Fierce debate: Market liquidity is in crisis, and it is increasingly difficult for retail investors to make money. Are exchanges and VCs the original sins?

Last weekend, the conflict between VC coins, exchanges and retail investors reached its peak under the catalysis of two long articles by Binance co-founder He Yi. On June 20, the project token called Lista DAO was launched on the platform as the second Launchpad project on Binance Megadrop and was open for trading. Because the Lista DAO team members include former Binance employees, and the predecessor of the project has also received investment from Binance Labs, many users are optimistic about LISTA and participate in secondary trading. However, in the overall weak market, LISTA did not bring any surprises to retail investors, but fell all the way, which seemed to be the last straw that broke the camel's back. The market's anger gradually spread from dissatisfaction with VC coins to Binance's frequent listing of coins but ignoring the interests of secondary users.

On June 21, He Yi responded by posting a statement, saying bluntly that "even if Binance does not list new projects, funds will be diverted due to token unlocking, Meme coins, etc."; "Some VCs are indeed the core reason for the inflated prices, but VCs generally raise funds from LPs for a 7-year lockup period of 4+3, and collect management fees + dividends; VCs generally unlock funds one year after TGE (not all), so many VCs in the cryptocurrency circle are also going bankrupt, and some VCs' LP investments in the cryptocurrency circle may also return to zero."

The next day, He Yi posted another article reviewing the iconic development milestones of the cryptocurrency circle, from ICO, IEO to DeFi nesting dolls, and said, "Today the market has indeed changed again. Lu Mao Studio and L2 The cannibalism of projects has turned into a farce, and the era of hair-pulling may be coming to an end. ”

The two long articles point out the current market situation: the prosperity of the ICO period (copycat bull) expected by retail investors has never appeared again, and the years-long expectation of airdrops has been dashed; under the tight market liquidity, the contradictions between retail investors and exchanges and VCs have intensified. Retail investors generally believe that VCs take tokens with low chips, and the unlocking selling pressure pours into the market. On the other hand, exchanges frequently list coins, exacerbating the diversion of funds, while new coins perform poorly. Once retail investors take over, they will be "harvested".

He Yi’s long article also triggered a two-day debate. Many industry insiders expressed their views, which BlockBeats summarized as follows

Support Binance

Data collation KOL Kill the Wolf killthewolf.eth

You bought a bag of rice in a supermarket, and the rice depreciated the next day. You blamed the supermarket owner for putting too many new varieties of imported rice on the shelves recently, which caused the rice in your hand to depreciate. I think this logic is a bit one-sided. The fundamental reason for determining the price of rice is still the supply and demand relationship. You can blame the producers for constantly producing new varieties of rice, or blame the village for not having new people move in to increase the demand for rice. But the supermarket is just a middleman from beginning to end, and there is no way to determine the price of rice. Moreover, there are countless supermarkets in this village, and Binance is just one of them. Even if Binance refuses to put new varieties of imported rice on the shelves, there will be a bunch of supermarkets rushing to put them on the shelves. This is the law of the world.

KOL, senior practitioner Zijing

Observed that public opinion has been very serious about the listing of ZKSync recently. But in fact, I can't figure it out. CEX is not a law enforcement agency. In addition to having some deterrent effect on the project party's Rug behavior to a certain extent, it is impossible and has no obligation to supervise whether the project party is doing evil or rat warehouse. What Yijie said here is still very objective. "Binance does not list these projects, but these projects still exist." If users really want to buy, they can buy them on the chain if not on CEX. CEX listing coins only provides a channel. CEX needs traffic. Where there is traffic, there are potential new users, and CEX should appear there. There is no problem from the business logic. CEX only provides users with the convenience of buying coins, but it cannot change and should not affect users' buying and selling decisions.

In addition, whether it is Binance or OKX, or any other large exchange, it cannot decide whether a project is evil, so please manage your wallet and do not let a large exchange list a coin to determine your underlying buying and selling principles. If your investment decision is affected by listing on a large exchange, and the purchase leads to losses, please bear the consequences of your gambler's mentality. In other words, if retail investors can reach a consensus, they will resolutely resist the evil project parties and not provide any liquidity to such projects. There will be no buying orders. However, no matter how strong the market makers are, without the market to take over, it will eventually go to zero. At this time, there is no need for users to advise. When the time comes, the large CEX will also abandon it. This should be its fate. But the opposite is true. There are too many speculators in this market. They always think that they are the smartest one between information gap and market sentiment. Then they have to bear what they should bear. Profits and losses come from the same source.

