Founder of IOSG Ventures: The industry calls for real users and new funds, and Ethereum cannot just talk about feelings and ideals
Written by: Jocy Lin, Founder of IOSG Ventures
The scale of the Token2049 exhibition has taken shape, with twice as many people as last year, exceeding 20,000. Even Grab drivers lamented that the number of people attending crypto events this week seemed to exceed the number of tourists coming to watch the F1 race. In many activities, overseas audiences and speakers accounted for more than half. There is no doubt that this exhibition may become the most successful and the most popular in the history of Token2049.make moneyThe first session.
Why are American GP and "king-level" projects pouring in?
Why do so many American GPs come to Asia? Why do so many "king-level" projects come from afar? Because there is a source of fresh water. Faced with a tight market environment, many top GPs and projects have also come to Asia, hoping to use Asia toCommunityThe financing target can be achieved. During this week, many LPs were able to meet with three US GPs on average every day. We have also seen that the size of the new phase of the PM Fund has been reduced to US$800 million, and the fundraising target of another P Fund has been reduced from US$800 million to US$200 million. The initial fundraising of the D Fund is also expected to be set at US$250 million. This is enough to show that global crypto funds are facing a new round of financing difficulties: due to the poor performance of DPI in the previous cycle, the size of funds has generally shrunk, and LPs have become more cautious. LPs are affecting the VC GP market. The VC market is more stringent in requiring and selecting early entrepreneurs, and the problem of entrepreneurs' financing difficulties has become more prominent. At the same time, Binance and otherexchangeThe requirements for listings will also be further improved.
Funds that have been making rapid progress in the first half of this year (some of them have achieved three valuations in the same round of financing) have basically been asked by LPs to reflect on themselves in the recent cycle. Funds and large investors who were crazy about buying OTC/doing secondary transactions at the beginning of the year have begun to doubt this industry. The volatility and reflexivity of the crypto industry are awe-inspiring. The financing market is getting worse, even very bad, and most of the active investment deals only occur in low valuations and new directions.
Valuation inXiaobai Navigation Projects with a length of about 100m and that have not yet completed TGE have given up due to the high difficulty.Binanceplans. Infra with a valuation of 300m to 500m is still struggling to raise funds (basically, it can be said that it is open to all investors). For projects that have completed TGE, if the initial launch strategy is not good, the FDV has fallen by an average of 80% compared to the last round of VC valuation.BinanceProjects with liquidity are still looking forward to a turnaround in the bull market, while projects not listed on Binance have already begun planning new projects or the next stage of work.
Industry confidence is severely damaged and innovation support is at risk
In this industry, everyone is busy, some are making false data and income fraudexchangeand investors, some in technologyCommunityAcademic discussions have been going on for a long time, but people have forgotten that good infrastructure is to gain applications and users. Exchanges have become the biggest winners because of their good revenue model, providing the best working environment and income level in the short term, but making it more difficult for startups to obtain outstanding talents. This is a bit like the prosperity of the 2049 conference. In the midst of prosperity, few people are discussing how to gain real users and income, as well as a stable and sustainable business model.
The performance of altcoins may be worse than expected, forcing industry participants to re-examine innovation and real application cases. The interests of VCs, exchanges, project owners, and retail investors are inconsistent, and all participants have become the party hurt by the market. There is no trust and cooperation between the four parties. Without reform, they will only go into a dead end and will not be able to attract new money and talents/users. Even if Bitcoin succeeds, the entire Web3 industry will still fail.
Here I advocateTokenPracticality and adjustment of unlocking terms. Traditional IPO investment lock-up period only requires 6 months to one year.crypto For investments in ultra-early seed round companies, the overall liquidity lock-in period is 3-4 years.TokenThere is no utility. In the first half year after the exchange goes online, there are market makers willing to make markets and adjust prices, but after that, no one on the project side/exchange cares about the price, and no one is responsible for VCs and retail investors who buy in the secondary market. After countless injuries and losses, more people’s support and confidence in innovation will be greatly damaged.
If everyone is deceiving themselves and expecting a big bull market rebound, but does not think about what kind of application scenarios will allow real users to enter, they will fall into a situation of eating up all the resources. People who enjoy the early dividends of the industry do not understand the suffering of the world. The largest 16-letter fund in the United States is a school of its own. The 10-year cycle of 10 billion US dollars allows them to live well without cooperating with any institutions/market forces, while most successful founders do not care about young entrepreneurs who are the same as they were 5/10 years ago. However, the industry is in a difficult stage, and we need these successful forces to point out the direction and bring faith to everyone, so that more people can persist and see the dawn of the next bull market.
Where should Ethereum go from here?
Ethereum is experiencing an unprecedented level of doubt. Since the launch of the ETF, it has been selling more than 1.2 billion US dollars in net funds, from Ethereum core researchers/EF to developers.CommunityOrganizations, and then to Consensys-related commercial companies and external investors, a huge crisis of trust is emerging. Vitalik needs to better point out the direction and goals for different participants, because Ethereum is already a very large decentralized commercial entity in the entire crypto market and even the traditional market. There has never been such a commercial entity in history. The test for the entire Ethereum community and Vitalik will continue to become more and more severe, even to the point where there is no way to build without breaking. After "The Merge" switched to PoS, due to the significant reduction in ETH issuance and the existence of the burning mechanism, Ethereum actually entered a 20-month deflationary cycle. Due to the sluggish L1 transactions in the past few months, the gas price of L1 has been in the single digit for a long time, causing ETH to return to the inflationary trend, and the total supply may return to the level of "The Merge" in the near future.
