Analyzing the Inner Logic of VC Coin

In the current cryptocurrency market, VC-led projects dominate, especially in the Staking and CeDeFi sectors. By analyzing the development trajectories of projects like Ethena, IO, and MSN, we can observe the rise and fall of projects managed by VCs.

These projects often attract investors with high valuations and strictly controlled whitelist mechanisms, but they often struggle to maintain high market enthusiasm over the long term. For example, Ethena provided gains for retail investors in its early stages, but then the price plummeted; IO garnered widespread attention after announcing its financing, yet suffered setbacks due to immature technology and security vulnerabilities; MSN attracted investment through extensive promotion and endorsements, but quickly lost momentum after going public.

There are also some relatively successful VC projects in the market, such as EtherFi, Bouncebit, and Eigenlayer, but these projects are highly homogeneous, determining the trading platform, execution team, and exit plan from the very beginning. However, as investors become familiar with these routines, the appeal of VC projects gradually diminishes, and investors begin to turn to other types of projects.

The current wave of financing has led to market bubbles, making it difficult for many highly valued projects to meet expectations. VC institutions are under pressure to deploy funds, either investing in projects with mediocre performance or competing to invest in a few so-called top projects, which has resulted in inflated valuations. In this context, some projects like IO and MSN have emerged, reflecting the chaotic state of the market.

In terms of project types, there are idealism-driven projects, "puppet" projects that rely on capital operations, and top team projects focused on long-term technological innovation in the market. Among them, teams like Zama and Fhenix that focus on homomorphic encryption research, as well as some projects backed by Paradigm, demonstrate long-term development potential.

North American and Asian funds have differences in their investment philosophies. North American funds tend to support projects focused on technological innovation and long-term development, while Asian funds place more emphasis on market effectiveness and short-term returns. This difference reflects varying investment cultures and market environments.

For retail investors, it is important to think from the perspective of the project party and look for opportunities to profit from VC. At the same time, investors with technical capabilities and information channels are more likely to identify the authenticity of the project and potential issues.

The "Gold Miner Theory" reveals that there is no real gold mine in the market, and most projects rely on continuously attracting new users. In the current market, VC itself has become the main "human mine," and those who truly profit are the participants who profit alongside the project parties from the VC.

For ordinary investors, participating in low-risk strategies such as airdrops and staking may be a prudent choice. This approach has lower costs and controllable risks, making it suitable for long-term commitment. However, investors also need to be wary of projects with high valuations and low circulation, as these projects often face significant inflationary pressures.

Finally, although Ethereum (ETH) excels in technical rigor and security, making it an ideal project in the cryptocurrency field, it should be noted that technological advantages do not directly equate to an increase in coin prices. Investment decisions still need to take multiple factors into account.