In the impression of many people who are not old hands in the cryptocurrency circle, starting a Web3 business is equivalent to issuing a coin.
Although this may sound like an insult, it more or less represents the misunderstanding of some people in the current Web3 industry. For many entrepreneurs who have just entered the Web3 circle, the biggest obstacle to transformation is how to develop tokens, how to connect to online exchanges, and how to mix in the cryptocurrency circle to engage in market operations. These technical and market challenges make many entrepreneurs feel at a loss. And when you don’t know where to start, “one-stop service” comes into being, trying to solve complex problems in a simple and fast way.
As seen by Lawyer Honglin in a WeChat group, the 'one-stop service' for token issuance in the crypto space has recently become increasingly active, with all-encompassing service providers handling everything from token development, DApp development, private placements to community operations and exchange listings, even including subsequent legal services. For project teams without technical and market experience, this is undoubtedly a windfall—just pay the fee, and the token issuance, listing, and promotion can be completed in one go. However, behind this apparent convenience lies numerous pitfalls.
Misunderstandings of Web3: It's not just about issuing tokens
In fact, the connotation of Web3 is far richer than simply issuing tokens. Web3 is the next generation of internet development, emphasizing decentralization, user autonomy, data privacy, and the widespread application of blockchain technology. It involves not only the financial sector but also encompasses various aspects such as social networking, entertainment, content creation, and supply chain management.
However, the current market is flooded with projects centered around token issuance, leading many to equate Web3 with 'issuing tokens.' This narrow perspective not only limits people's understanding of Web3's potential but also buries truly valuable Web3 applications. In this context, entrepreneurs often find themselves compelled to focus their energy on token issuance and market speculation, neglecting the deeper technological and application development of Web3.
To meet the customized needs of Party A, some service providers within the industry may use various means to create a facade of fake users and artificial prosperity. On the surface, the project appears hot, the community is active, and token trading is vibrant, but this 'prosperity' is often the result of manipulation. In reality, there are not many genuine users participating, and the vast majority of active accounts are organized and disciplined '10U War God Groups.' These so-called 'War God Groups' usually create market activity by buying and manipulating tokens to attract more investors' attention.
More seriously, some service providers, in pursuit of short-term results, even adopt a multi-level marketing model to recruit new investors, exaggerating the project's potential and prospects to attract uninformed novice investors. These service providers lure investors to invest large amounts of money through inflated market predictions and false success stories. However, once these investors enter the market, they find that the project lacks substantial progress and the token price cannot be maintained.
When service providers fail to deliver on their promises, project teams naturally face skepticism and criticism from investors. Many entrepreneurs hoping to simplify token issuance through 'one-stop services' ultimately find themselves trapped in pitfalls set by competitors, with projects struggling to survive and even facing legal risks. This trust crisis has left many entrepreneurs who aspire to long-term development in the Web3 field feeling distressed.
Returning to the fundamentals of business, does issuing tokens really equate to success?
Setting aside legal risks, returning to the fundamentals of business, entrepreneurs need to ponder: does token issuance itself truly determine the success of a project? In other words, even if you successfully issue tokens and list them on exchanges, good times may be hard to come by. After all, what truly determines whether a project can operate long-term are a clear business model, market demand, and sustainable operational capabilities.
Issuing tokens, as a financing tool, is essentially similar to traditional enterprises raising funds by issuing stocks or bonds. Token issuance can provide initial financial support for the project, but it does not directly determine the project's success or failure. Real business success lies in the project's intrinsic value creation, meeting the genuine needs of users, and maintaining continuous innovation and operational capabilities.
Understanding and meeting market demands is key to the success of any business project, and Web3 projects are no exception. A successful Web3 project first needs a clear and feasible business model. The existence of tokens is not only to raise funds through issuance but also to ensure that the project can realize its value in the future. The business model needs to answer key questions such as what problem the project solves, who the target users are, and how it achieves profitability. Entrepreneurs need to study the target market in depth to understand the real needs and pain points of users, so that they can design truly attractive and competitive products. Neglecting market demand and solely relying on token speculation, without substantial product and service support, will significantly undermine the sustainability of long-term development. Conversely, a project with a clear business model and practical application scenarios can maintain stable long-term development based on its inherent value, even if token prices fluctuate greatly.
