Written by: Dayu, Crypto KOL

Introduction

"Yesterday, the article "The Eastern Crypto Community Cannot Always Be a Meme, the Eastern Community Needs a Wildfire" written by the founder of IOSG sparked heated discussions, and different practitioners expressed their views on the article. This article is the response of the well-known KOL Dayu to the article."

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IOSG should be one of the funds in the cryptocurrency circle that focuses most on industry development and long-term value. Most of the projects it invests in are industry and infrastructure projects. It discusses memes and value coins, and calls on the industry to shift from memes to things with long-term value.

From the perspective of the objective laws of development, only with a solid foundation can there be tall buildings and prosperity. Therefore, investing in infrastructure and focusing on long-term value is very correct and admirable - the foundation of the industry cannot change.

Although I mainly play with memes, I also said a few days ago: The cryptocurrency circle cannot be just memes.

Therefore, first of all, I agree with @jinzhoulin’s point of view that the cryptocurrency circle cannot be just a meme, but should pursue higher value.

Meme is indeed a kind of culture, and this culture is enduring, has its own charm, and will always exist. But once this culture is linked to tokenization, no matter how well it is packaged, it is essentially a game of passing the parcel, with the person in front hoping that the person behind will take over, no matter which meme it is.

However, Jocy and I still have different understandings, so I would like to share them with you for discussion.

1. Meme is a natural choice in the market stage, and it will make the cryptocurrency world better rather than worse

The essence of meme is passing the parcel, but is it valuable? Yes, it is.

To a certain extent, this simple and violent wealth game is in line with human nature. Therefore, it is the easiest to attract people, and is therefore very helpful in attracting new members to the cryptocurrency circle.

No one should ignore the fact that people come to the cryptocurrency circle basically for the wealth effect - whether it is the early Bitcoin, the later ICO, then doge and shib, and then to inscription. After each wave of fanatical irrational speculation, the cryptocurrency circle is not worse, but better, because each time it attracts more Bitcoin believers and develops more prosperously.

Looking back at history, I think that it is everything in the past that has created today's Bitcoin, no matter what value or bubble it is, whether it is the 3M scam that attracted a large number of people to know about Bitcoin, or the ICO that attracted countless people to join the circle, or the wealth-making myth of doge and shib, or the craze of the whole people's inscriptions, all of them have made today's Bitcoin.

Therefore, I think we don’t have to worry about bubbles covering up value, memes diluting Bitcoin’s idealism, and destroying the underlying value of blockchain.

The market evolves according to its own laws. We don’t have to worry about anything. Good things will get better and better, and bad things will be eliminated.

This time, meme is not eliminating Bitcoin and the cryptocurrency circle, but those "air coins" and "sickle coins" disguised as valuable coins.

2. Valuable projects are not equal to valuable coins

Not every project can call itself a valuable coin - the opposite of a meme is not necessarily a valuable coin, it may also be a "virtual coin".

We should define it first. Value coin itself is a very general term. Generally, the more idealistic classification is based on what problems the project solves and what it contributes to the world.

But there is a problem with this classification, that is, the project has value, but the currency may not.

Because, logically, as long as the project solves a certain need, it has some value in a certain sense, and there is nothing wrong with that.

However, it is different at the token level. The tokens may be hyped up very high - this market frenzy and randomness seems to have nothing to do with the project owners and VCs.

However, the inequality in costs between the two parties is not taken into account here. The costs of VCs, project parties and retail investors may differ by 100 times, and the professional knowledge may differ by 10 times. On the battlefield, it is like a bomber fighting against an unarmed farmer.

In this case, both retail investors and VCs are investors, but their rights, responsibilities and interests are completely unequal.

VC can participate in the investment at a price of 0.0001, giving full play to its status and industry resources.

When retail investors make purchases at the high level, due to the careful design, they buy a chip with a value of 0.001 under the narrative packaged by the project party and VC. If this chip finds a professional and skilled market maker, it can continue to push up the price for a few days, and then drop by 70%, completing a beautiful textbook-style coin listing teaching.

This is not fair!

Retail investors actually bought the coins but did not enjoy anything. Although everything seems to be "self-inflicted", retail investors actually have their own demands: the listing price of the token should not deviate too much from the true value!

Most retail investors, due to their lack of investment knowledge, do not know and are unable to exercise this power, so they will rush to open the ICP of tens of billions and then hang directly on the top of the mountain.

Or they could go for ARB, which has good business performance and is valued at 10 billion. As a result, the huge amount of release in the later period hit them hard. Behind the bloody trend is the continuous unlocking and dumping of investors and project parties. It is another takeaway salary delivered by the second-level retail investors in Liege.

