Summary: The debate between VC coins, exchanges, and individual investors reached a peak last weekend due to two lengthy articles by He Yi, co-founder of Binance. The release of the Lista DAO project token on the Binance Megadrop platform led to a decline in the market, sparking further dissatisfaction. He Yi’s articles highlighted the current state of the market, including the tension between individual investors, exchanges, and VC coins. Various industry insiders and experts shared their views on the matter, leading to a significant debate.
The recent market situation has been challenging for individual investors, and the constant listing of high-value new coins by Binance has further reduced the opportunity for individual investors to make profits. People are questioning Binance’s role in the market and urging the exchange to support small and medium-sized innovative projects to bring positive development to the industry and market.
The rapid rate at which Binance is listing new coins and the impact this has on the market’s liquidity has raised concerns about whether Binance is prioritizing profit over fairness and the original spirit of cryptocurrency. The market has shifted significantly, and Binance’s role and responsibilities as a leading exchange are being scrutinized by various industry participants.
Overall, the article discusses the recent market debate around VC coins, exchanges, and individual investors, highlighting the varying perspectives and concerns within the cryptocurrency industry.Creating a New Coin: Harvesting and Attracting Investors
In the world of cryptocurrency, there is a strategy known as creating a new coin to attract and harvest investors. The process involves offering a portion of chips to BNB (Binance Coin) holders, forming a community of shared interests. Additionally, free quotas are given to various Key Opinion Leaders (KOLs) for promotional purposes before the coin is listed. In the event of any negative public sentiment towards Binance, the BNB holders and KOLs, who benefit from the new coin, will collectively work to change the narrative. Alternatively, a new influential tech expert with a substantial following may emerge and establish a new exchange that offers free transactions, mining opportunities, and platform token rewards for a year. Without such developments, it is difficult to change the current situation, as there is a lack of individuals capable of breaking the current monopoly. Unfortunately, retail investors are the ones who suffer the most due to this monopoly, as they are left in a state of being exploited.
Cryptocurrency KOLs and the Foolishness of Bitcoin
Having been in the cryptocurrency market for many years, I have never received any money from Binance. Therefore, I can offer an objective perspective. Binance’s public relations team should not treat critical posts as negative feedback, as these posts represent objective, long-term thinking that benefits both the industry and Binance.
1. The ICO, DEFI, and IEO Eras Summarized by the First Sister
Both ICOs and DEFI projects had numerous pitfalls during their respective eras. While there were significant dividends to be gained, retail investors were also highly susceptible to losses. On the other hand, IEOs had a high success rate. However, it was challenging for retail investors to secure allocations, as many studios were involved in the process, resulting in a complex KYC chain. Honest and straightforward retail investors found it difficult to make money. Retail investors have always been the most vulnerable and in need of protection, regardless of the era.
2. Binance’s Multifaceted Role in the Industry
Binance’s current role combines various important positions, including exchange, brokerage, regulatory body, clearinghouse, primary market investment, and mergers and acquisitions. In traditional securities markets, each of these roles is subject to strict regulation. Without regulation, each role has the potential for misconduct. With such significant power comes immense industry responsibility. What are these responsibilities? This is a question Binance must contemplate, as it is crucial for their long-term development.
3. CZ’s Statement on Building
CZ claims that he is building. However, Binance’s role is not that of a project team but rather that of a multi-headed monopoly platform that combines the functions of an exchange, brokerage, regulatory body, clearinghouse, primary market investor, and a group of listed companies. Binance’s role extends far beyond that of a project team, and its primary focus has always been on maintaining its leading position as an exchange. The community has never expected Binance to build anything. A good referee, after all, should not participate in the game.
4. VC and Pump-and-Dump Studios: Ripples in History
VCs providing funds for the primary market and pump-and-dump studios manipulating data for project teams are well-established practices. However, in general, the securities market cracks down on VCs engaging in aggressive pre-listing investments and unusual changes in equity. Regulatory bodies also scrutinize data manipulation by project teams. The current backlash against VC coins, conflicts between pump-and-dump studios and project teams, is a process of rebalancing. It is hoped that Binance, as a leading exchange, will join this rebalancing process, sacrificing some short-term interests to promote healthier industry development.
A Rational Discussion from an Unbiased Perspective
While it is possible to engage in rational discussions, it is not desirable for KOLs who receive money from Binance to engage in opportunistic behavior. If one does not care about retail investors or industry development and only focuses on one’s personal gain, it is better to be brave like CZ. In conclusion, I would like to quote a line from a film by Stephen Chow: “With great power comes great responsibility, and you cannot avoid it.” – Web3 Entrepreneur, a Small Fish in the Sea
This industry will not change; we can only change our position within it. Today, He Yi’s article reminds us that the logic of making money in the past, using ICOs from 2017, IEOs from 2021, and pump-and-dump strategies from 2023, is no longer applicable to the current market. This indicates that the market has reached a turning point.
