Organizing: Rhythm
Last weekend, the conflict between VC coins, exchanges, and retail investors reached a peak under the influence of two lengthy articles by Binance co-founder He Yi. On June 20th, a project token called Lista DAO was launched on the Binance Megadrop as the second project on the platform’s Launchpad. Due to the involvement of former Binance employees in the Lista DAO team and the project’s previous investment from Binance Labs, many users were optimistic about LISTA and participated in secondary trading. However, amidst the overall market weakness, LISTA did not bring any surprises to retail investors and instead continued to decline. This seemed to be the last straw that broke the camel’s back, and the market’s anger gradually spread from dissatisfaction with VC coins to Binance’s frequent listings that disregarded the interests of secondary users.
On June 21st, He Yi responded in his article, stating that “even if Binance does not list new projects, funds will be diverted due to token unlocks, meme coins, and other factors.” He further explained, “some VCs are indeed the core reason for inflated prices, but VCs generally have a 7-year lock-up period of 4+3 when raising funds from LPs, which includes management fees and dividends. VC tokens generally unlock one year after the TGE (not all), so many VC firms in the industry are also closing down, and some VC LP investments in the crypto space may also go to zero.”
The next day, He Yi once again reviewed the milestones of the cryptocurrency industry, from ICOs and IEOs to DeFi yield farming, and stated, “Today, the market has indeed changed. The infighting between rug factories and L2 projects has turned into a farce, and the era of rug factories may be coming to an end.”
These two articles highlighted the current market situation: the prosperity of the ICO era that retail investors anticipated (the altcoin bull market) has not reappeared, and the long-awaited airdrop period has ended in disappointment. With tight market liquidity, the conflict between retail investors, exchanges, and VCs has escalated. Retail investors generally believe that VCs hold low-cost tokens, and the unlocking of these tokens floods the market with selling pressure. On the other hand, exchanges frequently list new coins, exacerbating fund diversion, and the performance of these new coins is often poor. Once retail investors buy in, they are often “harvested.”
He Yi’s articles sparked a two-day debate, and many industry insiders expressed their opinions. Here are some of the insights compiled by BlockBeats:
Support for Binance – Data analysis by KOL killthewolf.eth:
If you buy a bag of rice at a supermarket and its value depreciates the next day, blaming the supermarket owner for listing too many new varieties of imported rice seems a bit one-sided to me. The fundamental reason for determining the price of rice is still the supply and demand relationship. You can blame the producers for continuously producing new varieties of rice, or blame the village for not attracting new residents to increase the demand for rice. However, the supermarket is only an intermediary and cannot determine the price of rice. Moreover, there are countless supermarkets in the village, and Binance is just one of them. Even if Binance refuses to list new varieties of imported rice, there will be many other supermarkets eager to do so. This is the law of the market.
Observation of the FUD surrounding ZKSync’s listing by KOL Zijing:
It’s hard to understand the recent criticism of Binance for listing projects like VC coins. In fact, CEXs are not law enforcement agencies and cannot and should not regulate whether projects are malicious or engage in insider trading. Binance’s statement that “even if Binance doesn’t list these projects, they exist” is objective. If users really want to buy, they can buy them on the blockchain even without CEXs. CEXs only provide a convenient channel for users to buy coins, but they should not change or influence users’ trading decisions.
Furthermore, whether it’s Binance, OKEx, or any other major exchange, they cannot determine whether a project is malicious. Therefore, users should take responsibility for managing their own wallets and not let the listing on an exchange determine their trading principles. If the listing on a major exchange influences investment decisions and leads to losses, users should bear the consequences of their gambling mindset. In other words, if retail investors can reach a consensus and firmly resist malicious projects, denying them any liquidity, without any buy orders, no matter how strong their market makers are, without a market to support them, they will eventually go to zero. At that point, there is no need for users to offer advice, and major CEXs will also abandon them. This should be their destiny. However, things don’t go as planned in this market, as there are too many speculators who always believe they are the smartest between information asymmetry and market sentiment. They must bear the consequences of their actions, whether they win or lose.
