Analyzing the Logic Behind VC Coin

Recently, the cryptocurrency market has seen a surge of projects dominated by venture capital ( VC ), attracting widespread attention. This article will delve into the operational model of VC coin, its market impact, and key points that investors should pay attention to.

1. The Rise and Fall of VC Projects

Taking Ethena, IO, and MSN as examples, these projects quickly attracted funding through high valuations and market enthusiasm. However, as the market becomes increasingly familiar with such operations, the appeal of VC projects has gradually weakened, and investors are starting to turn to other types of projects.

2. Market Bubble and Overvaluation Dilemma

The current round of financing frenzy has led to a market bubble, with many projects assigned valuations far exceeding their actual worth. Overvalued projects struggle to meet expectations, while a large influx of participants attempting to profit through venture capital has further intensified the chaotic situation.

3. Project Type and Development Prospects

There are various types of project teams in the market, including idealists, "puppet" founders, and projects set up purely for profit. However, top teams focused on long-term technological innovation, like Zama and Fhenix, are more likely to achieve success in the future.

4. Regional Differences in Investment Strategies

North American funds tend to support long-term projects with technological sentiment, while Asian funds focus more on market effectiveness. This difference reflects varying investment logic and cultural backgrounds.

5. Characteristics of Quality Projects and Investment Strategies

Excellent projects, such as those invested in by Paradigm, often have long-term development potential. Retail investors need to adjust their mindset, thinking from the perspective of the project parties, and look for opportunities to profit together with the project parties from VC.

6. Project Evaluation Method

Investors with technical skills and information channels are better at identifying the authenticity of projects. Even for projects with potential issues, they can judge whether it is worth participating based on their fundamentals.

7. "Gold Miner Mine" Theory

This theory reveals that there is no real "gold mine" in the market; most projects rely on the continuous influx and consumption of new users. The transactions between many projects are actually a kind of loop with no substantive value.

8. Current market's "human mining"

In the current market environment, VC itself has become the main "human mine". The ones who truly profit are those participants who obtain benefits from VC together with the project parties.

9. Pulling Fur Strategy

Participating in airdrops and staking is a low-cost, risk-controlled strategy. By diversifying investments across multiple projects, relatively stable returns can be achieved. This approach is suitable for long-term investors.

10. Project Selection Key Points

Be cautious of projects with high valuations but low circulation, as they face significant inflationary pressure. You can assess the quality of a project by checking the distribution of token holding addresses through a blockchain explorer.

11. The Technical Advantages of Ethereum

Ethereum is regarded as an ideal project for idealists in the cryptocurrency field due to its rigorous technical architecture and high security. However, the technical advantages are not directly related to the coin price.

Overall, in the VC-led cryptocurrency market, investors need to remain vigilant, thoroughly analyze the logic behind the projects and the strength of the teams, while adjusting their investment strategies to adapt to the constantly changing market environment.