The era of "picking up money" is over, and it will become increasingly difficult for retail investors to profit from crypto assets such as Bitcoin.
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The era of "picking up money" is over, and it will become increasingly difficult for retail investors to profit from crypto assets such as Bitcoin.
Do retail investors still have opportunities in the crypto market?
Navigating Web3 tides with focused insightsBy Terry
In the past year, have you encountered a rug pull project? Have you experienced "buying at the peak" due to hype from KOLs promoting a token? Or suffered losses from increasingly rampant phishing attacks? Perhaps you bought a newly listed token on a top-tier platform only to watch it decline continuously?
Many users likely resonate with at least one of these scenarios. Indeed, this probably reflects the investment experiences and true sentiments of most ordinary investors over the recent period:
Whether it's blockchain security issues or asset depreciation, users often find themselves defenseless. Many pitfalls that were once common are now becoming industrialized—put bluntly, they’re uprooting even the “weeds’ roots.”
This article reviews the increasingly sophisticated traps emerging in the crypto world today and examines whether there are still profitable opportunities for ordinary users in the cryptocurrency industry.
Ordinary Users’ Creative Ways to Lose Money
1) The Industrialization Trend of Rug Pulls
Rug pulls are becoming increasingly sophisticated. The most outrageous example is ZKasino:
On April 20, community users discovered via Wayback Machine’s historical records that ZKasino had removed the sentence “Ethereum will be returned and can be bridged back at this point” from its official Bridge interface.
At the same time, users were unable to withdraw funds, the official Telegram group was muted by admins, and social media updates ceased. The total amount stolen exceeded $20 million.
Interestingly, just one month earlier in March, ZKasino had announced it raised Series A funding at a $350 million valuation, with undisclosed amounts and participation from several exchanges and VCs…
Additionally, zkSync, jokingly dubbed the “Rug Chain,” has not only seen frequent security incidents among its ecosystem projects but also shows an increasingly clear trend of quickly capitalizing on hype and rapidly executing exit strategies. For instance, recently a DEX named Merlin on zkSync (unrelated to the Merlin network) executed a rug pull, affecting over a million dollars.
We must reiterate that many projects within the zkSync ecosystem vary greatly in quality. While exploring zkSync’s ecosystem, users should remain vigilant and guard against risks at all levels.
2) Escalating Hacker and Phishing Attacks
One of the most eye-catching cases in blockchain security lately is the now-familiar “first-and-last-digit matching phishing attack”:
A whale address fell victim to a first-and-last-digit matching phishing attack, losing 1,155 WBTC—over $400 million! Although the hacker later returned the funds under various pressures, this incident highlighted the extremely high risk-reward ratio of such phishing schemes—“rarely open for business, but when they do, they feast for life.”
Moreover, similar phishing attacks have become industrialized over the past six months—hackers generate massive numbers of blockchain addresses with varying first and last digits as a seed database. Once an address conducts a transaction, attackers immediately search their seed pool for a matching first-and-last-digit address and execute a linked transfer via smart contract, casting a wide net and waiting for victims.
Some users copy target addresses directly from transaction histories and only verify the first and last few digits, making them vulnerable. As SlowMist founder Yu Xian noted, “Hackers play a game of casting nets—willing victims get hooked; it’s all probability.”
This is merely a snapshot of the escalating hacker threats. For ordinary users, both visible and invisible risks in the colorful blockchain world are increasing exponentially, while individual risk awareness struggles to keep pace.
Overall, attacks on blockchains, wallets, DeFi, and social engineering are proliferating, turning DeFi security risks into asymmetric, one-sided hunts: for technical geniuses, it’s an endless free ATM; for most ordinary users, it’s more like a Damocles sword hanging unpredictably overhead—staying alert and avoiding random authorizations helps, but luck plays a big role too.
To date, phishing and social engineering attacks targeting end-users remain the most common causes of fund loss in Web3, and the problem is worsening due to additional risks posed by smart contracts.
Behind every successful scam, there’s a user who stops using Web3. Without new users, the Web3 ecosystem goes nowhere—this is one of the most damaging aspects for the crypto industry.
3) KOL Hype Tactics
For most ordinary users, following crypto KOLs’ social media promotions is a key source of alpha.
This has given rise to the concept of a “KOL Round”—as influencers with greater sway over retail investors, KOLs sometimes receive shorter lock-up periods and deeper valuation discounts than institutional VCs:
For example, Monad Labs recently completed a funding round at a $3 billion valuation, and insiders revealed some well-known KOLs were allowed to invest at up to one-fifth of Paradigm’s valuation.
But does following KOL calls guarantee profits? Researchers from Harvard and other institutions analyzed around 36,000 tweets mentioning crypto assets by 180 prominent crypto social media influencers (KOLs), covering over 1,600 tokens, yielding disappointing results:
On average, tokens promoted by KOLs yielded 1.83% (1.57%) returns after one (two) days. For projects outside the top 100 market cap, post-hype returns reached 3.86%, but gains began sharply declining five days after the tweet, with average returns from day two to five at -1.02%. This indicates over half the initial price surge vanishes within five trading days.
4) VC Tokens Plummet After Launch
Given a choice between a high-FDV (fully diluted valuation), low-circulating-supply VC token and a pure “meme coin” where you bear full profit and loss responsibility—which would you pick?
Market trends have begun shifting, with meme coins surging and driving extreme transaction activity on Solana and Base chains. PEPE, now firmly established as the leading memecoin, has hit new highs. Beyond short-term speculation, the broader public’s call for fairness symbolized by memes is gaining momentum—capital is voting with its feet.
In contrast, a string of high-FDV VC tokens launched on major platforms have seen continuous declines. Notable examples include AEVO, REZ, and even BB, the token of BounceBit—the first project in BN Megadrop—all closing nearly every day in red since launch, leaving early buyers deeply underwater.
This stark contrast has reignited community debates about memecoins versus VC-backed tokens. At least memecoins bring user traffic, sustained inflows of new capital, and attention, whereas recent multi-billion-dollar projects often repackaged grand narratives or outdated concepts, inevitably drawing community backlash. This serves as a wake-up call for VCs and project teams accustomed to path dependency.
Where Do Ordinary Users Go From Here?
As previously discussed in “Web3 Never Sleeps: Will the ‘Blossoms Era’ of Crypto Last Forever?”, “It’s not *Blossoms* we love, but the era of abundant opportunities.”
We believe many in the crypto space have imagined: if we could go back ten years, how would we ride that wave of the times?
Buy BTC? Become a miner? Found another Bitmain? Join Binance as an early employee? The best choices seem endless—after all, the past decade of wild crypto innovation truly was a golden age beyond imagination, spawning waves of legends and industry icons.
Regardless, profitability remains an eternal topic and the lifeline of Web3’s development.
When exchanges, market makers, VCs, project teams, and KOLs are all profiting while the majority of ordinary users keep losing money, it signals deep structural distortions in the market that cannot last.
Once again, behind each “creative way to lose money,” some users may abandon Web3 products and shun VC tokens, embracing instead fairer, grassroots-driven memecoins—a form of capital rebelling through foot voting.
Until certain Web3 applications truly achieve closed-loop value creation, ordinary users will remain “nowhere to go.” Perhaps this is an inevitable detour in Web3’s evolution—yet the industry continues to move forward through experimentation.
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