Questioning Binance’s inaction by individual investor Amy Wang:
During the previous bull run, there were at least small-cap projects with market capitalizations in the millions or tens of millions when they were listed. Binance’s users benefited from this, and as a leading CEX, it greatly contributed to the industry’s positive development and formed a virtuous cycle. This time, the VC coins seem to be recreating the dot-com bubble of the 2000s, with numerous infrastructure projects without many actual users being listed at billion-dollar valuations, with exchange users ultimately footing the bill. I sincerely hope that the support for innovative projects with medium and small market capitalizations, as outlined in the new plan, will be implemented soon, activating potential new protocol ecosystems and injecting hope and confidence into the industry and the market.
Analysis by crypto KOL bit yi:
After new projects are listed on Binance and perform poorly, it becomes increasingly difficult for retail investors to make money. Meanwhile, Binance continues to list high-market-cap coins. The opportunities for retail investors to make money on Binance are diminishing. Of course, you can argue that the performance of token prices is the responsibility of the project team, and Binance is just an exchange platform that doesn’t interfere with token prices. However, it is undeniable that with Binance’s influence and user traffic as the number one cryptocurrency exchange, its frequent listings objectively dilute attention and liquidity. Of course, you can also say that if these projects are not listed on Binance, they will be listed elsewhere. Binance is just an exchange that provides trading services. However, considering Binance’s current position in the minds of retail investors, Binance is more than just an exchange. Of course, you can argue that Binance should responsibly control the speed of listings and take the lead in the industry, but you could also see this as a form of moral kidnapping. Binance is a business, and as a business, it’s normal to focus on profits. However, as a leading cryptocurrency exchange in the industry, Binance should not only prioritize profits but also guide the industry in the right direction and convey the spirit of the crypto-native community. Listing a large number of high-market-cap VC projects dilutes the already limited liquidity. The chains with these VC projects, valued at tens of billions of dollars, have low on-chain activity. Is it a flaw in Binance’s listing reputation system, or has Binance’s values deteriorated since the departure of CZ?
The principle that water can carry a boat but also capsize it has been passed down through generations in China. The overall evaluation of Binance by users has taken a sharp downturn in this new cycle. Binance should take this seriously. The essence of an exchange is to serve a wide range of users and provide a place for trading. However, the closer it gets to capital, the further it gets from users. Native cryptocurrency exchanges in the crypto industry should stand tall and not become puppets of the web2 world of capital. Retail investors cannot tolerate any wrongdoing. “Integrity” is the bottom line that Binance should uphold.
Other opinions and analysis from BixinGroup founder Xingkong:
A bunch of retail investors question VC coins, but they don’t understand that without VCs taking the first step into the minefield, they would be the ones facing being harvested. I have encountered many projects that bypassed VCs and directly raised funds from retail investors because they are easier to deceive and bring their own traffic. The projects have never encountered such good retail investors before. VC following is a normal strategy for venture capital, but it’s hard for VC’s limited partners (LPs) who actually put in money. Retail investors can at least experience the pain of losing money, but LPs don’t even know how they lost their money.
VCs are actually the weakest big retail investors in this game, but we don’t see them crying foul. Instead, it’s the platforms that steadily earn fees from handling transactions and listings that are crying foul. The world is treacherous. Just think about where the money comes from for a big exchange employee to get rich. It’s all your money. Most importantly, it’s the money from VCs.
Crypto KOL Chuanmu:
Binance’s strategy is difficult to break through. Binance collaborates with its own factions, institutions, and project teams to manipulate the market.Creating a new coin to reap profits, getting investors on board to obtain chips. Then, distributing a portion of the chips to BNB major holders to form a community of shared interests. Before listing, providing free quotas to KOLs of all sizes responsible for promotion. Once the public opinion turns unfavorable for Binance, the BNB major holders and KOLs benefiting from the new coin will collectively act to reverse the public opinion. Either a new tech guru with leadership skills emerges to create a new trade, fee-free, and mine platform coins for a year, or everything will be difficult to change. There’s no game-changer, and now retail investors are just piglets, as they are being exploited due to the dominance in trading volume and user base, they can only be in a state of being exploited.
