Blockchain Revolution or Blockchain Scam? An overview of the current crypto market at a glance


The last double bull cycle of 2020 and 2021 is characterized by the dominance of “narratives”, a new outstanding project token is determined by the quality of their marketing and memes, trading companies turn to VCs in the first part, the second part Anonymous influencers dominated the traditional VC market in 2017.

We have seen from DeFi, NFT, DAO, L2 (layer 2), earning Metaverse while playing, to Web3, and then back to NFT, the L1 (first layer mainnet) war spanned the last 5 common narratives. The crypto space is seizing new narratives to justify the deployment of new capital to satisfy investors’ appetite for outsized returns, early returns are fundamentally possible, but now only by reducing complex capital, Act as each former holder gradually exits liquidity.

Many years ago, I would have considered it a shame to misallocate unproductive capital, predatory extraction of stimulus checks from TikTok users who dreamed of getting rich, to escape the day-to-day monotony. Every industry has low-level employees, and today, I think very differently. I see each bull cycle as an incarnation of a natural life cycle in the animal kingdom, where we have a greedy food chain eaten by our slightly smarter but equally greedy selves. Ugly but inevitable, I now believe in crypto accelerationism.

For years, we have been unable to make progress in the industry from logic, reasoning, or any form of oral dialectics. We can only learn by witnessing the results of most experiments that are doomed to fail (though some do succeed, at least for now). The debate between small blocks and large blocks, PoW and PoS, this PoS and that PoS, this L1 and that L1, L1 and L2, (3,3) and (-3,-3), Punks and Apes, DOGE and SHIB , CLOB vs AMM etc, can’t be resolved without actually seeing how they behave in reality.

No amount of theory about mechanism design, drawing models and directions, using historical analogies, or hardcore writing can convince a community to give up their holy cow to join another industry. As an industry, we have to viscerally experience the good and the bad, what works and what doesn’t, until it becomes embedded in our zeitgeist and forms our collective memory, and then we can move on.

The introduction of jargon is an interesting development in crypto culture, where it serves a dual purpose in traditionally protected and supply-constrained fields such as medicine and law.

First, it saves time when both communicating parties share a library of understanding languages. Second, it prevents outsiders from easily extracting values ​​that “rightly” belong to insiders. In cryptocurrencies, this is no different. As we become a wealthier industry, we further disguise ourselves in internal terms so that dirty outsiders can’t come and eat our lunch. This should spark more M&A activity as non-crypto companies with no in-house expertise look to penetrate this lucrative but very hard-to-penetrate space. I’m not making a canonical judgement here whether it’s good or bad, it’s natural.

Capital allocation always lags the emergence of new things and innovations, and in the course of the bull market cycle, more and more capital chases lower and lower quality projects. Entrepreneurs and scammers alike are more than happy to start new half-baked ideas, creating supply to meet demand for new fiat currencies (new users) that are about to enter the space.

It is when the anti-narrative naked emperor fears the backlash from hornets and sacks, and people begin to censor themselves to the greatest extent, that this narrative achieves its greatest upward reflexivity. At the height of the frenzy, people only buy what they think can change hands to the next marginal buyer; valuations become absurd, and common sense is overwhelmed by waves of tribal chants and rain dances, driving prices up. If it weren’t for a macro-environmental turn, we might have reached more absurd heights, and the mania has not yet reached its natural peak.

As the tide turned, the “narrative” was weakened, both in crypto and beyond our shores, and many projects were revealed to be scams at best; downright scams at worst. When madness becomes the rule, nuance and careful consideration can be labeled heretical. Only after the “narrative” has weakened can these ideas be published without being policed ​​for wrong ideas.

Currently, fungible tokens are still a bit too plentiful for the industry and market pricing seems reasonable. The Fed rate hike rhetoric was initially dismissed as not entirely credible, but is now believed and priced in by most. A further new development in Fed hawkishness led to a small dip that was quickly bought. It looks like 4 or 5 rate hikes this year, no more, no less, at least in current expectations. Speculative alternatives to major assets like BTC and ETH pulled back, but not as badly as in 2018. Most of the third or fourth big money that crypto VCs raise will likely go to new projects rather than the old ones they’ve always had. Capital may get 10x or 100x from new projects if macro improves, but old projects may not get the same order of growth from here.

