Valuation is both an art and a science. Currently, there are many high FDV projects in the crypto market. Although exchanges have adjusted their listing strategies to deal with community disputes, it is ultimately a "temporary solution". As MEME coins dominate the trading list, institutions, celebrities and politicians have entered the market, and the FOMO phenomenon has intensified.

High premiums for listing valuations, reducing VC profit margins to break the deadlock

In recent years, there have been more and more projects in the crypto field with financing amounts of tens of millions or hundreds of millions of dollars. According to RootData data, the total financing amount of the crypto market in the past year was US$10.161 billion, with an average financing of US$9.6871 million per project. Projects with financing of more than US$10 million accounted for 40.2%, mainly concentrated in the seed round.

The valuations of projects listed on mainstream exchanges are generally high. For example, since 2021, the valuations of 20 projects released by Binance Launchpool totaled approximately US$5.94 billion, with an average of US$297 million per project; the total valuation of 10 projects on OKX Jumpstart was US$5.01 billion, with an average of US$501 million per project.

High-valuation projects used to be the "hot commodity" of investors, but now the market's attitude towards high-valuation projects has changed. Under the huge selling pressure, the token prices of high-valuation projects have performed poorly, triggering the market's "fear of heights".

CoinList issued a statement on May 28 that high FDV itself is not a problem. The problem is that the project is issued to retail investors at a 20-fold higher FDV after private financing. For example, the average FDV of some recent high-profile airdrop projects (such as DYM, STRK, ARB, and W) at listing was US$14.7 billion, 13.3 times higher than the private market valuation.

"This practice is destructive to long-term development because the founder's short-lived unicorn status will quickly disintegrate due to selling pressure from airdrop participants and the private market." CoinList believes that if retail investors can participate at a price close to the last round of VC, the overall satisfaction will be higher.

CoinList pointed out that the retail price of its first five token issuances this year was only 1.04 times higher than the VC round, and there was no lock-up period and a shorter release cycle.

MEME heat intensifies under market competition, chaos arises

Against the backdrop of intensified conflicts between VCs and retail investors, MEME coins have become a mainstream investment target. According to data from Zaheer Ebtikar, co-founder of Split Capital, four of the top ten cryptocurrencies in terms of open interest are MEME coins, namely PEPE, DOGE, BONK and WIF.PEPE's open interest reached $812.6 million, half of SOL's $1.78 billion.

Robinhood's first-quarter revenue also shows the market's love for MEME coins, with its users holding $7.6 billion worth of Dogecoin, exceeding Ethereum's $5.63 billion.

Large institutions are also paying attention to and deploying the MEME field. For example, MarketVector, a subsidiary of VanEck, launched the Meme Coin Index, tracking the six major MEME tokens DOGE, SHIB, PEPE, WIF, FLOKI and BONK; Franklin Templeton published several reports related to MEME coins.

MEME coins have also become a means of gambling for politicians. US presidential candidate Trump announced that his campaign would accept donations from Dogecoin and Shiba Inu coins, and Biden's campaign team plans to hire Meme managers to win the support of young voters. This trend has driven the rise of PolitiFi-related MEME tokens. CoinGecko data shows that as of May 28, the market value of PolitiFi tokens exceeded $1.35 billion.

However, the rising popularity of MEME has also brought a lot of chaos. Recently, the accounts of several crypto KOLs and media celebrities have been hacked and used to falsely promote MEME coins. For example, the account of well-known trader GCR was hacked, involving the MEME token team CAT. There were even radicals who took extreme actions to promote MEME coins, resulting in third-degree burns. This reflects the important role of VCs with endorsement value in information filtering. #内容挖矿