If the user does not want VC coin or memes, then what does the user want?

Fu Shaoqing, SatoshiLab, Everything Island BTC Studio

1. Predecessor

Recently, the phenomenon of VC coins and memes has sparked extensive reflection within the industry. Many well-known figures have raised similar questions, striving to find solutions. For example, during a discussion on girlfriend coins hosted by He Yi, Jason( Chen Jian) raised the issue of how to address the problem of project teams selling coins and then lying flat when launching tokens on trading platforms. CZ's recent publication "A Crazy Idea for Token Issuance" also explores solutions to related issues.

All teams that genuinely work on projects hope that the market can reward true contributors, rather than allowing Ponzi schemes, scammers, and speculators to seize industry dividends and disrupt development.

This article will analyze VC coin and memes as case studies.

2. The Past and Present of VC Coin

The emergence of VC coins has its historical reasons. Although it seems imperfect now, it played an important role at the time, and many significant projects in the industry involved VC participation.

2.1 2017 ICO Chaos - A Dance of Demons

2017 was a key year for the explosion of ICOs in the blockchain field, with ICO financing exceeding $5 billion that year. The level of frenzy at that time could be described as "a chaotic dance of demons." As long as a project was going to conduct an ICO, with someone endorsing it and a well-written white paper, it would be immediately snapped up in a frenzy. People acted in a crazily irrational manner.

The main reasons for the explosion of ICOs include:

• The technology for issuing coins has matured, especially with the launch of Ethereum.
• Market Demand
• Initial popularization of the decentralized concept
• Give people beautiful expectations
• Low-threshold investment and other factors

Several classic cases occurred during this period:

1. Ethereum( Ethereum): ICO in 2014, now it has become the second largest project in the crypto world.

2. EOS: Raised nearly $4.3 billion through a year-long ICO in 2017, but later almost disappeared.

3. TRON: ICO in 2017, although controversial, developed rapidly and attracted a lot of attention.

4. Filecoin: The ICO raised over $250 million in 2017, attracting attention to the concept of distributed storage, but the healthy development of the project is in doubt.

The main issues exposed by ICOs:

• Lack of regulation, investors face high risks
• Market bubble, many projects lack real value
• Insufficient investor education makes it difficult to assess project quality.

2.2 The entry of VC and reputation endorsement

VC, through its own credibility and resources, provides more reliable support for projects, helping to reduce the issues arising from early ICOs. It also plays a role in screening projects for users.

The main function of VC:

1. The flaws of grassroots financing that replaces ICOs

• Reduce fraud risk through due diligence
• Standardize fund management
• Bind to the long-term value of the project

2. Empowering project ecosystem

• Import key resources
• Provide strategic guidance
• Credibility endorsement

3. Promote industry compliance

• Comply with regulatory requirements such as securities laws
• Adopt a compliant financing framework

VC plays an important role in the success of Web3 projects, helping them overcome many challenges faced during the early ICO through funding, resources, credibility, and guidance.

The issue of 2.3 VC coins.

With development, VC coins have also exposed some issues:

1. Conflict of interest: May lead to excessive tokenization of the project or prioritize serving its own portfolio.

2. Unable to solve the subsequent development issues of the project

3. Some project parties and VCs conspire to deceive retail investors

The main issue with VC coins is that after the project's launch, the team lacks continuous motivation for development, and both the VC and the project team might cash out and run away. Essentially, the project cannot be effectively supervised and managed, especially when funds and results do not match.

3. The Fairlaunch of Inscriptions and the Memecoin Phenomenon

The rise of inscription technology and the Fair Launch model in 2023, as well as the pumpfun model of memecoin in 2024, reveal some phenomena and issues.

3.1 The Outbreak of Inscription and Fairlaunch

In 2023, two major trends emerged: inscription technology and the Fair Launch model, reflecting users' pursuit of decentralization and fairness.

The main reason for the outbreak of inscriptions:

• Bitcoin ecological innovation demand
• Users' demand for censorship resistance and decentralization
• Low threshold and wealth effect
• Resistance against VC coin
• The appeal of fair launches

There are also some issues with the inscriptions:

• Pseudo-fairness
• Liquidity issues
• Value loss
• Lack of practical application scenarios

3.2 The Outbreak of Pumpfun and the Memecoin Phenomenon

In 2024, the Solana-based Pump.fun platform rapidly emerged as the core of memecoin issuance. The platform, through a complete token service process and speculative hype mechanism, had a significant impact on memecoins in 2024.

Pumpfun's main contribution is to create a complete closed loop consisting of Token issuance, liquidity pool construction, and DEX launch.

The main issue with memecoin:

1. Systemic fraud and trust collapse: A large number of tokens are scams, and the founders cash out in a short time.

2. False advertising is rampant: forged KOL platforms, trading volume, etc.

3. Market ecological distortion: occupying a large amount of on-chain resources, squeezing the development space for normal projects.