Just imagine, if the economic model of all projects on the market is the same as arb, how hard would it be for retail investors?

Why do retail investors rush to meme? It’s not that they don’t care about value, it’s not that they are not idealistic, it’s just that the “last 10u” is too much to lose…

3. People don’t hate value coins, but air coins disguised as value coins

The purpose of hyping memes is to have a slightly better future. If there are better options, retail investors will not like memes.

What is a better option? We have many. We can think of many.

For example, in the Binance ICO in 2017, @heyibinance and @cz_binance raised funds to issue bnb. It was too cheap at the time. Today, the company is getting bigger and bigger, but it always puts the rights and interests of bnb holders in an important position. The bnb destroyed is at the level of hundreds of billions of dollars. When a project is listed on Binance, billions of dollars of airdrops are directly given to holders. Let’s not discuss the listing of the currency for now. Just look at it from the perspective of bnb holders (I am not one). People who hold bnb can indeed feel that they have a sense of existence as a holder.

However, most tokens do not have this. Most tokens issued by valuable projects are not only not value coins, but also very vicious "leek-cutting" coins.

They have very typical characteristics:

1. Unfair token distribution

The early chips were divided between VC and the project party, and very little was given to the community. They even used despicable means to steal gas during airdrops and engage in insider trading during airdrops.

2. The chip distribution is very bad

All early chip holders, including the project parties, are thinking about how to get retail investors to take over better. What they try to fabricate is not to provide benefits to coin holders, but even worse, they are weaving traps to make leeks jump, so that they can get financial freedom in one go.

The project that impressed me the most recently is $aevo. They raised $rbn and introduced a 1:1 exchange of rbn for aevo to attract leeks to pledge. When the pledges were almost full, they just smashed them to death. What value does this project have? I think it is almost the same as murder for money.

I believe that if retail investors who read this article are willing, they can freely tell us in the comment section how much they lost on this project. I believe you can easily find a large number of people who lost money, because basically no one made money, except the project party.

I don’t think it’s good to chase after a meme, but by comparison, it’s a more clear death.

Not only that, most projects release huge amounts of funds. If you go to unlock and take a look, you will find that at least hundreds of millions, billions, or even tens of billions of dollars are unlocked every month to be released to secondary retail investors. The cost of these unlocked chips is basically 10 times or 100 times.

To check the unlock, you can visit the following website (I have also included it in http://dayu.xyz for your convenience) https://token.unlocks.app

3. Low project value and high token valuation

What the project owners and VCs are researching is not how to bring benefits to users or how to make the project develop better, but how to reduce the circulation of tokens, how to drive up the prices, and how to sell them - including how to issue tokens quickly during a bull market, and how to return to zero in a bear market.

4. Value and Tokens Are Completely Unrelated

The project itself has low value or even no value, but has an extremely high valuation and a very insidious release. This is the norm for 99% of projects.

Projects like aave and uni mentioned by Jocy do have value in themselves, but how much do this have to do with users?

As retail investors who basically do not participate in voting, holding tokens has no benefit - and participation is meaningless because of the small amount. At the same time, retail investors also have a mission to take over VC's chips - such as the big villa of the founder of CRV that is circulated in the community...

4. How to solve it?

People's blanket choice of memes is only temporary, and everyone likes projects with long-term value - just like even bad people like to be friends with kind and good people.

I look forward to projects where costs are fairer, value is more evident, and distribution is healthier.

If you want retail investors to grow with your project, then please raise funds directly from retail investors at the same cost as the team and VC. If you lose money in this way, it is because you have no vision, did not choose the right team, did not choose the right project, and gave a high valuation.

If you want retail investors to provide liquidity at the secondary level to take over, then please treat retail investors as human beings and respect their rights as coin holders - let retail investors enjoy the same rights as shareholders and enjoy the dividends of project development: whether it is dividends or repurchases, they are all optional, or the project itself can have great development, and communicate more with the community to display various data.

You are in the oracle business, so what is your revenue, what are your expenses, how does your business compare to your peers, and what do you think is a reasonable valuation?

If you also think that the project has no value and you just want to issue a Meme coin, then it is best to release 100% of the chips at once, and don't do any tricks, just airdrop 100% of them directly - if the team wants the coins, go to the secondary market to buy them, buy more if you think they are undervalued, and don't buy any if you think they are overvalued - anyway, a truly valuable project will definitely not survive by selling coins, right?

In general, project owners need to be sincere, think about the value of their projects, think about whether selling coins is the biggest revenue source, think about how to reward coin holders, and think about how to attract the community through issuing coins and rely on the community to achieve long-term development.

It’s late at night, let’s stop here for now.