TechFlow news: MAP Protocol core developer James XYC posted that seed-round valuations for Web3 projects should not exceed $3 million. With the current industry lacking new capital inflows, inflated project valuations have become common. Founders should not apply traditional VC valuation standards to Web3 projects, as Web3 valuations remain excessively high.
Web3 development costs are relatively low—typically requiring only 3–5 people and costing between $80,000 and $200,000 to build a DApp. Yet some projects are valued at $200 million or even $50 billion, which is economically unjustifiable.
Community-driven issuance models like Bitcoin have succeeded because they align fundraising with community growth and do not rely on VCs. The TO VC model allows speculators to dominate the community; once bull markets end, VCs struggle to exit and project development stalls.
He believes Web3 projects should reconsider their valuation frameworks, learn from Bitcoin's success, and integrate funding with organic community development. The TO VC model may no longer be sustainable.
