When Even the HODLers Start to Dislike VC-Backed Projects: How to Break the Deadlock

By: blockbeats|2025/04/15 21:15:01
0
Share
copy
Original Author: haotian, Crypto Researcher

In the past few days, some new coins in the secondary market collectively experienced a pullback, seemingly reflecting the market's reaction to the current cycle of "Narrative first, Fundraising second, TGE later," a path of VC industrialized coin minting. It is worth pondering why retail investors are more willing to participate in high-risk P2P conspiracy coins on-chain but are reluctant to engage with VC-endorsed new coins. Here are my thoughts:

1) First and foremost, we must admit that the previous VC-led industry innovation-driven model has evolved into a "Funding, Coin Launch, Release" industrialized assembly line. For some time, the gorgeous whitepaper narrative + a top-tier luxurious investment lineup + seemingly glamorous large fundraising numbers + celebrity-level hype have become lethal liquidity harvesting tools that have severely eroded market trust.

While it is unfair to generalize, when a pile of projects that rarely fulfill their promises and have no wealth effect are pushed into the market, the market now irrationally equates VC projects with scams;

2) The main fatal flaw of VC coins lies in their pricing mechanism. After the project completes multiple rounds of fundraising, the valuation at TGE has already been inflated layer by layer, leading to two inevitable outcomes: first, retail buyers enter at a high cost; second, early investors have a strong selling incentive. This undoubtedly sets up a "death trap" for new coins. Following this logic, some projects are more likely to experience a downward trend post-TGE, which will in turn drag the market sentiment into a bearish direction, forming a vicious cycle.

In comparison, although community coins starting from zero on-chain with low market cap entail significant unknown risks, many retail investors are still reluctant to touch VC coins with high downward expectations and certainties;

3) A market environment facing liquidity depletion will inflict a more fatal blow to VC coins. Imagine this: when all participants know that front-running sell-offs post-TGE is the optimal strategy and shorting is the rational choice, all VC coins upon listing will face significant market sell-off challenges. In a scenario of overall market liquidity depletion, VC coins will likely become sacrificial objects.

This is akin to a "Prisoner's Dilemma" where generous airdrops from the project team will face selling pressure, and hoarding without releasing will face public criticism, ultimately leading to one conclusion: a lack of sufficient buying support;

4) It is clear to everyone that the trust crisis of VC coins needs to be addressed. How can this be resolved? The core issue lies in how to reconstruct the equilibrium of interests among project teams, VCs, and the community, for example:

1. Starting with a Low Valuation to Leave Room for Upside: The project team and VCs should accept a lower initial valuation, allowing the Token Generation Event (TGE) to be the true starting point of the project's value rather than the peak, providing the market with sufficient growth expectations. (Recently, many fundraisings were still substantial, indicating that the issue is far from being resolved.)

2. Decentralizing Some Aspects to Reduce VC Dominance: Introducing community participation in certain specific aspects through DAO governance, IDOs, fair distribution, and other means to decrease VC dominance in token allocation and increase community influence;

3. Differentiated Incentive Mechanisms: Additional incentives for long-term holders should be designed to truly reward participants and builders of the project ecosystem with value, rather than short-term speculators. This requires further enhancement and transformation of airdrop mechanisms;

4. Transparent Operations: Project teams should pick up the initial transparent accountability mechanism for regularly disclosing development progress and fund utilization, rather than solely engaging in one-sided market promotion before and after the TGE;

Above.

In fact, in the process of the maturation of the Crypto industry, VCs have made remarkable contributions. Discussing the changing colors of VC coins does not necessarily mean complete de-VC-ization. The industry cannot withstand another disaster if conspiracy groups run rampant behind an industry without VCs.

Currently, the fundraising ecosystem in the Crypto market still needs restructuring. VCs should transition from being passive "arbitrage intermediaries" to active "value enablers." Fundamentally, the dilemma of current VC coins can only reflect the market's excessive insularity. It is also a sign of the increasing maturity of the Crypto market, placing greater demands on ordinary investors on how to identify high-quality projects and make rational investments.

Original Article Link

You may also like

Anthropic's $1 trillion, compared to DeepSeek's $100 billion

The capital market has no faith, it only believes in the profit and loss statement.

Geopolitical Risk Persists, Is Bitcoin Becoming a Key Barometer?

