The crypto circle is not maturing, but undergoing disorderly entropy increase
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The crypto circle is not maturing, but undergoing disorderly entropy increase
Liquidity is now just a joke
Navigating Web3 tides with focused insightsBy: jawor
Translation: AididiaoJP, Foresight News
When people face too many choices, they actually make fewer decisions. In a famous study, a table displaying 24 varieties of jam attracted a large crowd, yet almost no one bought any. What happened when the selection was reduced to six? Sales surged dramatically.
The paradox of complexity.
Now apply this paradox to cryptocurrency. We have over 20,000 listed tokens, and if we include all experiments, scam projects, memes, and abandoned sidechains, the total could reach fifty million. It's insane—casinos aren't just open, they're infinite. Infinite tables, infinite tokens, infinite meta-exhaustion.
The result? No one knows what to bet on anymore.
Retail stands no chance. Wallet user experience is a minefield. You bridge across chains, pay fees, forget to revoke approvals, and end up holding ten dead tokens. Most new users leave within 90 days. It’s brutal, but not surprising. We’ve intentionally made this difficult—not to protect value, but to chase it.
The deeper issue is that crypto no longer feels authentic. We talk about decentralization and financial freedom, yet every week brings a new Trump coin, another insider pump, another "influencer-led" rug pull. All while liquidity fragments, narratives cannibalize each other, and attention grows thinner.
This isn’t market maturation—it’s disorderly entropy.
Liquidity is now a joke
Even as capital flows in, it no longer drives markets like before. Why? Because funds are scattered across thousands of tokens. Everyone wants an "altcoin season," but there’s simply no room. Trying to inflate 1,000 balloons with a single breath is clearly impossible.
Take Axiom, for example—it has impressive technology, but it doesn’t generate new liquidity. Instead, it absorbs user capital without reinjecting it into the market. Or consider OTC deals that dilute supply but only appear on balance sheets when insiders decide to dump.
We’re building liquidity black holes, not flywheels.
When pools drain faster than they refill, you don’t just get price stagnation—you get market manipulation.
Manipulation has become cheap. Time-weighted average price games, oracle exploits, fake trading volume—it’s all effortless. Governance becomes a farce. Voter turnout drops, whales take everything, and sybil attackers farm with 30 wallets undetected.
It’s not just users who feel it—builders do too.
Teams burn millions launching the "next Layer 1," despite lacking product-market fit. Projects chase identical base concepts with minor variations. Composability breaks down because everyone optimizes for token price, not protocol stability. Volatile infrastructure kills innovation.
Core DeFi primitives used to be immutable—reliable foundations others could build upon. Now most protocols are upgradeable, prioritizing short-term revenue over reliability.
This creates a chain reaction:
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Builders can’t safely construct on top of infrastructure
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Liquidity becomes isolated
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Protocols turn into isolated fiefdoms
We’ve broken the money Lego set, and now we’re playing with loose bricks.
This is unsustainable
The vast majority of these tokens should never have existed. But in crypto, permissionless equals inevitable. Anyone can launch anything. You can’t stop it.
But perhaps we can shape the environment.
Centralized exchanges still act like value-neutral platforms. They delist tokens when trading volume dries up, not when teams vanish or ecosystems rot. That needs to change. Initiatives like @blockworksres’s Token Transparency Framework are a start, but imagine if multiple token rating agencies existed, and their average score influenced CEX listing/delisting decisions.
This isn’t censorship—it’s curation, and it’s urgently needed.
VC funding is drying up. Mid-tier projects can no longer easily raise rounds. Q2 2025 saw record M&A activity. Coinbase acquired Deribit and Echo. Stripe acquired Bridge. We’re talking billions in transactions. Why? Because the space has too many moving parts and too little utility.
That’s not noise—that’s consolidation.
Too many projects chasing the same idea? They get merged.
Too many tokens diluting the narrative? They get culled.
Too many chains with no appeal? They shut down.
Less noise, more signal.
Let’s build something worth believing in
Crypto needs belief again—not memes, not hope, not another locked token presale with a $300 million fully diluted valuation.
Belief doesn’t come from more. It comes from clarity, from a smaller surface area of things that actually work. From protocols that care more about products than pumps.
But we can build filters, not firewalls.
We can:
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Demand greater transparency from token issuers
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Push exchanges to delist tokens based on integrity, not revenue
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Create incentives for protocols to become composable again
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Reward builders who ship real products, not just narratives
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Prefer fewer, higher-conviction bets over endless "rotational churn"
The future isn’t about launching the next altcoin casino, but about creating systems people can trust—and want to stay in for more than 90 days.
Bull markets will return. They always do.
But next time, let’s not waste it on another thirty million tokens nobody needs.
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