Questioning Binance's inaction

Individual Investors AmyWang

In the last round of the bull market, there were at least small-cap projects with a market value of tens of millions or millions of dollars when they were listed. Binance users have a wealth-creating effect. At the same time, as a leading CEX, it has a great boost to the healthy development of the industry and can form a positive cycle. This round of VC coins currently looks like a re-creation of the Internet bubble in 2000. A large number of infrastructure projects without many actual users are listed at a price of one billion US dollars, and finally the exchange users pay for it. I sincerely hope that the new plan will support more small and medium-cap innovative projects as soon as possible, activate the potential new protocol ecology, and inject hope and confidence in positive development into the industry and the market.

Crypto KOL bit 壹

After the new project is listed on Binance, if the performance is not good. It is difficult for ordinary retail investors to make money. And Binance is still frequently listing high-market-value new coins. Ordinary retail investors have fewer and fewer opportunities to make money on Binance. Of course, you can say that whether the currency price performs well is the project party’s business. Binance is just a trading venue and does not intervene in the currency price. But it is undeniable that with the influence and traffic of Binance, the first currency exchange in the universe, Binance frequently lists coins, objectively speaking, it is undeniable that it will dilute a lot of attention and liquidity. Of course, you can also say that if these projects are not listed on Binance, they will also be listed elsewhere. Binance is just an exchange that provides transactions. But with Binance’s current status in the hearts of retail investors, Binance is not just an exchange. Of course, you can say that it is a moral kidnapping to control the speed of listing and take the responsibility of industry leadership. You are a businessman and should talk business, but you should not forget that a few months ago you wrote a letter to call on everyone to sign and call for CZ's judicial case. Everyone also took the initiative to jointly write letters and post videos for CZ's US judicial case. I still remember them vividly. If Binance was an unknown small exchange, I believe everyone would not bother it, but Binance is an exchange with most of the trading share in the currency circle. Such influence and every move have a great impact on the crypto circle. Everyone used to support Binance, CZ and Yijie. It was because Binance was a leading exchange with industry responsibility at that time.

Binance is now listing coins too frequently, and is delivering large-cap VC projects to the market in batches. The market liquidity simply cannot bear so many VCs worth billions or tens of billions. Is Binance listing coins in accordance with the spirit of profit first or the spirit of fairness first in cryptocurrency? Of course, as an exchange and a commercial company, it is normal to talk about profits, but as a leading cryptocurrency exchange native to the currency circle, it cannot only focus on profits, but should also correctly lead the direction of industry development and convey the spirit of crypto-nativeness. The large-cap VC-organized air coins listed in batches have diluted the originally limited liquidity. The VC projects with a valuation of billions of US dollars are listed online, but the activity on the chain is pitifully low. Is it because Binance's coin listing reputation system has collapsed, or has Binance's values collapsed after CZ left?

The truth that water can carry a boat but can also overturn it has been passed down from generation to generation in China. In the new cycle, the overall evaluation of Binance by the majority of users has taken a sharp turn for the worse. Binance should pay attention to it. The essence of an exchange is to serve a wide range of users to do transactions. However, the closer to capital, the farther away from users. Cryptocurrency-native exchanges should stand up and not become the white gloves of capital in the web2 world. Crypto retail investors cannot tolerate any sand in their eyes. "Duty" is the bottom line that Binance should stick to.

Other Views and Analysis

Founder of BixinGroup Starry Sky

A bunch of leeks questioned VC coins. In fact, they don't understand. If there is no VC to step on the mines in front, they will be the ones who face being cut. I have met many projects that skipped VCs and raised funds directly from KOLs, because they are easier to deceive and have their own traffic. The project parties have never encountered such a good leek. In fact, it is a normal strategy for VCs to follow the trend of venture capital, but it is hard for VC's LPs, who actually paid money. Ordinary leeks can still enjoy the pain of losing money, and LPs don't even know how they lost money.