1. The Era of Pump-and-Dump is Over
The definition of pump-and-dump is broad. It is not just about mass registration to obtain chips; it is a mindset of continuously seeking arbitrage opportunities and scaling up in the market. The method of obtaining early-stage chips will change, but the concept of pump-and-dump will not disappear; it is just that the era of crude and mindless registration is gone.
2. What Remains the Same
While everyone is concerned about how the future will change, it is better to think about the parameters that will remain unchanged in the industry over the next five years. By focusing on these unchanging parameters and continuously refining them, we can gain a first-mover advantage when new opportunities arise. For example, the four elements of pump-and-dump tracks – research, funding, technology, and manpower – are essential regardless of how the landscape changes.
3. The Power of Influence
In addition to the four elements mentioned above, other factors such as influence, ecological position, community, expertise, and judgment will remain unchanged. The greater your influence, the higher your resource distribution rights, and scarce resources will gravitate towards you. The higher your ecological position, the closer you are to the source of information, giving you an advantage in the same opportunities. The higher the quality of your network, the faster your growth and the better resources you acquire.
4. Looking Inward
In poker, we should focus not just on winning or losing a single game but on the quality of our decision-making. By adding time as a weapon and continuously improving the quality of our decisions, making them based on sufficient reasons, even a slight increase in win rate compared to others can lead to significant differences in the long run. The core logic is to look inward and not focus on parameters we cannot control.
5. The Path of Evolution
If we observe the history of the internet’s development, we will find that over the past 20 years, the trend of class solidification has not changed. 2% of people will possess 98% of resource allocation rights, such as Tencent. Even for the same person, joining at different times – 2005, 2010, or 2018 – leads to completely different results. This will not change based on individual will.
6. Our industry will follow a similar path, and the trend of class solidification is gradually becoming apparent. To avoid being continuously exploited as a bottom layer, we must focus on our own growth rate, which should surpass the industry average. We need to accumulate influence, expertise, and an ecological position because future trends will be dominated by professional organizations, and long-term, certain profits will be consumed by them.
7. My Current Strategy
During this transitional phase in the pump-and-dump track, I will adopt a light asset operation model that aligns with the antifragile framework. At this stage, I will minimize operational costs by operating the team in a lightweight manner. When a new “right-side breakout” point appears, I will continue to scale up operations. This is similar to the challenging stage in poker, where no matter what hands you have, you cannot win. At this point, you need to learn to wait patiently for the range that belongs to you. But before that time comes, it is crucial not to waste any more gas and, most importantly, not to leave the table.
8. The Law of Survival in any Industry
The law of survival of the fittest remains unchanged in any industry, and all we can do is change our position. The arbitrage and pump-and-dump opportunities in this industry will always exist. Our goal is to have chips to bet when these opportunities arise. – Cryptocurrency KOL CryptoMaid
The End of the Pump-and-Dump Era: Different Perspectives
1. Ordinary users believe that the era of making money through pump-and-dump has ended, and the times have changed.
2. Investors argue that they are not willing to use their own investments to manipulate the market by boosting the initial circulating supply, forcing themselves to take short positions to cover project teams’ cash-outs.
3. Project teams claim that the era of using pump-and-dump tactics and manipulating user data to deceive investors has come to an end. The consensus has shattered. One problem is that this model has very limited side benefits and ultimately becomes a PvP game where no one wants to take the other side. The side benefits can make everyone paper-rich, attracting users from outside the circle. Edison is known for trying over a hundred different materials before finding tungsten wire to make light bulbs. Few people know that he had already gone through multiple funding rounds even before finding tungsten wire. If he had not found tungsten wire, all of the previous trials would have been in vain.
Venture Capital Coins and Average Cost of Chips
VC coins and high market capitalization-to-floatation distribution value ratios are surface-level indicators, while the average cost of chips is a deeper concern. If the average cost of a coin/stock is 1%-10% of its current price, a second round of price increases in the short to medium term would be considered a miracle. The weighted average cost of VC coins after the release of chips is too low.
Binance and Other Top-tier Exchanges Listing Mid-to-Small Market Cap Meme Coins
After facing criticism for listing VC coins, Binance, OKEx, and other top-tier exchanges may accelerate the listing of mid-to-small market cap meme coins to gain retail investors’ reputation and trading volume. It is worth paying attention to projects with market caps ranging from 100 million to 500 million, more than 10,000 holders, solid community foundations, and experienced thorough washouts.
The Harm of Leveraged Contracts and Current Strategies
Many people question the high valuation and unlocking of institutional VC coins, but they have fallen into a trap. The real harm to the market and the largest profit for exchanges lies in leveraged contracts. Leveraged contracts divert funds, separate liquidity, engage in naked short-selling behavior, and rapidly deplete retail investors’ funds through aggressive margin trading strategies and VIP policies.