The success of Web3 projects does not solely depend on the initial token issuance; it requires long-term operation and maintenance as well. This includes continuous technical iteration, community building and management, and market promotion and maintenance. If a project lacks effective operational strategies after token issuance, leading to a decline in user experience and an inability to maintain user activity and engagement, then the value of its tokens will also struggle to stabilize and increase.
There are too many projects in the market that ultimately see their token prices plummet due to neglecting these fundamentals. After issuing tokens, projects will still face immense survival pressure. Countless cases have proven that relying solely on token issuance to raise funds, without a clear business model and ongoing operations, leads to token prices skyrocketing in the short term only to crash rapidly, causing a loss of investor confidence and putting the project team at risk of a funding crisis.
Lawyer Mankun's advice
In practice, the trust relationship between service providers and project teams is often established on contracts and agreements, but these contracts cannot fully protect the rights of the project teams. Once problems arise with service providers, project teams often lack effective legal avenues to safeguard their interests. In such cases, project teams not only have to bear financial losses but may also suffer damage to their reputation and future development opportunities due to project failures.
When faced with the temptation of one-stop services, entrepreneurs need to maintain a clear awareness to avoid falling into traps set by competitors. Below are some suggestions from Lawyer Honglin to help entrepreneurs make more informed decisions when selecting service providers.
1. Choose reputable service providers with transparent cooperation models
Uncle Jack Ma once said something very practical: There are no businesses for businesses, only businessmen for businessmen. When mixing in the business world, character is paramount. When choosing a one-stop service provider, priority should be given to companies with good reputation and credibility in the industry. One can assess their reliability by reviewing past project cases, client evaluations, and industry reputation. A reputable service provider usually pays more attention to the long-term development of the project, rather than just short-term market results.
Entrepreneurs should ensure the transparency of the cooperation model when collaborating with service providers. Clearly define the responsibilities and obligations of both parties, sign detailed contracts specifying the specifics of services and delivery standards. Avoid choosing service providers with vague descriptions and overly high promises to prevent disputes and trust crises during the collaboration process.
2. Dual support of technology and market
The technical foundation of Web3 projects is crucial. Whether it is the security of smart contracts, the stability of blockchain networks, or the user experience of DApps, solid technical capabilities are required. A technically robust project can ensure user data security, efficient transactions, and stable system operation, thus winning user trust and support.
The community is the lifeline of Web3 projects. An active and high-quality user community can provide continuous support and momentum for the project. Entrepreneurs need to invest resources in building and maintaining the community, attracting and retaining user participation and contributions through transparent communication, effective incentive mechanisms, and valuable content. An excellent service provider should not only provide technical support such as token development but also have the capability for market operation and promotion. It is advisable for entrepreneurs to prioritize those service providers that can offer independent and professional community management services, avoiding those that rely on fake users and short-term prosperity, to ensure real community activity and long-term user participation.
3. Legal and compliance guarantees
As countries around the world tighten regulation on cryptocurrencies and blockchain technology, compliance operation becomes an aspect that Web3 projects must prioritize. Entrepreneurs need to understand and comply with relevant laws and regulations to ensure that projects operate within a legal and compliant framework. Through legal and compliant operations, projects can not only avoid legal risks but also enhance the trust of investors and users.
Web3 projects involve complex legal and compliance issues, and entrepreneurs should choose service providers that can offer comprehensive legal services. Ensure that the project can comply with relevant laws and regulations during token issuance, exchange listing, and subsequent operations, to avoid project failures due to legal risks.
Summary
Issuing tokens is just the starting point of a project, not the endpoint. Entrepreneurs' desire to simplify token issuance through 'one-stop services' is understandable, but they must not regard token issuance as a universal key to solve all problems. To establish a foothold in the Web3 world, the real moat lies in solid technical capabilities, a clear business model, and compliant operational pathways, rather than simply token issuance or short-term market speculation.
Only by organically combining these three elements can one stand out in the fiercely competitive Web3 field and achieve real long-term development. I sincerely hope that all entrepreneurs transitioning to Web3 maintain a clear mind, deeply understand the essence and potential of Web3, and avoid being misled by temporary market trends. Only by being grounded can one create a brilliant chapter in this field full of opportunities and challenges.