Author: Kevin, the Researcher at Movemaker
| Token | MC | FDV | Token Distribution | Price Action |
|---|---|---|---|---|
| BERA | $610m | $2.8b | Airdrop 15.8％ VC 34.3% | -61.6% |
| IP | $409m | $1.6b | VC 21.6% | -37.5% |
| GPS | $277m | $1.5b | Airdrop 10％ VC 19.33% | -32.0% |
| PLUME | $265m | $1.3b | Airdrop 7％ VC 21% | -38.8% |
| B3 | $205m | $967m | VC 20% | -48.5% |
| BIO | $178m | $446m | Airdrop 6％ VC 13.6% | -85.4% |
| SHELL | $ 146m | $ 542m | IDO 4% VC 29% | -9.8% |
| LAYER | $ 148m | $ 724m | Airdrop 12％ VC 16.66% | -49.6% |
| SONIC | $ 115m | $ 774m | Airdrop 7％ VC 15% | -73.4% |
The VC share of the above projects is generally between 10% and 30%, with little change compared to the previous cycle. Most projects choose to distribute Tokens to the community through Airdrops, which they see as a reasonable way of community distribution. However, in reality, users do not hold the Tokens received from Airdrops for a long time, but tend to sell them immediately. This is because users believe that the project party often hides a large number of Tokens in the Airdrop, so there is huge selling pressure in the market after the TGE. The concentration of Token holdings is not conducive to the effectiveness of Airdrops. This phenomenon has existed for the past few years, and the Token distribution method has not changed much. The performance of Token prices shows that the price performance of VC-driven Tokens is very poor, and they often enter a unilateral downward trend after Token issuance.
Among them, $SHELL is slightly different. It allocates 4% of the Tokens through IDO, and the IDO market value of the project is only $20 million, which is different from the many VC-driven Tokens. In addition, Soon and Pump Fun choose to distribute more than 50% of the total Token supply through fair launch, and combine a small number of VCs and KOLs for large-scale community fundraising. This way of giving back to the community may be more easily accepted, and the proceeds from community fundraising can be locked up in advance. Although the project party no longer holds a large number of Tokens, they can repurchase the Tokens in the market through market making, which not only sends a positive signal to the community, but also allows them to recover the Tokens at a lower price.
The End of the Memecoin Bubble Frenzy: Liquidity Vortex and the Collapse of Market Structure
The transition from a market balance state dominated by VC-driven Builders to a pure "pump" token issuance bubble model has led to the inevitable zero-sum game situation for these Tokens, ultimately benefiting only a few, while the majority of retail investors are more likely to suffer losses and exit. This phenomenon will exacerbate the collapse of the primary and secondary market structure, and the rebuilding or accumulation of holdings may take longer.
The atmosphere in the Memecoin market has plummeted to the extreme. As retail investors gradually realize that the essence of Memecoins is still inseparable from the control of the conspiracy group - including DEXs, capital parties, market makers, VCs, KOLs and celebrities - the issuance of Memecoins has completely lost fairness. The severe short-term losses will quickly affect users' psychological expectations, and this Token issuance strategy is approaching a stage-wise end.
Over the past year or more, retail investors have made the largest profits in the Memecoin track. Although the Agent narrative has driven market enthusiasm by promoting market culture centered on open source community innovation, the fact is that this wave of AI Agent craze has not changed the essence of Memecoins. A large number of Web2 individual developers and Web3 shell projects have quickly occupied the market, leading to the emergence of a large number of AI Memecoin projects disguised as "value investment".
Community-driven Tokens are controlled by the conspiracy group, and prices are maliciously manipulated to achieve "fast-tracking". This approach has seriously negatively impacted the long-term development of the project. Former Memecoin projects used religious beliefs or the support of minority groups to alleviate the selling pressure of Tokens, and achieved an exit process that users could accept through the operation of market makers.
However, when the Memecoin community is no longer protected by religion or minority groups, it means that the market's sensitivity has declined. Retail investors are still expecting the opportunity to get rich overnight, they are eager to find Tokens with certainty, and hope to see projects with deep liquidity at the opening, which is a fatal blow to retail investors by the conspiracy group. The bigger the bet, the more lucrative the returns, and this return has begun to attract the attention of teams outside the industry. After these teams have obtained the benefits, they will no longer use stablecoins to buy cryptocurrencies, because they lack faith in Bitcoin. The drained liquidity will be permanently lost from the cryptocurrency market.
The Death Spiral of VC Coins: Inertial Traps and Liquidity Strangulation under the Consensus of Shorting
The strategy of the previous cycle has become ineffective, but there are still a large number of project parties using the same strategy due to inertia. **Releasing a small portion of Tokens to VCs and maintaining high control, allowing retail investors to buy on exchanges. This strategy has become ineffective, but the inertia of thinking makes project parties and VCs unwilling to change easily.** The biggest drawback of VC-driven Tokens is that they cannot gain an early advantage at the TGE. That is, users no longer expect to obtain ideal returns by buying Tokens at the time of issuance, because users believe that the project party and the exchange hold a large number of Tokens, resulting in an unfair position for both parties. At the same time, the return on VC investment has dropped sharply in this cycle, so the investment amount of VCs has also begun to decline, coupled with the unwillingness of users to take over on the exchange, the issuance of VC Tokens faces great difficulties.