VC is actually the weakest big leeks in this game. The big leeks don't cry out for injustice, but the platforms that charge handling fees and listing fees and have been making steady profits cry out for injustice. The world is really sinister. Think about it, if the employees of a big firm can get rich, where does their money come from? Isn't it all your money? The most important thing is VC's money.

Encryption KOL Chuanmu

Binance's strategy is difficult to break through. Binance joins forces with its own faction's institutions and project parties to set up a new coin harvesting, and enters the game as an investor to get chips. Then divide a part of the chips to BNB big holders to form a community of interests. Before listing the coin, free quotas are given to large and small kols to be responsible for publicity. Once there is a public opinion direction that is not favorable to Binance, the bnb big holders and kols who benefit from the new coin as a salary will collectively move out to reverse the public opinion. Either a new technical leader with leadership will come up with his own traffic to build a new transaction, free of handling fees, and mining the platform coin for a year through transactions and pending orders. Otherwise, it will be difficult to change all this, and there is no one who can break the game. Now retail investors are all piglets. Who lets others monopolize the market, with the largest trading volume and user base, and can only be harvested.

Crypto KOL Bit Fool

I have been in the crypto market for many years and have never taken money from Binance, so I can be objective. Binance's public relations should not treat the posts of Brother Sha as negative, because Brother Sha is objective and long-term thinking for the industry and Binance.

1. The ICO, DEFI era and IEO era summarized by Sister Yi are also eras of mud and sand.

In fact, there are a lot of pitfalls in ICO and Defi. At that time, the dividends were indeed more significant. But retail investors are also extremely prone to losses. As for IEO, the hit rate is very high. It is also difficult to get quotas for good projects. There are a large number of studios scrambling to win the lottery and the KYC industry chain. It is difficult for honest retail investors to make money. Retail investors are the most vulnerable group in any era and the group that needs the most protection.

2. Today, Binance's role is a multi-monopoly head platform that integrates multiple important roles such as exchanges, securities companies, China Securities Regulatory Commission, clearing and settlement institutions, primary market investment and mergers and acquisitions, and listed company groups. Please read this sentence carefully. In the traditional securities market, every role of Binance must be subject to strict supervision. Every role has the ability to do evil without supervision. Such a huge ability must correspond to huge industry responsibilities. What are these responsibilities? This is a question that Binance needs to think about, which is related to the long-term development of Binance.

3. CZ said that he is in Build. Binance's role is not a project party, but a multi-monopoly head platform that integrates multiple important roles such as exchanges, securities companies, China Securities Regulatory Commission, clearing and settlement institutions, primary market investment and mergers and acquisitions, and listed company groups. Binance is a role far beyond the project party, and its responsibility is not to build. In fact, Binance has never focused on building, but on maintaining its leading position in the exchange. The community has never expected Binance to build anything. A good referee is one who does not play the game himself.

4. The discussion between VC and LuMao Studio is just a small wave in the tide of history. VC provides funds for the primary market, which is an ancient industry. Studios make money by brushing orders and brushing data for project parties, which is also an ancient practice. But generally speaking, the securities market cracks down on VC's sudden investment and abnormal changes in equity before listing. The China Securities Regulatory Commission will also strictly investigate the data falsification of project parties. This crackdown and supervision puts multiple roles in balance. At present, VC coins are hated, and LuMao Studio and project parties are fighting each other. This is a rebalancing process. I hope that exchanges led by Binance will join this rebalancing process, sacrifice some of their own short-term interests, and allow the industry to develop more healthily.

We can discuss rationally, but we don’t want KOLs with Binance’s money to come and touch porcelain. You don’t care about retail investors or industry development, but only care about your own 400U. I am not as brave as you. Finally, I will end with Stephen Chow’s lines: The greater the ability, the greater the responsibility, you can’t avoid it.

Web3 Entrepreneurs Little People

This industry will not change, we can only change positions. Today, He Yi wrote that the ICO in 2017, the IEO in 2021, and even the strategy of 2023 are no longer suitable for the current market. As a whistleblower, she also reminds everyone that it is time to change the past logic of making money, which shows that this market has really reached a turning point.

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60. 61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73. 74. 75. 76. 77. 78. 79. 80. 81. 82. 83. 84. 85

2. What remains unchanged: Everyone is concerned about how the future will change. In fact, it is better to think more about which parameters of the industry will not change in the next five years. Then we only need to continue to polish these unchanging parameters so that we can have a first-mover advantage when new opportunities arise. For example, the four elements of the wool track are investment research--funds--technology--manpower. No matter how this track changes, these four elements are indispensable.

