In recent days, some new coins in the secondary market have collectively fallen, seemingly reflecting the market's uprising against the current cycle of "first narrative, then financing, and finally TGE" in the VC industrialization of coin creation? It is worth pondering why retail investors would rather participate in high-risk PVP conspiracy coin games on-chain, yet keep their distance from new coins endorsed by VCs? Next, let me share my thoughts:

1) Firstly, we must acknowledge that the previous round of VC-led industry innovation-driven models has evolved into an industrialized assembly line of "financing, issuing coins, and launching products." For some time now, the glamorous narrative of white papers + top-tier luxurious investment lineups + seemingly impressive financing figures + king-level expectations of profit has become a liquidity harvesting weapon, severely overdrawing the trust of the market.

Although we cannot generalize, when a heap of projects that rarely deliver on promises and have no wealth effect are pushed to the market, it leads to the irrational perception of the market equating VC schemes with failure.

2) The main fatal issue with VC coins lies in their pricing mechanism. Once a project completes multiple rounds of financing, the valuation at TGE is already inflated, leading to two inevitable outcomes: first, retail investors face too high a buying cost; second, early investors have strong motives to sell. This undoubtedly creates a "death trap" for new coins. Following this logic, some projects are more likely to face downward pressure post-TGE, and unilateral declines will also drag the market into negative sentiments, resulting in a vicious cycle.

In contrast, those community coins that start from zero on-chain with low market capitalization, despite their unknown risks, still deter many retail investors from touching VC coins, which have high expectations of decline and certainty.

3) A market environment with depleted liquidity will deal a more fatal blow to VC coins. Imagine, when all participants believe that selling out immediately after TGE is the optimal strategy and see shorting as a rational choice, every VC coin launch will face a significant market sell-off dilemma. In the context of overall market liquidity depletion, VC coins are likely to become the "sacrificial" targets.

This is akin to a "prisoner's dilemma"; if project teams distribute airdrops generously, they will face selling pressure, while being reluctant to release tokens will invite public criticism. Either way, it results in a lack of sufficient buying support.

4) Everyone is clear about the problems; how can we break the trust crisis of VC coins? The core issue lies in how to reconstruct the balance of interests among project teams, VCs, and the community. For example:

1. Starting with undervaluation, leaving room for growth: Project teams and VCs should accept a lower initial valuation, allowing TGE to serve as the true starting point of the project's value rather than its peak, thus providing the market with sufficient growth expectations; (Recently, I've seen many financing rounds that are still large, indicating that the problems have not yet intensified.)

2. Reducing VC influence in certain stages: Introducing community participation in specific phases through DAO governance, IDOs, and fair distribution methods, reducing the dominance of VCs in token distribution and increasing community weight.

3. Differentiated incentive mechanisms: Extra incentives should be designed for long-term holders, truly returning value to the participants and builders of the project ecosystem, rather than short-term speculators. This requires further upgrades to the airdrop mechanism.

4. Transparent operations: Project teams should revive the originally intended transparent accountability mechanisms for periodically disclosing development progress and fund usage, rather than merely conducting unilateral market promotion before and after TGE.

Above.

In fact, VCs have made significant contributions to the maturation of the Crypto industry. Speaking of VC coins in a negative light does not mean we must completely de-VC. Without VCs, the industry would be plagued by conspiracy groups that could lead to another catastrophe.

The current financing ecology of the Crypto market still needs reconstruction. VCs should transition from being passive "arbitrage intermediaries" to active "value enablers". Essentially, the current predicament of VC coins only reflects the excessive internal competition in the market, and is also a manifestation of the maturing Crypto market. This raises greater demands on ordinary investors regarding how to identify quality projects and how to invest rationally.