It’s getting increasingly difficult to raise funds in the early crypto primary market—not only because the market has run out of money, but because the old game rules are no longer working.
In recent remarks, Yili Hua discussed the current state of the crypto primary market, highlighting four core issues: narrative failure, excessive project supply, the 1+3 unlocking mechanism, and the high cost of getting listed.
In the past, projects could earn valuation by relying on whitepapers, institutional endorsements, TVL, and financing stories. But now the secondary market is increasingly unwilling to pay for “stories.” There are more and more projects, yet fewer and fewer that can truly break out. Instead, vast amounts of capital and attention are diluted.
More importantly, there is the 1+3 unlocking mechanism. VCs take on the risk of early investment, yet may face worse exit conditions, while project teams, market makers, exchanges, and other links have stronger liquidity advantages. Ultimately, it easily forms a structure where “VCs bear the risk, and secondary investors take on the buy-in pressure.”
On top of that, listing costs on top CEXs are rising. In order to obtain liquidity, projects have no choice but to pursue higher valuations and larger rounds of fundraising. This culminates in a cycle of “high valuation → high fundraising → high listing cost → high liquidity pressure.”
My view is that what the crypto primary market truly needs to change is not creating a new narrative, but rebuilding the connection between project value and the secondary market.
The three directions that are truly worth paying attention to, I believe, are: making CEX listing mechanisms more market-driven; weakening or even reforming irrational unlocking structures; and having projects return to real revenue, cash flow, and buybacks.
At the end of the day, Crypto still has to answer the simplest question: why is a project worth holding long-term?
If valuation can only be maintained through financing, pumping, and new narratives, this game will become harder and harder to continue.
But projects that actually have income, buybacks, users, and the ability to sustain growth may become the core assets for the next round of market repricing.
In recent remarks, Yili Hua discussed the current state of the crypto primary market, highlighting four core issues: narrative failure, excessive project supply, the 1+3 unlocking mechanism, and the high cost of getting listed.
In the past, projects could earn valuation by relying on whitepapers, institutional endorsements, TVL, and financing stories. But now the secondary market is increasingly unwilling to pay for “stories.” There are more and more projects, yet fewer and fewer that can truly break out. Instead, vast amounts of capital and attention are diluted.
More importantly, there is the 1+3 unlocking mechanism. VCs take on the risk of early investment, yet may face worse exit conditions, while project teams, market makers, exchanges, and other links have stronger liquidity advantages. Ultimately, it easily forms a structure where “VCs bear the risk, and secondary investors take on the buy-in pressure.”
On top of that, listing costs on top CEXs are rising. In order to obtain liquidity, projects have no choice but to pursue higher valuations and larger rounds of fundraising. This culminates in a cycle of “high valuation → high fundraising → high listing cost → high liquidity pressure.”
My view is that what the crypto primary market truly needs to change is not creating a new narrative, but rebuilding the connection between project value and the secondary market.
The three directions that are truly worth paying attention to, I believe, are: making CEX listing mechanisms more market-driven; weakening or even reforming irrational unlocking structures; and having projects return to real revenue, cash flow, and buybacks.
At the end of the day, Crypto still has to answer the simplest question: why is a project worth holding long-term?
If valuation can only be maintained through financing, pumping, and new narratives, this game will become harder and harder to continue.
But projects that actually have income, buybacks, users, and the ability to sustain growth may become the core assets for the next round of market repricing.