3. More and more effect: In addition to these four elements, there are also influence, ecological niche, circle, expertise, judgment, etc. What will not change in the future is that the greater your influence, the higher the right to distribute resources, and the more scarce resources will be inclined towards you. The higher your ecological niche, the closer you are to the source of information, and your winning rate will be higher than others for the same opportunity. The higher the quality of your circle, the faster you grow, and the better the resources you obtain.

4. Look inward: The same is true in Texas Hold'em. We should pay more attention to the quality of decision-making rather than winning or losing a game. As long as we add the weapon of time and continuously optimize the quality of our decision-making, the factors for decision-making are sufficient, and the winning rate is even a few points higher than others, the results will vary greatly in the long run. The core logic is to look inward, and don't pay attention to the parameters we can't control.

5. The evolutionary path will not change: If we observe the history of Internet development, we will find that in the past 20 years, the trend of class solidification will not change. 2% of people will have 98% of the right to allocate resources. For example, Tencent, even if it is the same person, joining after 2005, 2010, and 2018 will have completely different results. This will not be changed by your personal will.

6. Our industry will also follow this path, and the situation of class solidification has gradually emerged. What can we do as individuals? If we don’t want to be exploited as the bottom in the future, we must pay attention to our growth rate, which must be far higher than the industry average. We must accumulate our own influence, professional ability, and ecological niche, because the future trend is organization, and the deterministic long-term profits will be eaten up by professional organizations.

7. My current response strategy: light asset operation, which must comply with the anti-fragile model. The current stage is a turning point for the wool track and also a turning point for the industry. In the time window of the turning point, I will adopt a lighter way to operate the team and reduce operating costs. When a new "right breakthrough" point appears, I will continue to operate on a large scale. This is the more difficult stage in Texas Hold'em. You can't turn over your range no matter what. At this time, you must learn to wait and wait patiently for your range, but before this time point arrives, avoid consuming more gas, and the most important thing is not to leave the table.

8. The law of survival of the fittest in any industry will not change. What we can do is to change our position. The arbitrage opportunities in the crypto industry will always exist. What we have to do is to have chips on the table to bet when the opportunity comes.

Crypto KOL CryptoMaid 加密女少女

The era of arbitrage is over. People from different groups are not saying the same thing.

1. Ordinary users say: arbitrage can't make money anymore, the era is over

2. Investors say: they don't want to use their own investment money to pull up the initial circulation, forcing themselves to open short hedges to cover the project party's cash out.

3. The project owner said: relying on fake user data to fool investors, the era is over. The consensus has broken down. One of the problems is that the Ponzi property of this model is too low, and it eventually becomes a PvP cut, and no one takes over. Ponzi can make everyone rich on paper, and Ponzi can attract users outside the circle. Everyone knows that Edison tested more than a hundred materials and found tungsten filaments to make light bulbs. Few people know that he had already raised more than a dozen rounds before finding tungsten filaments. If he couldn't find tungsten filaments in the end, then all the more than a hundred experiments before that were Ponzi.

Investor Kay Capital

VC coins and high MC/FDV are the surface, and the deeper layer is the average cost of chips. If the average cost of a coin/stock is 1%-10% of the current price, it would be a miracle if there is a second wave of pull-up in the short to medium term. The average cost of VC coins after weighted unreleased chips is too low.

Crypto KOL Neso

After Binance, OKX and other first-tier exchanges were criticized for listing VC coins, they may accelerate the listing of small and medium-sized meme coins to win retail reputation and trading volume. Pay attention to the market value range between 100-500 million, the number of holders is more than 10,000, the community foundation is good, and the targets have been fully washed.

Crypto KOL PumpLUO

Many people question the high valuation and high unlocking of institutional VC coins. In fact, they are all led into a trap. The biggest damage to the market and the biggest meat of the exchange is the contract leverage! 1. Divert funds. 2. Separate liquidity. 3. Naked short behavior, contract trading and the issuance of derivatives that have nothing to do with coins. 4. Rapid consumption of retail funds (crazy opening of single-order strategy VIP policy attraction).