Deception and Utopianism

I’ve been thinking lately about two new dimensions in which we can classify various ciphers: hoaxes and utopianism. For example, in the scam dimension, I think OHM is less severe than TIME, and TIME is less severe than OHM forks. Now I’m not making any absolute claims about how rough each item is, just relative that they can be reasonably ordered this way.In general, the rule is that the copy is rougher than the original. In the dimension of utopianism, an example is that BTC is not as utopian as ETH, and ETH is not as utopian as SOL, LUNA, AVAX and other new L1s. Generally speaking, the rules are that new projects try to “solve” problems inherent in old projects and are therefore more utopian. Now that we understand these dimensions, we can talk about investability, rate of return, and consideration time for each of the 4 items:

1) vulgar, low utopianism.

2) vulgar, high utopia.

3) High pomp, low utopianism.

4) High difficulty; a high degree of utopianism.


1 project (low-end scam, low-utopianism)

1 means the project is an honest effort to solve a solvable problem without some fundamental scientific or technological breakthrough. Examples are (past) cryptocurrency exchanges, new cryptocurrency infrastructure, and possibly some early successful cryptocurrencies like BTC. These tend to be good long-term investments while being considered inappropriate for the short-term, especially during the manic phase of a bull market.

2 projects (low-end scam, high-utopianism)

2 stands for projects that honestly strive to build grand designs to guide us into a brave new world. These designs often require at least one but sometimes multiple technological breakthroughs to work. You will often find proponents of these projects bashing and discarding projects in project 1 because it’s not enough to justify why their project 2 was necessary in the first place.

Utopia is only worth pursuing if the world that already exists is deeply flawed. Project 2 tends to be a good investment in the early stages because the founders are serious and it passes the endorsement. This allows for the creation of founder myths and should last long enough to get at least one or two rounds of funding. In later stages, these projects are good investments only if they make a breakthrough and “realize” the utopia. It’s unclear whether these utopian pursuits will succeed to make up for all the failed investments, and VCs only need to bet on one of them to win.

Part of the game here is to make the 2 item look as much like the 1 item as possible. This makes the project look less risky and makes investors feel better. From a game theory and mechanism design perspective, the real requirement for breakthrough is often waved away, and the proposed design is constantly reiterated as fully feasible and compatible with perfect incentives. These are higher-risk, higher-reward analogues of the 1 project that diverge on risk but not on potential reward.

It’s unclear whether these utopian pursuits will succeed, but VCs only need a few of them to win to make up for all the losers. Part of the game here is to make the 2 item look as much like the 1 item as possible. This makes the project look less risky and makes investors feel better.

3 items (high pomp, low utopianism)

3 stands for executing feeble money grabbing projects, an example of this is Bitconnect (a scam project in 2018). It was obvious to everyone in this environment that it was a scam. This is exactly why Bitconnect is targeting people outside the crypto community and is frankly less complex in general, to less sophisticated people, 3 projects seem more utopian, which is exactly what these projects want to do, Integrate with item 2. Ultimately, utopianism often masks deception. That’s why Item 3 represents the worst-case scenario in our industry, the real bottom reapers, greedy people cheating stupid people.The project collapse is what regulators ultimately use to justify tougher regulation of the entire environment. Can you think of any other projects in the crypto environment right now that intentionally only target people outside the environment? If it quacks like a duck.

4 (highly pompous, highly utopian)

4 represents the Rube Goldberg (Complex Mechanisms) machines and perpetual motion machines of our industry, like item 3. Execution is so good that even industry insiders have a hard time reasoning about these complex contraptions, and even skeptics can only conclude, “It probably doesn’t work, but maybe it works because I can’t be entirely sure what the problem is. “. Does Gordian Knot have a loose end? Can it be unlocked? Item 4 tries to pretend to be on Item 2 as much as possible. Over time, if the project is successful in the short term, it is likely that they will actually try to turn the scam into a real business and migrate to Project 2.

What’s the difference between WeWork (a shared office business) and Theranos (a scam that checks your body with a drop of blood)? The former migrated from Project 4 to Project 2, the latter did not. A comprehensive 4 project is a good short term investment for many in the field, sad but true. Part of the reason is that project tokens are able to achieve liquidity faster than private companies in the past, they were able to effectively “IPO”. All the incentives of a public company come with “going public”: short-term oriented quarters into the future, founders can retire before it’s revealed whether the product actually works or if it has true, unsubsidized product-market fit , especially when using the token itself to pay a fee to purchase usage. Most seemingly successful crypto projects are 4 projects because the incentive to cash out quickly is too great for participants to ignore. Founders, employees, investors, traders, exchanges, market makers, OTC desks, SAFT slingers, lawyers, other third-party service providers all benefit from these 4-project scams. The only person who doesn’t benefit is the last person to get in the car, in their crappy car, sipping a craving drink, and desperately clinging to a utopian dream sold to them by someone smarter and darker than themselves .

