The Real Dilemmas of Financing and Developing Web3 Projects

Recently, several well-known Web3 projects have successively launched on exchanges. However, the market response has not been as expected. Taking LayerZero as an example, despite raising as much as $260 million and achieving a valuation of $3 billion, its performance after launch has been mediocre. Even though the price has seen a recent rebound, early investors still face significant pressure, as 90% of the tokens have not yet been released.

Zksync has also faced neglect. Once a star in the industry, Zksync raised $200 million in a single round of financing in 2022. However, as the technology became more widespread, its uniqueness gradually diminished. After its launch, the price of the token continued to decline, with a market value of only around $3 billion. Controversies over its airdrop strategy have also affected community and ecological project support.

Another highly anticipated project, Aleo, has also yet to issue its tokens. As a project valued at $1.45 billion in 2022, Aleo faces the dual challenges of funding pressure and market expectations.

Historical data shows that projects with financing scales exceeding $500 million often struggle to achieve good results. Among the projects that have issued tokens, EOS dropped from a financing amount of $40 billion to a market value of $1 billion. Terra and FTX have completely collapsed, resulting in significant losses.

The fate of projects that have not issued tokens is also not optimistic. Projects that once thrived, such as Forte and Sorare, have now fallen silent. Even NYDIG and Fireblocks, which focus on enterprise services, are facing challenges brought about by changes in the market environment.

In contrast, Moonpay, which has practical application scenarios, has demonstrated relatively stable performance. However, even Moonpay chose the traditional IPO route instead of issuing tokens.

Looking back at the financing history of successful projects, Ethereum, Solana, and others only raised relatively small amounts of funds. This phenomenon highlights the importance of early low-price investments and the potential risks of overvaluation on project development.

In the Web3 industry, true value comes from practical application scenarios and continuous innovation, rather than the scale of financing. Investors need to carefully assess project potential to avoid the risks associated with buying at high prices.