The essence of the "VC coin collapse" is the overinvestment and irrational valuation in the primary market during this cycle, which allows VCs and projects that should have been eliminated to survive, raise funds, and appear in the secondary market at unreasonable valuations.
· In the absence of external cash inflows, the degree of involution in the crypto market is extremely high and has formed a pyramid-like class structure. The profits of each level come from the exploitation of the level below it and the withdrawal of liquidity from the market. This process will lead to the intensification of distrust in the next level, making the involution more and more serious. In addition to VC, there are a large number of higher levels in the pyramid.
· In the era of great involution, the mortality rate of projects and tokens will increase significantly. The top-down "technical theory", "background determinism", and "narrativeism" will be transformed from sufficient conditions to necessary conditions to a greater extent. The only thing the market believes in is real growth, real user growth, real income growth, and real adoption rate growth.