Cryptocurrency KOLs are foolish
Having been in the cryptocurrency market for many years, I have never taken money from Binance, so I can be objective. Binance’s PR should not treat the posts of foolish people as negative, because foolish people think objectively in the long run, for the industry and for Binance.
1. Sister Yi’s summary of the ICO, DEFI era, and IEO era is also a time of mixed blessings. In fact, both ICO and Defi have a lot of pitfalls. At that time, the dividends were indeed more significant. But retail investors were also extremely prone to losses. IEO, on the other hand, has a very high success rate. Good project quotas are also difficult to obtain, with a lot of studios snatching KYC lottery wins, making it difficult for honest retail investors to make money. Retail investors are the most vulnerable group in any era and the most in need of protection.
2. Now, Binance’s role is a multi-faceted monopoly platform that integrates exchange, brokerage, regulatory authority, clearing and settlement institutions, primary market investment and mergers and acquisitions, and listed company groups. Everyone should carefully read this sentence. In the traditional stock market, each of Binance’s roles must be subject to strict regulation. Each role, without regulation, has the ability to do evil. Such enormous power must correspond to enormous industry responsibility. What are these responsibilities? This is the question Binance needs to consider, as this is crucial to Binance’s long-term development.
3. CZ claims that he is building. Binance’s role is not that of the project party, but a multi-faceted monopoly platform that integrates exchange, brokerage, regulatory authority, clearing and settlement institutions, primary market investment and mergers and acquisitions, and listed company groups. Binance is a role far removed from the project party, and its responsibility is not to build. In fact, Binance has never focused its main efforts on building, but rather on maintaining the leading position of the exchange. The community has never expected Binance to build anything. A good referee is one who never takes the field to play.
4. The discussions of VCs and brushing studios are just small ripples in the historical tide. VCs provide funds for the primary market, a time-honored industry. Studios make money by brushing orders, giving project parties fake data, which has also been around for a long time. Generally speaking, the securities market is regulated to prevent VC’s from making sudden investments and unusual changes in equity before listing. Regulatory authorities will also rigorously investigate data fraud by project parties. This crackdown and regulation keep the various roles in balance. At present, VC coins are despised, and brushing studios and project parties are in conflict, which is a process of rebalancing. We hope that this rebalancing process will include exchanges, led by Binance, sacrificing some short-term interests to promote a healthier industry.
We can have rational discussions, but we don’t want KOLs who have taken Binance’s money to come and stir up trouble. If you don’t care about retail investors, don’t care about industry development, and only care about your own 400U, you are not as brave as a foolish person. Finally, ending with the words of Stephen Chow: The greater the ability, the greater the responsibility, you cannot avoid it. Web3 entrepreneurs, little people
This industry will not change, we can only change positions. Today, He Yi’s post mentioned that the ICO of 2017, the IEO of 21, and even the brushing strategy of 23 are no longer suitable for the current market. As the whistleblower, she is also reminding everyone that it’s time to change the logic of making money in the past, indicating that the market has truly reached a turning point.
1. Brushing will not disappear: The definition of brushing itself is very broad. It is not just simply massaging for chips, but also a way of thinking, a way of continuously looking for arbitrage opportunities in this market, finding opportunities to scale new asset issuances. The way to obtain early chips will only change, not disappear, it’s just that the era of mindless massaging and chipping is gone.
2. What remains unchanged: Everyone is concerned about how the future will change, but it’s better to think more about the next five years in the industry and what parameters will not change. Then we just need to continue to refine these unchanged parameters, so that when new opportunities arise, we can have a first-mover advantage. For example, the four elements of the brushing race track: research – capital – technology – manpower, no matter how this race track changes, it cannot do without these four elements.