For VC projects or exchanges, going public may not be the best choice. The liquidity drained by celebrity Tokens or political Token teams has not been injected into other Tokens, such as Ethereum, SOL or other Altcoins. Therefore, once the VC Tokens are listed on the exchange, the contract fee rate will quickly become -2%. The team will not have the motivation to pull up the price, because the goal of going public has been achieved; the exchange will not pull up the price either, because shorting new Tokens has become a market consensus.
When the Token enters a unilateral downward trend immediately after issuance, the higher the frequency of this phenomenon, the more the market users' cognition will be strengthened, and the "bad money drives out good money" situation will occur. Assuming that in the next TGE, the probability of project parties who issue Tokens and immediately dump the price is 70%, and the willingness to support the price and provide market making is 30%. Under the influence of the continuous appearance of dump projects, retail investors will develop retaliatory short-selling behavior, even if they know the risk of shorting Tokens immediately after issuance is extremely high. When the short-selling situation in the futures market reaches the extreme, the project parties and exchanges will also have to join the short-selling ranks to make up for the target returns that cannot be achieved by dumping the price. When 30% of the teams see this situation, even if they are willing to provide market making, they are unwilling to bear such a huge price difference between futures and spot. Therefore, the probability of project parties who issue Tokens and immediately dump the price will further increase, and the teams that can create a positive effect after issuance will gradually decrease.
The unwillingness to lose control of the holdings makes a large number of VC Tokens have no progress or innovation compared to four years ago at the TGE. The inertia of thinking is stronger than imagined for VCs and project parties. Due to the dispersion of project liquidity, the long VC unlocking cycle, and the constant replacement of project parties and VCs, although this TGE method has always had problems, VCs and project parties have shown a numb attitude. A large number of project parties may be establishing a project for the first time, and when faced with difficulties they have never experienced before, they tend to develop survivor bias, believing that they can create different value.
Dual-drive paradigm migration: On-chain transparent game-playing breaks the deadlock of VC token pricing
Why choose the VC + community dual-drive? The pure VC-driven model will increase the pricing error between users and project parties, which is not conducive to the price performance of tokens in the early stage of issuance; while the completely fair launch model is easy to be maliciously manipulated by the conspiracy group behind it, resulting in the loss of a large amount of low-priced chips, and the price fluctuates within a cycle in a single day, which is a devastating blow to the subsequent development of the project.
Only by combining the two, VC entering the project in the early stage of establishment, providing the project party with reasonable resources and development plan, reducing the financing needs of the team in the early stage of development, and avoiding the worst outcome of losing all the chips due to fair launch and only getting low-certainty returns.
Over the past year, more and more teams have found that the traditional financing model is becoming ineffective - the routine of giving VC a small share, highly controlling the disk, and waiting for the disk to be pulled up on the exchange is difficult to continue. With the tightening of VC pockets, the refusal of retail investors to take over, and the increase in the threshold for listing on major exchanges, a new set of gameplay more suitable for the bear market is emerging under the triple pressure: Joining forces with top KOLs and a small number of VCs, and promoting projects through large-scale community launches and low-market-value cold starts.
Projects represented by Soon and Pump Fun are opening up a new path through "large-scale community launches" - joining forces with top KOLs to endorse, directly distributing 40%-60% of the tokens to the community, and launching the project at a valuation as low as $10 million, realizing hundreds of millions of dollars in financing. This model builds consensus FOMO through the influence of KOLs, locks in returns in advance, and exchanges high liquidity for market depth. Although the short-term advantage of disk control is abandoned, it can be repurchased at low prices during the bear market through a compliant market-making mechanism. Essentially, this is a paradigm shift in the power structure: from the VC-led game of "passing the drum" (institutional takeover - listing and dumping - retail investors buying) to the transparent game of community consensus pricing, and the project party and the community form a new symbiotic relationship in the liquidity premium.
Recently, Myshell can be seen as a breakthrough attempt between BNB and the project party. 4% of its tokens are issued through IDO, with an IDO market value of only $20 million. To participate in the IDO, users need to purchase BNB and operate through the exchange wallet, and all transactions are directly recorded on the chain. This mechanism brings new users to the wallet while allowing them to obtain fair opportunities in a more transparent environment. For Myshell, the operation of market makers ensures a reasonable price increase. Without sufficient market support, the token price cannot be maintained in a healthy range. As the project develops, from low market value to high market value, and with the continuous enhancement of liquidity, the project gradually gains market recognition. The contradiction between the project party and VC lies in transparency. After the project party launches the tokens through IDO, it no longer relies on the exchange, which can solve the contradiction between the two parties in terms of transparency. The token unlocking process on the chain becomes more transparent, ensuring that the conflicts of interest that existed in the past have been effectively resolved. On the other hand, the dilemma faced by traditional CEXs is that the token price often plummets after issuance, causing the trading volume of the exchange to gradually decline, while the transparency of on-chain data allows the exchange and market participants to more accurately assess the real situation of the project.
It can be said that the core contradiction between users and project parties lies in pricing and fairness. The purpose of fair launch or IDO is to meet users' expectations of token pricing. The fundamental problem of VC tokens lies in the lack of buying power after listing, and pricing and expectations are the main reasons. The breakthrough point is the project party and the exchange. Only by fairly sharing the tokens with the community and continuously promoting the construction of the technical roadmap can the value growth of the project be realized.
