From the VC coins to the Meme craze, everyone has become "aesthetic fatigue"

Original title: The People are Tired (of losing)

Author: Francescoweb3, person in charge of castle labs

Compiled: zhouzhou, BlockBeats

Editor's note: This article discusses in-depth changes in the crypto market, especially the fatigue of retail users. It is not difficult to find a shift from a venture-led market to a meme coin boom since early 2024. Although meme coin has provided a fairer opportunity for retail, they have eventually become too speculative, causing market conditions to worsen. Retail users are tired from losses, the market becomes fast and competitive, emphasizing the importance of finding new balance points, calling for more attention to projects with practical applications and fair issuance mechanisms.

The following is the original content (to facilitate reading comprehension, the original content has been compiled):

As Kaitoai emphasized, in the last two weeks of January 2025, the word "tired" has increased on crypto Twitter.

This cycle is different from other cycles and is more challenging, even surprised traders who have experienced two or three cycles. The market is changing: narratives change faster, and attention becomes the scariest currency. Last but not least, the increasing number of regulatory scrutiny and political intervention in the cryptosphere brings new variables.

Why do people feel tired?

Retail investors have missed opportunities for too long, and every time the goal seems to be right in front of them, the market's gameplay changes faster than the last time. In the 2021 cycle, we see venture investors gain exponential returns compared to retail investors who do not have private investment opportunities.

This continues until around 2023, with some projects like TIA and DYM launching, marking the end of the disillusionment of retail investors with these venture capital extraction technologies.

What are the most rational consequences for this? A movement seeking to change the control of power.

The long-known "Meme Coin" narrative has gained increasing attention as venture capitalists no longer have private chips to sell to ignorant buyers in the market. This is good for retail investors, who have managed to level the playing field. Until the narrative is over-rendered and saturated, the user's attention range is further shortened. Let's see how the market landscape evolves and where we might go, trying to explain why people are tired.

Phase 1 (early 2024) - From VC coins to meme coins

It almost seemed like a long time ago, before the AI ​​boom and the meme coin craze, there was a time when the mainstream gameplay for retail investors was airdrop. This gameplay is started by Arbitrum and other Layer 2 airdrops. Retail users see the possibility of airdropping by trying new protocols and chains, and airdrops have become a business, with airdrops as a service companies, etc.

However, dreams turned into nightmare, and when these currencies began publishing and revealing their token economics, users were very disappointed: all the efforts, and finally airdropped to almost nothing? One of the most controversial releases is Scroll, a type of ZK-EVM L2.

After more than a year of ecosystem promotion, Scroll’s airdrop was disappointing, and it is questionable that 5.5% of SCR supply was allocated to Binance, not the community.

In addition, most of these tokens have very low circulation (circulating supply/total supply) and a large share is allocated to VCs. Another topic of discussion is TIA and DYM, which once had the narrative of these tokens on crypto-tweets centered around pledging them in exchange for expectations for airdrops for future ecosystem projects.

You guessed it right: these airdrops have never happened, and the token price movement is just falling (below is the DYM chart).

Here is an overview of TIA's different rounds and investors' unlocking:

In the first unlock, more than 97.5% of TIA circulation supply was unlocked, worth more than $1.88, and the daily unlock of TIA reached $10 million.

Ultimately, retail investors get bored with these types of tokens, which means that most tokens only fall but not rise, and eventually even falls below their valuation at the time of their last financing.

This is evident when we look at the dashboards provided below:

This dashboard takes into account the return on investment for each VC best performing in the data sample.

Returns of venture capital in the previous cycle:

Returns for venture capital this cycle:

The end of the venture capital era is so obvious that even Hayes pointed this out accurately in his December 2024 article, at the end of the dark tunnel, retail investors see the dawn of hope: meme coins.

Tired of a venture-led plot, retail investors are finally able to enter the licenseless market for which blockchain should be open.

This must be the direction of the future, right?

Phase 2 - Meme Coin Crazy

After the end of the venture capital era, users had to find new ways of playing, which they discovered through muststopmurad and his "meme coin super cycle".

For retail investors, meme coins seem to be the closest thing to having equal opportunities in the market – until they are no longer the case.

Prices rise, Trump is elected, we are going to the moon.

But suddenly, the liquidity plug is unplugged, the market's attention turns elsewhere, and all your meme coins collapse when the market pulls back.

Meanwhile, all the insiders who had the opportunity to make a layout in the early stage also had the opportunity to sell their chips. Perhaps retail investors end up with even worse situations than they experienced in VC currency.

What's left now? Become more risk-taking, further shortening the scope of attention, and dispersing liquidity while trying to understand mistakes you have made through more gambling disguised as “deals”.

Pumpfun is just a symptom of the direction the market is heading.

jediBlocmates highlights the net negatives in this ecosystem.

Among the reasons mentioned, the Pump.Fun team keeps transferring a lot of expenses out. Last month alone, they transferred more than 880,877 SOLs to Kraken, with a total amount of 211,410,480.

The impact of the meme coins and Pump.Fun frenzy is evident in the market changes they bring: narrative changes quickly, the environment becomes like players to players, and people no longer believe anything.

Phase 3 - Market Post Trauma PTSD: People Feel Tired

After losing to venture capitalists, users are now carrying the trauma of the Pump.Fun arena, hoping that their next 100x gain will make up for the previous losses. The market has now changed forever, and the new way of playing is a reflection of this change.

The market rotation is more short and fast, and in the previous cycle you could hold the open position while sleeping and hold the tokens for several weeks, but now, you can only hold it for a few days or hours at most. The new project sucks all liquidity: attention is scarce, everyone is playing the same game.

The increasing influence of politics and regulation: This is particularly evident in the launch of TRUMP, highlighting the unprecedented impact of external events on the market.

Unfortunately, once again, retail investors are lost in this game, and many tokens become like the capital withdrawal mechanism they are already very familiar with. Contrary to this trend, the launch of Hyperliquidx has attracted attention to community-led airdrops and issuances. More than 31% of the airdrops were allocated to the community, and the token price has risen more than 7 times since its release, and Hyperliquid proves that fair issuance can be achieved.

Nevertheless, it must be considered that not every project can replicate this pattern, because the team has already undertaken tens of millions of dollars in spending over a long period of time like Hyperliquid.

Importantly, the launch of Hyperliquid has brought about a paradigm shift within the industry. With Kaito's release, the way the project launches strategy has also changed.

Where does this place us?

These stages considered highlight two extremes:

1. Venture investors have too much power: retail investors cannot participate in private equity rounds and can only act as exit liquidity.

2. Unlimited meme coin acquisition leads to a player-to-player market, and the overall market conditions become worse.

The two have the same consequences: dissatisfaction among retail investors, and the search for balanced and stable demand.

Let’s leave some possible ideas to see what the future may look like: return to practicality, reduce attention to meme coins, and focus more on practical projects.

Reduce attention to value extraction, focus more on value creation, and avoid zero-sum games. Return to fair releases, inspired by Hyperliquid.

A new transformation in how protocol marketing and token releases are used to market, grow activities with tools like Kaito, and value the influence of social graphs and communities.

Although we all know that price is the best marketing tool and has always been an important factor in attracting smart talent and liquidity, it would be a pity to focus on value extraction when a supportive regulatory environment is approaching. of.

The growth cycles of emerging markets are often filled with roller coaster ups and downs, but it is crucial to have an end goal and draw a viable path for most people. That is, build something truly valuable.