Liquidity Still Unleashed, Which Force Will Dictate Pricing

Annualized 11.5%, Wall Street Buzzing: Is MicroStrategy's STRC Bitcoin's Savior or Destroyer?

25M Transaction Volume, 17,204 BTC

An Obscure Open Source AI Tool Alerted on Kelp DAO's $292 million Bug 12 Days Ago

AI Agent could potentially become an additional security layer for DeFi investors.

Mixin has launched USTD-margined perpetual contracts, bringing derivative trading into the chat scene.

The privacy-focused crypto wallet Mixin announced today the launch of its U-based perpetual contract (a derivative priced in USDT). Unlike traditional exchanges, Mixin has taken a new approach by "liberating" derivative trading from isolated matching engines and embedding it into the instant messaging environment.


Users can directly open positions within the app with leverage of up to 200x, while sharing positions, discussing strategies, and copy trading within private communities. Trading, social interaction, and asset management are integrated into the same interface.


Simplified Trading Experience: No KYC Required, Opening a Position in Five Steps


Based on its non-custodial architecture, Mixin has eliminated friction from the traditional onboarding process, allowing users to participate in perpetual contract trading without identity verification.


The trading process has been streamlined into five steps:

· Choose the trading asset

· Select long or short

· Input position size and leverage

· Confirm order details

· Confirm and open the position


The interface provides real-time visualization of price, position, and profit and loss (PnL), allowing users to complete trades without switching between multiple modules.


Social-Native Trading: Strategy and Execution Completed in the Same Context


Mixin has directly integrated social features into the derivative trading environment. Users can create private trading communities and interact around real-time positions:

· End-to-end encrypted private groups supporting up to 1024 members

· End-to-end encrypted voice communication

· One-click position sharing

· One-click trade copying


On the execution side, Mixin aggregates liquidity from multiple sources and accesses decentralized protocol and external market liquidity through a unified trading interface.


By combining social interaction with trade execution, Mixin enables users to collaborate, share, and execute trading strategies instantly within the same environment.


Referral Mechanism: Non-institutional users can receive up to 60% fee split


Mixin has also introduced a referral incentive system based on trading behavior:

· Users can join with an invite code

· Up to 60% of trading fees as referral rewards

· Incentive mechanism designed for long-term, sustainable earnings


This model aims to drive user-driven network expansion and organic growth.


Self-Custody Architecture and Built-in Privacy Mechanism


Mixin's derivative transactions are built on top of its existing self-custody wallet infrastructure, with core features including:


· Separation of transaction account and asset storage

· User full control over assets

· Platform does not custody user funds

· Built-in privacy mechanisms to reduce data exposure


The system aims to strike a balance between transaction efficiency, asset security, and privacy protection.


A New Path for On-Chain Derivatives


Against the background of perpetual contracts becoming a mainstream trading tool, Mixin is exploring a different development direction by lowering barriers, enhancing social and privacy attributes.


The platform does not only view transactions as execution actions but positions them as a networked activity: transactions have social attributes, strategies can be shared, and relationships between individuals also become part of the financial system.


Regulatory Background


Mixin's design is based on a user-initiated, user-controlled model. The platform neither custodies assets nor executes transactions on behalf of users.


This model aligns with a statement issued by the U.S. Securities and Exchange Commission (SEC) on April 13, 2026, titled "Staff Statement on Whether Partial User Interface Used in Preparing Cryptocurrency Securities Transactions May Require Broker-Dealer Registration."


The statement indicates that, under the premise where transactions are entirely initiated and controlled by users, non-custodial service providers that offer neutral interfaces may not need to register as broker-dealers or exchanges.


About Mixin


Mixin is a decentralized, self-custodial privacy wallet designed to provide secure and efficient digital asset management services.


Its core capabilities include:

· Aggregation: integrating multi-chain assets and routing between different transaction paths to simplify user operations

· High liquidity access: connecting to various liquidity sources, including decentralized protocols and external markets

· Decentralization: achieving full user control over assets without relying on custodial intermediaries

· Privacy protection: safeguarding assets and data through MPC, CryptoNote, and end-to-end encrypted communication


Mixin has been in operation for over 8 years, supporting over 40 blockchains and more than 10,000 assets, with a global user base exceeding 10 million and an on-chain self-custodied asset scale of over $1 billion.


$600 million stolen in 20 days, ushering in the era of AI hackers in the crypto world

Ethereum's biggest enemy is actually AI hackers

Popular coins

Latest Crypto News

Read more