I find these illusory and utopian dimensions to have great explanatory power for the phenomena we see in this environment, cycle after cycle. All in all, Project 1 is a long-term project, but not for the short term.

Project 2 pretends to be Project 1 and can move to Project 1 if they solve a problem for which a solution may not exist.Project 2 is profitable in the short term, with higher risk and higher reward in the long run. Item 3 pretends to be item 2, but only for immature users. Project 4 pretends to be Project 2, and if they want to cover their butts and become legal after some initial success, they might migrate to Project 2. If all you care about is money, they are by far the best short-term investments and VCs benefit from getting into a lot of arbitrage here.


We basically stay away from trading NFTs and NFT-related tokens. We don’t feel there is enough competitive advantage to play that game. As far as aesthetics go, we don’t have great taste. In terms of the importance of parody, we don’t have enough Twitter followers to provide a lot of market deals for this.

First, let’s look at the categories of art and NFT avatars. Since they are status/signal symbols, Veblen/luxury items or heirloom/prestige items, we can say that some of them will retain their value for a long time. Just as there are a dozen or two top fashion houses in the real world, we can see a similar number of NFT collections with enough brand value to sustain. Having said that, top fashion houses certainly don’t have more than 1,000, so most NFT collections probably don’t have much value. So, at best, we have a power-law distribution where the winner gets the most value. We could also argue that status symbols are only useful when displayed to others. For fashion brands in a real environment, this will be limited to the flow of people in the wearer’s real space.

With NFTs, this will be limited to social media like Twitter and Discord. It’s hard to say which display space will be larger, although it’s a valid argument that the virtual world is wider than the physical world, especially as Twitter and Instagram are actively integrating NFT capabilities, especially as people spend more and more time online. Likewise, it’s no surprise that NFT avatars outperform general art, as they function better as avatars of online identities. Still, investing in NFTs should be done with caution, as the industry has the highest concentration of fraud of any recent narrative.

Second, I do think there is some reasonable chance of a vampire attack similar to LOOKS gaining market share. They are able to directly target the right demographics, which would be the perfect user of their platform. Having said that, both the price and market cap of LOOKS have been falling sharply recently, most of the trading volume is brush volume, and the founders have been cashing out. If this is a complete scam, it would not be surprising considering the team is anonymous and the token price has reached very high prices in a short period of time. Still, the idea of ​​having multiple NFT exchanges to compete makes sense because fees are high and there is room for competition. Additionally, there are no order book-like liquidity network effects, so challengers are more likely to compete with incumbents.

Finally, when it comes to non-artistic non-NFT avatars, the design space is largely unexplored. I think this expedition is worth it. As with all new paradigms, most of it may be nonsense, but I’m optimistic that people will find something good and useful here.

L1s (one-layer public chain)

Since the technological advantage is completely irrelevant until it finally rears its head at some indeterminate time in the future, we shouldn’t waste time on it. Suffice it to say, it’s perfectly reasonable what profile each different L1 uses. HFT Chicago prop store prefers SOL, Koreans prefer LUNA. Graduate students prefer AVAX (it’s the only professor token that performs well after all). Andre (AC)’s disciples prefer FTM. VCs prefer all L1s, because they only need to bet on a public chain, and VCs can get back their money. Sometimes a smaller L1 like NEAR because when its market cap is small, there are billions to grow.

ETH extremists are now in the same camp as old BTC extremists as they try to fend off attacks from “new” projects.Generally speaking, their defense has been unsuccessful because people love shiny new things. With new things, your greatest hopes and dreams become possible; as things unfold, you can only see the grim reality of what’s actually going on.

Behind the scenes of utopianism is the brutality of the real and ugly truths of human nature. Our natural desire for a perfect world, and our natural desire to capitalize on that desire in others. In the end, a Girardian scapegoat is needed to satisfy true believers into a mob of intensely disaffected disillusioned men who better fulfill this role than prophets whose promises will never be fulfilled. That’s not to say these L1s won’t be successful, it’s just that the founders are well aware of the sword of Damocles that has been hanging over their heads. The best is to win, and the second best is to keep making bigger trade-offs on the principle of decentralization, because it doesn’t matter until it happens, who knows when it will happen, and if it will happen. Maybe we’re all just afraid of Boogeyman; maybe not.

