Analyzing the Logic Behind VC Projects

Recently, a large number of VC-led projects have emerged in the market, especially in the fields of Staking and CeDeFi. The development trajectories of these projects can be analyzed through cases such as Ethena, IO, and MSN:

Ethena, as a typical VC-driven project, attracted investment through high valuations and strict whitelisting, but subsequently the token price plummeted. IO attracted significant attention after announcing a $30 million financing round, but immature technology led to a hacker attack. MSN attracted investment through extensive promotion, but quickly lost momentum after listing, with token value nearly reaching zero.

There are also relatively successful VC projects such as EtherFi, Bouncebit, and Eigenlayer, but there is a serious homogenization. These projects often have predetermined trading platforms, teams, and exit plans, with the technical aspects mostly outsourced, resulting in generally poor quality.

The current financing frenzy has led to market bubbles, making it difficult for overvalued projects to meet expectations. A large influx of funds has resulted in the expansion of VC institutions, but high-quality projects are scarce. Some projects have been assigned valuations far exceeding their actual value, making it hard to match market performance.

The project teams are diverse: there are young entrepreneurs with idealistic aspirations who struggle to sustain; there are "puppet" founders pushed to the forefront, relying on capital manipulation; and there are projects composed of top research teams, such as Zama and Fhenix, which focus on long-term technological innovation in the field of fully homomorphic encryption.

North American funds tend to support technology-oriented long-term projects, while Asian funds focus more on market effectiveness. Outstanding projects, such as those invested in by Paradigm, often have long-term potential. Retail investors need to change their mindset and profit from VC together with the project parties.

Having a technical background and information channels helps to identify the authenticity of a project. Even if there are potential issues with the project, it can be assessed based on fundamentals to determine whether it is acceptable.

The "mining of people" theory reveals that the market lacks real gold mines, and projects rely on new users for consumption. Currently, the "mining of people" in the market is primarily the VC itself, and the real profits are made by participants who profit from the VC together with the project parties.

The cost of hair pulling is low, and the risks are controllable. Steady returns can be obtained through airdrops and staking diversification strategies. Be wary of high valuation and low circulation projects; you can assess project quality by checking token distribution through a blockchain explorer.

ETH technology is rigorous and highly secure, making it suitable as an ideal project, but there is no direct correlation between technology and coin price.