you think that primary market institutions participate in the secondary market because the primary market is not profitable? If these institutions participate in the secondary market, what is the difference in your methodology between primary and secondary investment? What do you think are the advantages and disadvantages of participating in the secondary market?
Mason @ma_s_on_
This question can be answered together. First, it is common for primary market funds to enter the secondary market, because places that make money will naturally attract everyone. As for the advantages and disadvantages of primary VCs participating in the secondary market:
Advantages: Investors in the primary market usually have more inside information and resources, such as in-depth understanding of team capabilities and industry trends. This can help them make more confident investment decisions in the secondary market, and this information is often not available to ordinary retail investors.
Disadvantages: Investors in the primary market may face difficulties in the secondary market because they are used to long-term investment. The secondary market is volatile and there may be many challenges in the short term, which does not fully match their long-term investment strategy in the primary market. In addition, the investment methods of investors in the primary market may not be applicable in the secondary market because the secondary market has more quantitative data to analyze, while the primary market relies more on qualitative judgment.
Rui @yeruizhang
Basically, if you believe in a project, you should stick with it even if you lose a lot. In this case, losses are inevitable.
Zheng @ZnQ_626
So, do you think that the participation of primary institutions in the secondary market is a short-term strategy or a long-term plan? If the primary market improves, will they stop investing in the secondary market?
Rui @yeruizhang
It depends on the situation. If a project performs well in the primary market, institutions may continue to increase their holdings in the secondary market. This behavior is more based on confidence in the project rather than a complete transformation.
Zheng @ZnQ_626
In my opinion, this is first-class behavior.
Rui @yeruizhang
The primary institutions participate in the secondary market not for short-term operations, such as looking at the 5-day moving average or the 10-day moving average. This way of participation is more based on long-term optimism about the project, rather than a complete transformation. The institutions still use their original investment logic, but just shift from non-liquid assets to liquid assets.
Jims @jimsyoung_
I see. Mason's point is very comprehensive. The reason why primary institutions participate in the secondary market is mainly because primary investors have a lot of coins to deal with. For example, when the project invested in before reaches the stage of listing and unlocking, investors may get coins with poor performance. At this time, they need to consider several questions: Should they buy these coins? When should they sell off? How to explain to the community? This also involves the situation where the fund needs to achieve DPI. Dealing with these issues is an important reason for primary investors to participate in the secondary market.
Zheng @ZnQ_626
I may not have defined clearly what counts as participation in the secondary market. I believe that projects discussed in the primary market are not considered as participation in the secondary market. True secondary participation refers to buying and selling directly in the secondary market, which has nothing to do with discussions in the primary market, including OTC transactions.
Jims @jimsyoung_
I see. Participating in the secondary market is often a natural transition process. For example, when you decide to sell a project, you will compare other similar projects on the market, and you may find undervalued coins and then choose to invest. This decision-making process is coherent. Due to habitual thinking, primary investors will continue similar operations in the secondary market. This is a natural phenomenon.
The last question is about the future development form and business lines of Crypto funds. What will the future Crypto foundations evolve into? How will their business lines develop, and what are the logical relationships between these business lines?
Mason @ma_s_on_
I think the first question is, what is the source of funds for future Crypto funds? In addition, what will the future Crypto fund managers look like? The current debate is whether the fund should take the compliance path or maintain the original direction, which affects the future form of Crypto funds. The compliance path may attract investors who are interested in deterministic assets such as government bonds, while the other path may focus more on micro-innovation.
As for the specific form of the fund, how to make money is the key. At present, except for the funding rate arbitrage unique to crypto, other fund models are basically the same as traditional models. Most of the models in the Crypto field can find similar forms in traditional finance, such as VC, hedge funds and platform funds. Therefore, the evolution of Crypto funds is likely to follow the model of traditional finance.
Rui @yeruizhang
I think the final form of Crypto funds depends mainly on whether they can attract LP funds. No matter how the fund operates, it must first convince LP. There may be multiple models for future Crypto funds, but the core is to flexibly respond to market changes. Many large funds have recently launched various special purpose funds, which are not much different from traditional finance. In the end, the performance of the fund and the fundraising still have to follow the market rhythm.
The key to convincing LPs is to show your investment returns. Most LPs in the Chinese-speaking region have experienced the fluctuations of Crypto, and they mainly look at actual returns. Trial investors have already invested, and now the most important thing is to attract new LPs through returns.
Jims @jimsyoung_
In conclusion:
Mason and Rui have already explained the problem very well. From a macro perspective, Mason mentioned that the Crypto Foundation draws on the traditional model, while Rui emphasizes the importance of yield. I would like to add some new trends that may emerge in this cycle:
The rise of special funds: There are many special funds in the United States, such as biomedicine, new energy, etc. This model may be introduced into the Crypto field. In the past, one fund may cover all tracks. Now with the development of blockchain technology, there are more subdivided tracks, and funds focusing on specific fields have emerged, such as DePIN Fund or GameFi Fund. The degree of specialization is getting higher and higher.
Refined management: In the past, fund management may not have been detailed enough, but now more precise fund management and profit calculation are needed. The use of each fund, the timing of buying and selling, and the rate of return need to be clearly recorded and analyzed. This refinement and specialization improves the ability to grasp market dynamics.
These two trends reflect the evolution of the Crypto fund industry in terms of specialization and sophistication, and institutional investors also need to improve their relevant capabilities.
