Crypto Distortion Chronicles: When "Selling Coins" Becomes the Only Business
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Crypto Distortion Chronicles: When "Selling Coins" Becomes the Only Business
The future may be bright, but the tunnel leading to that brightness will be long.
Navigating Web3 tides with focused insightsAuthor: XinGPT
After returning from Consensus Hong Kong, I’ve been meeting up with friends back home, their familiar laughter still echoing in my ears. The old crew remains active—KOLs, agencies, market makers, traders—the people are still here, the market hasn’t collapsed. Yet something has changed: the "spirit" of this market.
This is neither a bull nor a bear market. It’s not ruled by the familiar forces of greed or fear, but by an indescribable sense of "alienation"—an industry atmosphere unlike anything veteran players have ever experienced, as if stepping into a different era.
In this age, there's only one business left in crypto: selling tokens.
The Three Pillars: Creation, Discovery, and Distribution
At a high level, crypto has always operated on three wheels:
Value creation — Bitcoin, Ethereum, stablecoins, Layer2, DePIN, AI Agents—technological innovations that meet user needs and generate real utility.
Value discovery — VC investing, trading, and pricing mechanisms that identify promising assets, enable price discovery, and drive industry growth.
Value distribution — Market makers, agencies, media, KOLs building sales channels to help projects reach retail investors and complete the transition from primary to secondary markets.
These three should function like interlocking gears, forming a balanced ecosystem. But what we see today is this:
The first two are withering. The third is thriving.
Projects no longer focus on users or products. VCs no longer analyze trends or sectors. The entire market echoes a single question: “How do we sell the token?”
The Economics of Token Sales and the Resource Club
A healthy, rational market requires tight integration among all three components: projects build products, satisfy user needs, earn profits and valuation upside; primary and secondary institutions allocate capital—stepping in during downturns, exiting at peaks for returns; distribution players enhance capital efficiency by expanding market access.
Yet today, when you talk to people in crypto, no project teams or VCs discuss where innovation might still be possible, what kind of products could be built, or which user needs remain unmet. Even in H2 2024, when most VC-backed narratives had already been debunked, isolated hype around areas like AI Agents briefly reignited entrepreneurial interest.
Secondary market players are mostly flatlining. Altcoins peak upon listing. Meme coin liquidity has nearly dried up. BSC’s momentum still lacks staying power.
Under these conditions, the only active participants left are the third group: market makers (MM), agencies, and intermediaries. Their conversations revolve entirely around how to fabricate strong metrics or secure listings on top exchanges, how agencies orchestrate PR campaigns and drum up buying pressure, or how proactive market makers collude with buyer communities to dump more volume.
Market participants have become extremely homogeneous—all trying every trick to extract the increasingly scarce存量 capital within crypto.
As a result, top-tier resource holders—elite projects, major exchanges and their listing desks, powerful MMs and agencies—have formed an impenetrable cartel. The lifeblood of crypto flows one way: from LPs into VCs, then into top projects; the other end seeps in through retail investors’ capillaries in the secondary market, feeding this parasitic network, allowing it to grow ever larger.
The Disappearance of Founders
After FTX collapsed in 2022, crypto entered a dark period—Bitcoin dropped to 18,000, altcoins fell silent.
But unlike now, a significant amount of capital remained with VCs and large funds/traders—and crucially, that capital was productive. VCs funded startups, founders generated positive externalities, created value, and attracted new money.
Today, most capital is siphoned off by middlemen. Project teams care only about listing and flipping tokens, acting merely as intermediaries between VCs and secondary markets—no need for value creation, just craft an "empty shell" narrative. In traditional business logic, if downstream distribution captures most of the cost, upstream R&D and operations must be slashed.
Better yet, project teams simply abandon product development altogether. Allocate all funds to PR and exchange listings. After all, plenty of projects without products get listed anyway—and now PR can even be repackaged as "meme-driven." The less spent on product and tech, the more capital available for listings and price manipulation.
The crypto innovation path has devolved into:
"Tell a compelling story → Rapid packaging → Secure exchange listing → Cash out and exit."
Product? Users? Value? That’s romantic self-delusion.
Extraction Is Destiny
On the surface, everyone seems happy: project teams spend money on listings and price pumps, funds achieve exits, retail traders gain room to maneuver, and middlemen rake in massive fees.
But long-term, the loss of positive externalities means only intermediaries grow larger, eventually monopolizing the space and extracting ever-higher percentages.
Upstream, project teams cut R&D budgets. Regulatory pressure and fee extraction distort risk-reward ratios, forcing many to quit. Downstream, retail traders face increasingly brutal PvP battles—"always the bagholder"—losing faith as profit opportunities vanish, leading to mass exodus.
In essence, whether exchanges, MMs, agencies, or communities, these intermediaries are service providers. They don’t directly create value or positive externalities. When service providers and extractors become the dominant force in the market, the entire ecosystem becomes like a cancer patient—the tumor grows fatter while the host slowly starves.
The Power of Cycles and Post-Disaster Reconstruction
Crypto, ultimately, is a cyclical market.
Optimists believe that after this liquidity drought, a true "spring of value" will eventually emerge. Technological breakthroughs, new use cases, and innovative business models will rekindle entrepreneurial spirit. Innovation never dies; bubbles eventually burst. If there is a glimmer, let it be our lighthouse.
Pessimists argue the bubble hasn’t fully deflated—that crypto must endure an even deeper "avalanche reshuffle." Only when extractors run out of tokens to drain, and the intermediary-dominated structure collapses, can genuine rebuilding begin.
In between, practitioners must navigate a murky, muddy phase: doubt, infighting, burnout, existential crisis.
But this is the nature of markets—cycles are destiny, and bubbles are merely overtures.
The future may be bright—but the tunnel toward that light will be long.
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