Supply-side reform in the crypto world: What exactly are we creating?

Written by: Ice Frog

Yesterday, Du Jun posted a tweet about ABCDE stopping new project investments and the second phase of fundraising, which sparked a lot of discussions and a sense of pessimism.

Boss Du pointed out the core issue: there is a problem with the value creation mechanism in the primary market. I think this disappointment is not just from Boss Du alone; I believe it represents the fatigue, anxiety, and even confusion of many practitioners.

As a long-term “毛 user”, I can also be considered a level 1.5 long-term participant. I would like to discuss from another perspective: the issues we see today are actually a delayed yet urgent - supply-side reform crisis.

1. Airdrop credit collapse, the asset supply mechanism is systematically failing.

Recently, I had to embark on the path of defending my rights, to be frank, this is a desperate move.

Once upon a time, airdrops were the most revolutionary and idealistic institutional innovation in the Crypto world. It is not a copy of traditional IPOs, but rather attempts to make “consensus take precedence over price” by establishing a decentralized original order through token distribution.

It activates the community, drives the ecosystem, and even became a symbol of “permissionless entrepreneurship” for a time.

But now, airdrops have become a “carefully orchestrated script”: VC sets the valuation, project parties write the rules, and market makers prepare to unload; airdrops have become the “last supper” before TGE; they are not issued to kickstart the ecosystem, but rather to exit liquidity.

Airdrops have fallen from a “trust distribution mechanism” to a “capital chip liquidation mechanism.”

Many people blame the “毛党” (毛党), “脚本党” (脚本党), and studios, but this is actually putting the cart before the horse. The emergence of the “撸毛” phenomenon is not because the airdrop mechanism has been abused, but because it has lost the premise of being trusted. People began to vote with their feet and take advantage of it.

The triangular opposition of “Project Party -VC- Studio” is actually just a facade; the real problem behind it is that the incentive mechanism of the entire initial supply structure has been severely distorted.

The most serious consequence is that the collapse of airdrop credit has led to deeper repercussions: the trust bridge between the primary and secondary markets is completely breaking down.

This is no longer an individual project “crashing”, but rather the supply mechanism of on-chain assets is facing a structural collapse.

2. Valuation model failure: using the wrong ruler naturally leads to inaccurate value measurement.

Traditional primary valuation revolves around the “logic of project growth”: once the product is made, if users use it extensively and the commercialization path is clear, it can naturally be priced and exited.

But Crypto is not this kind of game.

Crypto projects are not businesses; they are a combination of a set of on-chain mechanisms: a logic for asset generation, a structure for transactions and games, and a system for the distribution of power and profits, formed by the combination of the three.

It does not rely on cash flow, but on liquidity;

It does not rely on user growth, but on users trading spontaneously;

It does not exit through mergers and acquisitions or public offerings, but rather completes value realization through circulation and governance power games.

Therefore, you will see such a contrast phenomenon:

Some projects have impressive user data and explosive social popularity, with FDV skyrocketing on TGE day, followed by a crash to zero.

Yet some “mechanism prototypes” with almost no interface, no community, and no white paper have attracted massive TVL overnight, becoming the new kings of the secondary market.

Why? Because in Web2, value is created through “usage”, while in Crypto, pricing is realized through “exchange”.

The fundamental difference behind this is: Web2 is the information Internet, aimed at connecting people with services; Crypto is the value Internet, aimed at connecting assets with markets. Everything that exists on the chain, whether it is tokens, protocols, rules, identity systems, or trading markets, ultimately exists to optimize the flow of value, shorten transaction paths, and reduce trust costs.

So when we evaluate a crypto project, we don’t look at what functions it has implemented, but rather whether it can construct a market, trigger competition, and stimulate liquidity.

This is the true “product strength” of Crypto.

Many projects are still copying the “platform + application” Web2 thinking to build ecosystems: they have chains, wallets, task systems, social features, and Launchpads. It seems that “everything is in place,” but in reality, there is “no trading” at all, so it is “not surprising” that they eventually collapse.

History tells us: The success of a crypto project is never because of what it “can do”, but because of what it “can inspire the market to do”.

The mechanism that can create sustained trading liquidity is the only moat.

3. The essence of supply-side reform: from distributing Tokens to creating sustainable tradable mechanisms and assets.

Boss Du said he no longer wants to participate in games that have “the upper line as the endpoint.”

What I want to say is that as users who are repeatedly consumed, we do not want to play the role of “the scapegoat of air consensus” time and time again, nor do we want to be forced defenders.

Today’s market is no longer lacking in capital, technology, or talent, but rather in a truly suitable asset supply system that adapts to the essence of Crypto:

The airdrop mechanism must be restructured to return to the original intention of “incentivizing genuine behavior and establishing verifiable trust”;

Valuation logic must be innovated, completely breaking away from the linear thinking of “product - growth - revenue” in Web2;

The ecological construction must be rewritten, shifting from functional stacking to mechanism collaboration and self-organization of liquidity;

VC roles must be reshaped, shifting from merely funding projects to becoming “co-builders of tradable mechanisms.”

This industry is not lacking functional products, nor is it lacking narrative builders; what is missing is mechanism-type innovators. This is the “productivity” of the Crypto world and also the seed for the next bull market.

The supply-side reform in the cryptocurrency circle has actually already begun; it’s just that everyone is belatedly realizing it. In the past, the industry created DeFi, created DEX, created launchpads… What will be created next? This is a question that all builders and investors must rethink.

But there is no doubt that the real transformation has indeed begun. As users looking to profit, aside from patiently waiting, we can only try to keep ourselves alive and stay at the table for the long term, without becoming the casualties of this era of change.