Exploring the Development Trajectory and Future Trends of VC-led Projects

Recently, there has been a surge of projects in the crypto market led by large venture capital institutions, particularly concentrated in the Staking and CeDeFi fields. By analyzing typical cases such as Ethena, IO, and MSN, we can glimpse the rise and fall of VC-led projects:

Ethena, as an early representative, performed excellently in the VC round through high valuations and a strict whitelist mechanism. However, over time, the token price plummeted, and many investors were trapped. Although the IO project attracted attention with $30 million in funding, it was technically immature and had security vulnerabilities, ultimately falling victim to a hacker attack. MSN, on the other hand, attracted investment through extensive publicity but quickly lost momentum after going public, with the token value nearly dropping to zero.

There are also relatively successful cases such as EtherFi, Bouncebit, and Eigenlayer, but there is a serious homogenization. These projects often plan their listing platforms, execution teams, and exit paths from the very beginning, and then look for willing "carriers" VC for financing.

The current market is showing a bubble trend, mainly due to the good returns from the previous round of VC investments, which has resulted in a large influx of funds in this round. However, quality projects are scarce, and many high-valuation projects are struggling to meet expectations. Some investors are trying to profit through venture capital, further exacerbating the market chaos.

In terms of project types, idealism-driven projects are difficult to sustain; some projects rely entirely on capital operations, with founders resembling "puppets"; and there are projects that are planned from the outset on how to quickly profit and exit. However, there are indeed some quality projects in the market composed of top research teams, such as Zama and Fhenix, which focus on fully homomorphic encryption, as well as some projects invested by Paradigm. Although these types of projects may not attract widespread attention in the short term, they have great potential for long-term development.

There are significant differences in the investment philosophies of North American and Asian funds. North American funds are more willing to support "scientist" projects that may struggle to succeed in the short term but can drive the development of blockchain technology. In contrast, Asian funds place greater emphasis on practical results, focusing on how to gain more on-chain liquidity and market recognition.

For retail investors, it is recommended to focus on projects with excellent quality and long-term potential, such as some of the projects invested by Paradigm. At the same time, one can also consider participating in some high-profile projects, but it is necessary to adjust one's mindset and approach them from the perspective of the project party to profit together from VC.

Investors with a technical background are more likely to identify the authenticity of a project. Even if certain projects have potential issues, as long as they do not have a bad reputation and their fundamentals are acceptable, participation can still be considered.

The "Gold Miner Mine" theory reveals that there is no real gold mine in the market; most projects rely on the consumption of new users to sustain operations. In the current market environment, VC itself has become the main "human mine," and those who truly profit are the participants who "cut" VC along with the project parties.

For ordinary investors, it may be worth considering earning profits through "撸毛". The cost of "撸毛" is relatively low, and the risks are manageable; by implementing a reasonable diversification strategy, stable returns can be achieved. However, one should be cautious of projects with high valuations and low liquidity, and can assess token distribution by using a blockchain explorer.

Finally, Ethereum, as the "scientist chain", has rigorous technology and high security, making it an ideal project in the field of cryptocurrency. However, it should be noted that there is no direct correlation between the project's technical level and the token price.