The competition in the crypto market intensifies, crises beyond VC coin

The crypto market is undergoing a profound transformation. Recently, the phenomenon of "VC coin collapse" has attracted widespread attention, but in reality, this is just a microcosm of the challenges facing the entire market. The root cause of the current situation lies in the excessive investment and unreasonable valuations in the primary market during the last cycle, allowing some projects that should have been eliminated to survive and enter the secondary market with inflated valuations.

Currently, a pyramid-like class structure is forming within the crypto market, where the profits of each level are built upon the exploitation of the lower levels. This internal competition is intensifying, leading to a continuous loss of market liquidity. In addition to VC, there are other more advantageous participants at the top of the pyramid.

In this era of intense competition, the elimination rate of projects and tokens will rise significantly. The previously popular views such as "technology supremacy," "background determinism," and "narrativism" will shift from sufficient conditions to necessary conditions. The only thing the market believes in is real growth - user growth, revenue growth, and adoption growth.

To survive in such an environment, projects need to pay attention to the following points:

1. Organic growth is crucial. Marketing should not solely rely on tools and data but should be highly integrated with product strategy to ensure high retention rates.

2. Establish in-depth cooperation with high-quality KOLs. Founders should personally communicate one-on-one with important KOLs, rather than simply outsourcing.

3. Prioritize protocol revenue as the highest metric. A sustainable business model and revenue sources are the foundation for the long-term development of the project.

4. Build a real economic model. This includes earning sustainable protocol income, matching the token cycle with the project growth cycle, treating incentives as investment behavior, and addressing the issue of class solidification in the chip structure.

Overall, the crypto market is entering a more rational and fundamentals-focused stage. Only projects that concentrate on real value creation and sustainable growth can survive and achieve long-term development in this major reshuffle.