Memecoins have evolved from early entertainment functions to PVP( player versus player), then to PVB( player versus bots), and ultimately becoming a tool for a few experts to harvest retail investors. The lack of effective value injection is a serious problem.

4. What kind of projects do users or the market want?

By reviewing the history of Web3 project development, we summarize the main problems that currently exist:

1. The project needs to maintain ongoing motivation for development and should not allow a few individuals to gain substantial funds too early.

2. It is necessary to eliminate or reduce PVP to achieve a fairer issuance and reduce the space for manipulation by the house.

Solution:

1. Project Management: Limit the project party or VC from obtaining large amounts of funds too early, or use funds under regulation, allocating funds to the contributing team.

2. Continuous external value injection: Solve PVP issues, reward medium to long-term Token holders and builders.

4.1 Summary of Existing Issues

It is necessary to dynamically analyze the potential issues that may arise from the stakeholders in the project ecosystem, as well as the issuance, circulation, and governance at different stages of the project (.

) Management issues of different stakeholders and different stages of the project 4.2

1. Different stakeholders

The most relevant aspect related to interests in Web3 projects is the design of the economic model. Stakeholders generally include the project team, investors, foundations, users and the community, miners, exchanges, market makers, and so on. It is necessary to use the economic model to plan the Token allocation and incentives for different stakeholders at each stage.

2. Analyze issues from multiple aspects such as issuance, circulation, and governance.

###1( Token issuance The main purpose of issuing digital currency is to raise funds and distribute currency to users.

The circulation and management of ) Token It is necessary to manage Token liquidity by providing various applications, such as trading, Staking, member thresholds, application consumption, etc.

(3) The governance issues of the project Web3 projects achieve basic control through consensus mechanisms and economic model design. Community governance mechanisms complement the economic model.

The DAO and foundation model can better achieve fund and ecosystem management, providing flexibility and transparency. DAO management members should include key stakeholders and third-party institutions.

( 4.3 How to Build Long-term Projects ) Value Capture and Value Injection ###

Relying solely on the shouting model is difficult to sustain; it needs to be combined with technology and application innovation. Pumpfun provides a reference framework, but lacks the Token empowerment phase.

Value capture and external value injection are the two pillars of the Web3 economic model. The core challenge lies in balancing short-term incentives with long-term value, avoiding the pitfalls of "paper models" and Ponzi schemes.

5. Analysis of the Previous Two Crypto Bull Markets and the Possibility of the Next Explosion

( 5.1 The ICO frenzy of 2017

Main driving factors:

1. ICO Craze
2. Bitcoin Forks and Scaling Controversies
3. The Rise of Ethereum Smart Contract Ecosystem
4. Global Liquidity Easing and Regulatory Gaps

The bull market in 2017 laid the infrastructure for the industry, attracted technical talent and users, but also exposed issues such as ICO fraud and regulatory gaps.

![The user neither wants VC nor memes, so what does the user want?])https://img-cdn.gateio.im/webp-social/moments-19861252ec617cdccfe58c77155d3d90.webp###

( 5.2 DeFi Summer of 2021

Main driving factors:

1. The Explosion and Maturity of DeFi
2. NFT Breaking the Circle and Mainstreaming
3. Large-scale institutional capital influx
4. Global Macroeconomics and Monetary Policy
5. Mainstream societal acceptance improves
6. Multi-chain ecosystem competition and innovation
7. Memes and Community Culture

The bull market in 2021 drove the institutionalization, compliance, and technological diversification of cryptocurrencies, but also exposed issues such as DeFi hacking attacks and the bubble of NFTs.

![The user neither wants VC coin nor memes, so what does the user want?])https://img-cdn.gateio.im/webp-social/moments-989fa85ba3441a63e6ba34d7f3d206c7.webp###

( When will the next bull market be? 2025? What will the theme be?

Forecasting Potential Bull Market Drivers for 2025:

1. The Rise of Web3 Large-Scale Applications and User Sovereignty
2. Deep Integration of AI and Blockchain
3. Interoperability between global central bank digital currencies and stablecoins
4. The Revival of the Bitcoin Ecosystem and Layer 2 Innovations
5. The regulatory framework is clear and institutions are fully entering the market.
6. Geopolitical Conflicts and the De-dollarization Narrative
7. Meme Culture 3.0 and Community DAOization

Based on historical analysis and future predictions, the most likely driving factors for the bull market in 2025:

• Bitcoin ecosystem and Layer 2 innovation, based on new models generated by new asset issuance and trading.
• The integration of AI and Web3, AI-powered trading models

The specific timing of the bull market outbreak still needs to consider external environmental factors.

The above judgment is purely personal thinking and does not constitute any investment advice.

![The user neither wants VC nor memes, so what does the user want?])https://img-cdn.gateio.im/webp-social/moments-f4e8f48e1e7add5a808242fbb493cbf4.webp###