About 5 years ago, when we visited the official website of Ethereum, we could see a list of several other L1 competitors at the end, which allowed everyone to understand the shortcomings or problems of Ethereum in a completely open, transparent and comparative manner. Ethereum is now more powerful than ever before, but how to make this network more open and diversified is an issue that we urgently need to solve.
Emphasizing its position, IOSG continues to be optimistic about Ethereum in its investment strategy. We have not found a more successful technology ecosystem than Ethereum. The TVL of the overall Ethereum ecosystem has increased from about $34b a year ago to $88b, with a growth rate of 159.5%; this significant growth further demonstrates the possibility of Ethereum promoting new innovative projects in the future.
The crypto industry needs to return to actual application scenarios and avoid false prosperity
The latest metamask monthly active user data shows that it has dropped from 30 million at the peak of the bull market to 1 million, marking a significant decline. EVM-compatible L1/L2The user activity of the chain has also dropped by more than 50%. This dispersion of liquidity has led to a wide dispersion of applications, developers (asset issuers), and users. Developers and users are rapidly flowing to chains with subsidies and memes. L2 The liquidity between them is too fragmented, and high-performance chains do not bring high-performance applications.
The real user scale brought by airdrops and incentives is relatively limited, and people have begun to dislike the airdrop customer acquisition strategy. A third-party study shows that the user churn rate after the airdrop is as high as 80%, which is not good for founders and projects. Take Friendtech as an example. This was a relatively influential and eye-catching project in the market before, but after the subsequent token launch and the lack of price maintenance, all users are abandoning this application. The restaking track has also encountered a similar bottleneck. After the airdrop, TVL evacuated or switched to a new protocol.
西方基金对 Ton 和 Web2平台并不乐观和看好，大家认为俄罗斯和 Ton 链仍然有一些底层问题，不看好但是并没有回答投资/不投资的问题。不不过显而易见的是在这个困难的周期，Ton 给加密市场带来了新的活力，9亿月活的telegram用户中大概有300万真正游戏玩家，每个 Ton 用户的获客成本在0.7美金，后续大概率 Ton 从 Web2给 Web3带来新用户的模式，也会被用到新 L1/L2的 增长中，可以预期这些平台会专门给出一个预算来补贴这部分的用户增长。同时也可以看到一个机会，美国在加密金融 ETF 战略部署完成之后，会开始考虑让科技公司的应用接入和渗透web3, a one-stop experience in which users are unaware of the chain will become the new standard.
We talked to several game funds in the gaming sector, including Bitkraft and Makers Fund, which switched from Web2 to Web3. Their positions and performance in Web3 were not as good as expected. Compared with the more mature Web2 gaming industry, they are still more willing to raise new Web3 funds from LPs and still look forward to the development of the Web3 industry.web3Emerging game paradigm. The game track has become extremely difficult. Participants with long-term vision are thinking about what's next after listing. Most funds that originally invested in crypto games have a harder time. In the past two years, 90% gamefi The project broke down after listing (compared with the last round of VC investment valuation), it seems that 3A games/full-chain games/Degen game community platforms are all being abandoned by retail investors. Of course, Pirate Nation, which Paradigm invested in at the beginning of the year, and Small Brain, which just completed financing recently, still have a good community foundation. The game track has become extremely difficult, and all participants are losing confidence. Crypto games force participants to leave or make more innovative products and fun games in a more difficult mode. Of course, we are still looking for people who have faith in the game and are interested in it. crypto A team with consensus in the market.
This time, I talked with the person in charge of listing at a leading exchange and learned that their biggest principle and consensus within the exchange is to find long-term entrepreneurs. In the past, some founders who had faked data listed on exchanges chose to cash out and stay put after the successful launch, leaving a pile of debts to the community. Entrepreneurs with long-term concepts are committed to growth and finding more reliable, effective and sustainable business scenarios at any stage.
At the same time, in this 2049, we also saw more changes from traditional AI Founder of Web3 startup.
@gensynai and@hyperbolic_labs represents computing, and@SchellingAI代表的Web2类型 All in 选手，还有 http://Title.xyz 这种致力于做 Midjourney 艺术风格的图片/视频生成模型，AI+Consumer+DePin 正在成为行业基金积极下注的新赛道。更多的人才一定会给行业带来更好的用力和增长，Stay optimistic and Move Forward positively!
I hereby call on more successful people who have benefited from the industry to pay more attention to the root problems currently encountered in this industry, support the construction of public goods, and create a better business innovation environment for these long-term entrepreneurs. IOSG will take the lead in setting an example and provide support from 0 to 1 for early entrepreneurs in the industry. It will also continue to reflect on and iterate its investment thesis, and guide entrepreneurs to think about new business models and ways to acquire customers.
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