As we reshape the financial and monetary system, we begin to sympathize with past Fed chairs. Fed chairs don’t want the economy blowing up under their watch, so why not put the blame on the next person and kick the can down.

Anyway, may the best L1 win. Considering the participants makes all the incentives useful, that’s what I’m saying. Not everyone likes technology, in fact, not many. Maybe we’re all just afraid of Boogeyman; maybe not.

At this point, having waited over 7 years, I don’t even dare to ask if we will actually deliver PoS on Ethereum this year.What happens first: ETH 2.0 or reawakening a frozen market? Haha, who knows this.

When it comes to cross-chain bridges, the main challenge is to ensure that synthetic assets on a chain are not arbitrarily minted without proper backing of the original chain, and that the transfer process is secure. We have recently witnessed wormhole exploitation between SOL and ETH due to issues with the former. I’m not particularly concerned about this weakness as it’s just a bug that can be fixed. The SOL wormhole was rescued by Jump Crypto, even though it was probably a lot of their own money, if the bridge was allowed to fail, their SOL money bag would lose a lot of value, I’m sure they’d take their pound Rescue the flesh in the structure. However, don’t worry too much. However, even if the code is perfectly written, if there is a fundamental problem with the bridge in general, I would be concerned, and it remains to be seen.Also, even though bridges are fairly centralized today, as long as there is a way to finally decentralize without compromising security, it should be fine, we’ll see, and I’ll reserve my skepticism.

Decentralized Finance

DeFi 2.0 is similar to DeFi 1.0, but 2 is greater than 1, and the bigger the numba (the open source JIT compiler), the better.DeFi 2.0 is characterized by letting the protocol itself, control or own the asset. Sometimes it is called PCV (Protocol Controlled Value) or POL (Protocol Owned Liquidity) or whatever. The idea is the same, you now have a DeFi protocol that also runs a hedge fund, a good idea or a bad idea? Left to the reader to decide, the protocol now holds other protocol tokens in the treasury and participates in each other’s governance votes.

We are entering an era of systemic risk .

Is this relatively small slice of TIME-MIM-LUNA easier to reason about for a larger network of combined products, or rather, CDO products that are highly computed from pre-2008-crisis structured products? Composability is great and allows things to happen that were previously impossible, but we need to be careful because systemic risk accumulates over time and entangled protocols become harder to reason about. Other than that, same shit, bigger numbers.

Earn while playing

You work to make money, and you spend the money you earn on games, isn’t that always the case? Work is essentially something you don’t do out of your own volition, and you get paid for doing these unpopular tasks. Gaming is essentially something you do voluntarily because you love it and may even be willing to pay for it.

So what the hell is P2E (play while making money)? If you’re someone who earns World of Warcraft gold for a living, it’s a job. If you play World of Warcraft and enjoy World of Warcraft, you’re going to buy gold from people who produce World of Warcraft gold, that’s playing. In P2E, people are again using wild nomenclature, a cool-sounding catchphrase that makes it look like you can eat cake and eat it. In most games, someone works to earn money and someone pays to play, and there is little overlap between the two groups.

In the case of most “P2E” games, there are still people who work to make money, but the second group is mostly replaced by a new group that buys the workers’ jobs and eventually sells them to others, the paying group . In other words, the difference between most games and P2E is that you go from player to worker and speculator, and the people in the office hardly really want to play the game.

If there’s ever been a really interesting game in the P2E space, you’re just a normal game with workers and players. Except for one subtle point, there is no difference.

An on-chain bearer asset with virtual game assets allows an active secondary market to operate outside of the game developer platform, but can still be easily taxed by game developers. The general consensus among game developers is that secondary markets are bad for revenue because they don’t easily get a slice of every transaction and cannibalize the primary market. Now, with cryptocurrencies, they can tax easily, although the cannibalization problem of the primary market cannot be solved. In my opinion, this is still a good thing, because the best games of the past did have an active secondary market, and now there is at least a greater incentive for game developers to return to the good old days before the anti-secondary trend. Players get what they want, and developers get half of what they want. So crypto and gaming may have some strong synergies, but the current state of P2E is not.