3. Increasing returns: In addition to these four elements, there are also factors such as influence, ecological niche, circle, expertise, judgment, etc., and what will not change in the future is the larger your influence, the higher the distribution of resources, and scarce resources will be more inclined to you. The higher your ecological niche, the closer you are to the source of information, and your chances of winning the same opportunities are higher than others. The higher the quality of your circle, the faster your growth, and the better resources you acquire.
4. Seeking inward: It’s the same in poker games, we should pay more attention not to the win or loss in a game, but to the quality of decision-making. As long as we add time to this weapon, constantly optimize our decision-making quality, and the decision is based on sufficient reasons, even if the winning percentage is a few points higher than others in the long run, the results will be vastly different. The core logic is still inward seeking, not paying attention to parameters we cannot control.
5. The evolutionary path will not change: If we observe the history of Internet development, we will find that over the past 20 years, the trend of class solidification will not change. 2% of people will have 98% of resource allocation, such as Tencent, even if it’s the same person, the results after joining in 2005, 2010, and 2018 are completely different, which will not change due to individual will.
6. Our industry will also follow this path, and the trend of class solidification is gradually becoming evident. What can we do as individuals? If we don’t want to be exploited as the bottom layer in the future, we need to pay attention to our growth rate, which must far exceed the industry average, accumulate our own influence, professional capabilities, and our ecological niche, because the future trend is towards organization, and certain long-term profits will be eaten up by professional organizations.
7. My current strategy: Light asset operation, to comply with the antifragile model. The current phase belongs to a turning point in the brushing race track, as well as a turning point in the industry. In this window of time at the turning point, I will use a lighter method to run the team and reduce operating costs. When a new “right-side breakthrough” point appears, I will continue to scale up operations. This is a difficult stage in poker, where no matter how you play, you can’t hit your range. At this time, you need to learn to wait, patiently wait for your range, but before this time comes, avoid consuming more gas, the most important thing is not to leave the table.
8. The law of survival of the fittest in any industry will not change, and what we can do is change positions. The arbitrage brushing opportunities in this industry will always exist, and what we need to do is to have chips on the table when the opportunity arises.
Cryptocurrency KOL CryptoMaid, Cryptocurrency Maid
The era of brushing has ended, and people from different groups are not talking about the same thing.
1. Ordinary users say: Brushing no longer makes money, the era is over.
2. Investors say: Unwilling to use their own money to pull up the initial circulation, forcing themselves to hedge short positions, and covering project parties’ cashing out.
3. Project parties say: Relying on brushing user data, deceiving investors, deceiving no longer works, the era is over. The consensus is broken. One of the problems is that the Ponzi nature of this model is too low, eventually becoming a PVP mutual cutting, and no one picks up the plate. The Ponzi scheme can realize paper wealth for everyone and can attract users outside the circle. Everyone knows that Edison experimented with over a hundred materials to find tungsten wire to make light bulbs. Few people know that before finding tungsten wire, he had already gone through more than a dozen rounds of melting. If tungsten wire is not found in the end, then all the previous experiments were just a Ponzi scheme.
Investor Kay Capital
VC coins, high MC/FDV are superficial, and the deeper level is the average cost of chips. If the average cost of chips for a coin/stock is 1%-10% of the current price, then a second wave of upward movement in the medium term would be a miracle. The weighted average cost of VC coins after the release of chips is too low.
Cryptocurrency KOL Neso
After Binance, OKX, and other first-tier exchanges were criticized for listing VC coins, it is possible that they will accelerate the listing of meme coins with small to medium market capitalization to win the favor and trading volume of retail investors. Pay attention to market cap between 1-5 billion, holder count above 10,000, good community base, and targets that have gone through thorough washing out.
Cryptocurrency KOL PumpLUO
Many people question the high valuation and unlocking of institutional VC coins, but they have actually fallen into a trap. The biggest harm to the market and the biggest meat for the exchange is contract leverage! 1. Diversion of funds. 2. Separation of liquidity. 3. Naked shorting, contract trading and coins are completely unrelated to the issuance of derivatives products. 4. Rapid consumption of retail funds (crazy opening of strategy with VIP policy incentives).
The era of brushing has ended, and people from different groups are not talking about the same thing.
