What Makes a16z So Powerful, and Why Did ABCDE Shut Down
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What Makes a16z So Powerful, and Why Did ABCDE Shut Down
The West is responsible for concept distribution, the East for project development; the West for capital concentration, the East for providing liquidity.
Navigating Web3 tides with focused insightsBy Zuo Ye
The high risks and rich rewards of the Age of Exploration gave rise to modern finance—stocks and the corporate system both originated in this era. Through continuous short-term speculation, interwoven with centuries-long colonial expansion, today’s world was shaped and repeatedly invoked in the name of spirits to spur the growth of crypto.
Why A16Z Is Powerful and Why ABCDE Closed Down
Whenever a species spreads widely enough geographically, geographic variation occurs.
ABCDE was deeply burned by the BTC L2 sector, having invested $40 million over three years. Faced with diminishing prospects for higher returns, it has directly entered post-investment management mode (see previous article: "The Endgame Phase of Crypto VCs—What Did YZi Invest In?").
As early as 2023, some Chinese VCs began shifting to secondary markets or stopped raising new funds altogether, focusing instead on helping portfolio companies list on Binance, Gate.io, or MXC. Exiting even partially meant minimizing losses. Web3Port's pivot was correct—but unfortunately, it was too greedy.
Never try to grab the last penny; otherwise, you become the emotional target of collective backlash. Yet even Li Ka-shing, who coined this wisdom, has turned into a withered cucumber at the end of days. The allure of money does not bend to individual will.
A16Z thinks differently. In absolute return terms, long-horizon Silicon Valley VCs might not outperform their Chinese counterparts. But a16z raised $20 billion for AI alone, requires a minimum $500,000 investment in its startup accelerator (CSX), and has grown its overall Crypto fund to exceed $7.6 billion.
This is no longer mere variation—it has fused into the existing ecosystem, and even part of the future one.
Receiving investment and receiving an a16z investment are two entirely different things.
If we broaden our view, the crypto industry begins to reveal a clear pattern: the West issues concepts, the East develops projects; the West concentrates capital, the East provides liquidity.
Exchanges like Binance still command massive liquidity from Chinese-speaking communities. Bitget is known for its proprietary market-making operations. Yet why, across exchanges and VC layers alike, are we increasingly proud of “internationalization” while treating the Chinese-language market as secondary?
Caption: a16z American Dynamism, Image Source: a16z
In areas such as exchanges, stablecoins, and compliance, we continue to show signs of backwardness. Not spreading emotion—just sharing facts—we stand at a historical turning point.
What existed in Web2 intensifies in Web3.
After DeepSeek R1's transition from export to domestic adoption, traditional VCs that had gradually faded since the 2018 China tech stock downturn are now reviving. But we must all acknowledge: the model combining USD + BVI + VC + Chinese market is fading away.
More and more internet strategic investors are either going independent or shutting down. Local government industrial guidance funds increasingly favor "hard tech" and localized development. At the central level, planning focuses on future industries. State-owned financial enterprises prioritize policy alignment, preservation, and appreciation of value.
The reason for ABCDE’s decline—or rather, the retreat of the entire Chinese crypto VC landscape—is self-evident:
1. a16z can love America and the dollar. Startups funded in Silicon Valley inherently possess global reach—the DNA of new global information capitalism is embedded within them;
2. Chinese VCs cannot directly embrace the Chinese-speaking market. They can only compete by relying on Western prestige, selling access to Chinese-market liquidity against peers.
After A&T disbanded, major internet firms largely abandoned Web3. Local governments and SOEs talk about blockchain—but flinch at the mention of tokens, let alone investing or market-making. A few state-backed or private financial groups testing waters in Hong Kong and Singapore resemble strategic defense moves rather than genuine engagement.
The US dollar is a product. The American market serves as the frontline of the global market. Despite low fundraising barriers and enormous scale, a16z still sees vast profit potential relative to the broader global opportunity.
a16z can fail 1,000 times—until the next Meta or Google emerges.
Mobilization or Speculation: Where Is the Chinese Crypto Community Heading?
Neanderthals had beautiful stone tools—but were foolish craftsmen.
In Western history, finance has always been a mobilization tool. Behind Dutch tulip mania and the British South Sea Bubble lay the immense success of the Dutch and British East India Companies. Meanwhile, Spain and Portugal, clinging to royal monopolies, seized silver from the Americas but ultimately lost the world.
Their failure wasn't due to failing to channel silver into industry—but to lacking financial inclusion and societal participation. No single monarch's innovation could alter the nation's fate.
Each Generation, a New God
Chinese VCs are all alike. LPs demanding high returns quickly aren’t the problem—the real issue is the inability to meet those demands. a16z doesn’t solve this either. But YZi (formerly Binance Labs) favors trading-focused products—from DEXs to CEXs—including FTX.
Like Arthur Hayes’ family office Maelstrom, which cares little for market trends and follows its own aesthetic—demystifying everything while respecting innovators. Evidence shows Ethena-like and Delta-like products are becoming mainstream market choices.
Innovation rarely happens atop Twitter’s traffic peaks—it lives more often within individuals. Founders enduring countless hardships need more than money—they need big names, key figures, pivotal support. This pain isn’t easily understood by outsiders.
Assassins Revolt Against the Tech Lords
The future isn’t necessarily progressive. Major platforms increasingly trend toward becoming "lords" of the information age, blocking newcomers under the banner of technology and progress. Consider Blue Origin’s all-female spaceflight crew. Or Vitalik promoting RISC-V after transitioning to PoS. Even DAOs and foundations can’t stop individuals from wielding de facto influence.
We need new people, new paths of innovation.
Will technological singularity or surprise disruption come first? Hyperliquid may be elegant—but it hasn’t delivered a significant shock to Binance or USDT.
Speculation Isn’t Long-Termism
The reality today: we are token dumping grounds. We sit on the largest liquidity pools, yet remain helpless against Western VCs, policies, and exchanges—because money unites, but humans are inherently self-interested.
If someone claims to be a long-termist, remember: SBF loved eating vegan and preaching effective altruism. Of course, Movement Labs has already proven that being friends with Trump works better.
Speculation is speculation. Long-termism is long-termism. Speculators will never truly embrace long-termism.
Bitcoin has only existed for 17 years. Profiting from holding Bitcoin, profiting from encouraging others to hold and trade Bitcoin, versus profiting by swapping your own token for someone else’s Bitcoin—truth and falsehood here are obvious.
Long-termism resembles effective altruism: first, you must ensure your own survival until the promised outcome arrives.
Conclusion
Income is a series of events. Only when waves surge can heroes reveal their mettle.
Cultural traditions, like TVL, can become liabilities for project teams. Creditors simply wait for their options to vest. Projects attracting debt through junk clauses are no different from dead men in futures markets.
The imbalance between East and West resembles the distance from the Self-Strengthening Movement to Bitcoin—seemingly unrelated and far apart, yet the causal chain was set in motion the moment we first opened our eyes to the world.
The only question remains: Can this generation of Chinese crypto practitioners build global public goods from our local liquidity markets—conducting business across the world, profiting along the way?
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