As far as what the term “Metaverse” means, we already have it, and it’s a growing industry. If the term “Metaverse” means more than just VR, then we have to define it precisely, lest we start climbing the “ladder of abstraction in the sky” exaggerating ordinary values. When people say AI, they mean ML; when people say ML, they mean statistical methods; when people say statistical methods, they mean linear regression. The money is already inflating; let’s not exaggerate. If “Metaverse” means virtual communities, we already have it in Telegram chats, Discord communities, and even the company formerly known as Facebook. If the “Metaverse” merely describes a trend that people generally spend more and more time in virtual worlds and less and less time in real spaces, then it’s happening, the Japanese hikikomori ( otaku youth) is our future. When you print too much money, half of them stop having sex and become closed basement dwellers, while the other half become salarymen of giant zombie kiretsus until they are inevitably exhausted to death.

Nonetheless, from a practical standpoint, when we talk about investing in a “Metaverse”, whatever it actually means, this usually takes two forms: Investing in specific virtual lands/assets in the virtual world. For the former, encryption allows two innovations that were not possible before.

First , as long as you have some anti-oracle mechanism in place, you can allow your users to gain revenue ownership through the equivalent of a Web3 approach.

Second , you can enable your users to conduct commercial transactions with each other without relying on a centralized payment rail. In other words, you can log into Decentraland (MANA), have your avatar walk into a virtual art gallery, find a punk you like, and click on it to link directly to the auction on OpenSea. With one more click, your Metamask wallet opens and you can buy it from the gallery. Once purchased, you can display it in the gallery or take it down to display in your virtual home, showing it in two places.

Sure, cool. Still, as an example, VRChat could just integrate this feature, even if their verses are centralized. Does Decentraland have unique advantages and disadvantages compared to VRChat (Virtual Reality Games)? It’s hard to say, but maybe the next topic will shed some light. Does Decentraland have unique advantages and disadvantages compared to VRChat? It’s hard to say, but maybe the next topic will shed some light. Does Decentraland have unique advantages and disadvantages compared to VRChat? It’s hard to say, but maybe the next topic will shed some light.

What happens when we convert land title to bearer instrument? What happens when we turn virtual land titles into bearer instruments? This is indeed the core difference between Decentraland and Second Life. It creates a degree of scarcity for virtual land and unforgeable, uncapable land titles. Although there is still a question of how much the value of land near the transit center is related to the value of land far away from the transit center.

Virtual land values ​​also benefit from the flow of people around the area, like real space land, but in virtual reality, people can teleport and fly. If you restrict users from being able to teleport or fly, your competitors won’t impose such restrictions.Since the virtual world doesn’t need the laws of physics, I think the land can also be stacked vertically. So I don’t see virtual land values ​​reaching the same ratio of urban to rural land values ​​in real space, but some virtual lands may still be more valuable than others, depending on how many eyeballs they can capture locally. Finally, is virtual land ownership unalienable? What if someone puts something really vulgar or illegal, like some blood or porn, on their Decentraland scene? Can Decentraland take it down? Decentralized platforms should not work.


Unlike Valve, this time we actually counted to three. To avoid concept/word bloat, let’s use Chris Dixon’s definition of Web3. Read Web1. Web2 is read/write. Web3 is read/write/owned.

So basically, FCoin invented transaction fee mining, which was later popularized as yield farming in DeFi, so Web3 is yield farming. Just kidding, a paradigm shift is not enough. Web3 is a broad income instrument similar to a stock-like instrument, and enforcement actions by securities regulators will be difficult. It may be good or not, depending on whether you are a regulator or not.

Imagine if Uber (or Lyft if you’re Chris Dixon) could issue a small amount of Uber/Lyft stock to riders and drivers for every ride on their platform, without any paperwork or middleman overhead, and Without any overhead that could get into trouble with regulators, it could actually have been fine. A great way to build a bilateral or multilateral market, a great way to solve the egg problem, and a great way to get clients turned evangelists. OK, let’s see how it goes. When aspiring entrepreneurs start putting Web3 on every advocacy platform, caution still needs to be taken, as happened with the “AI” and “Uber for X” trends.

in conclusion

So all in all, everything is fine in the crypto space. In the long run, I am as optimistic as ever on the crypto space. In the short term, there is some work and clearing to be done. I know some people will call me: midwife, but I don’t comment on them:


Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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