Interpret the operational logic of VC coins and exchanges. Where do market funds flow to?

Author: shaqima, crypto KOL

"Where do the funds flow? Why don’t exchanges like your coin? Arrogance is not unsolvable, and solutions can be found in lessons learned from past mistakes. 》

There have been many opinions on this topic recently. I have comprehensively thought about it from the perspective of the flow of the entire capital market as well as the exchange and VC business models.

Here we use easy-to-understand logic and examples to share.

The current situation, history tells us that it is not unsolvable.

The content is divided into several major categories:

1. Current market capital distribution and crowd distribution

2. VC model coins and the operating logic of exchanges

3. Why don’t exchanges like your coins?

4. How to break the situation in the future? Let’s look at the lessons learned from the past

If you want to know why the exchange does not like your currency, you must first understand the exchange’s operating model and what role it plays in the crypto ecosystem (fund market) Role.

1. Market Fund Distribution and Crowd Distribution

From the broad categories, the capital market can be mainly divided into primary and secondary levels. If it is subdivided downward, various ecologies, sectors and different forms of funds will appear. Products (NFT, Token, inscriptions, runes...).

The crowd can be divided into two major categories, Chinese and overseas.

Since the implementation of the policy, Chinese people have very few options for exchanges. Therefore, for Chinese people, the current attitude of the exchange is not to ask you to come, but to the attitude that if you don’t come, you will have nowhere to go. Moreover, as the wealth creation effect takes place, people will come.

Of course, there is not only one exchange, but each exchange has found its own unique core competitiveness in the market.

Some choose to focus on security, some focus on the construction and promotion of new ecology, some choose to survive some sub-categories that are not favored by leading exchanges, and some even compete for the cake of the primary market...

Therefore, putting aside the form of assets, from the perspective of the exchange, B can be classified as:

C: Ordinary assets in the primary market (the risk is uncertain and requires research, understanding and then decision-making)

B: Level 1 Good assets in the market (have potential, but still have risks, analyze their benefits before making decisions)

A: Excellent assets in the primary market (very good endorsement background, less risk, deterministic returns)

Therefore, Class A assets are what everyone is rushing to get, Class B assets are selected by leading exchanges, Class C assets are basically not looked at, just play in the primary market by yourself

Use an example to briefly summarize

The ABCs here are like candidates. The exchange is divided into top undergraduates, undergraduates, and junior college students.

Excellent candidates can bring benefits to the school and are naturally liked by everyone.

If you are not excellent, but you have connections and can bring value to the school, it is the same.

We can accept those with average grades and can afford the money. After all, schools also have to make money. However, places are limited, but don't be discouraged, there are other schools that welcome you more than us.

You can give money to those who are poor in studies, but there is a hidden danger of disturbing the school atmosphere. If you discredit the school, you will lose more than you gain. You might as well fend for yourself, or go to a junior college. There are always schools that are not afraid of risks and want to make money from you.

The threshold is formed. Therefore, project parties also need to take exams.

Of course these are on the surface, what are the places where the secret operations are done?

If you are "overseas status", even if your grades and strength are average, but if you come to me, you can let me stay overseas The market can also become famous. Nature is also welcome.

So, in the current capital market, projects dominated by Chinese people must rely on strength to win. If you don’t want to be involved, it depends on your background and connections. After all, the Chinese market is already saturated. I’m not afraid that you won’t choose me. After all, if you don’t choose me, you won’t have anywhere to go.

Overseas markets are the main target for exchanges to increase revenue.

After accepting projects that are relatively popular overseas, you can bring in overseas users. Once you can get them to stay, you can continue to expand your income.

At this point, the crowd and funds are clearly visible at a glance.

If we go deeper, when a new narrative appears, first look at the proportion of people in it.

If it is mainly overseas users, the privileged channel will be given first, and the threshold can be lowered for you. If it really doesn't work, you don't have to make money, as long as you can bring people. I can earn it back from them in the future.

If it is mainly domestic users, it depends on your ability and strength.

The narrative is novel enough, and we are not old-fashioned people. We should praise it when it is due, but there are still one indispensable conditions. When your ecology is large enough and the profits are considerable enough, let’s talk about the “sword” thing.

Therefore, under the condition of being firm and fearless, it is better to be patient rather than excessive.

After talking about the external environment, let’s look at the internal structure.

2. The operational logic of VC model coins and exchanges

For the sake of simplicity, let’s not talk about people who are born with golden keys. Let’s start with common projects.

After a narrative is constructed, what it needs is to survive in the market, which is traffic. When there is no popularity at the beginning, you need data to support your "respectability", so during the Qianlong period, everyone's starting line is the same.

When you achieve small achievements, capable people will naturally offer you an olive branch. If your own conditions are not strong enough, it will definitely be difficult to fight alone. We need to huddle together to keep warm.

At this time, your basic traffic will begin to expand through these olive branches.

When the traffic has expanded to an ideal stage, you will be qualified to attend prestigious schools.

Then we need to talk about returns. After all, if you don’t have money, who will bullshit you?

From the beginning, 100% of what is yours has been given to the olive branches, and part of it has been given to famous schools. At this time, when you touch your trouser pocket, it’s broken. There’s not enough money left to share with the brothers who helped me support the show when I was not famous! What should I do? Witches are good things.

"The so-called witches and other incidents have occurred frequently recently. It is really a joke that these can be swallowed in the encryption field."

So, in the above logic.

The project party plays the role of technical conception and implementation. (Of course, there are also people who make money purely based on their ideas. That’s ancient times)

VC plays the role of Wang Po. We must help you build momentum, give you money when you are short of money, and help you build your reputation through personal connections.

Exchanges act as traffic expanders (liquidity).

The project party has made profits from starting his own business through technology and ideas. VCs earn their own low-price chips through their personal connections and resources. The exchange uses its own traffic to exchange for low-priced chips.

After allocating the chips, the next step is how to sell better. (I won’t mention market makers too much here, the logic is the same.)

After talking about VC, let’s look at exchanges:

After all, exchanges are the earliest people to start businesses. They have built a convenient trading environment through technology. There is no Despite the complexity of the primary market, we feel that a certain amount of risk is reduced here.

Once the technology is ready, someone needs to come. In the initial stage of survival, you need various project parties to bring people in and conduct subsidy activities to attract people to come and stay, so as to make your place popular.

One day I discovered that everyone in the village was playing in your venue, and there was no other venue within hundreds of miles. Naturally, you won’t work too hard to promote it.

The next thing you need to think about is how to get tourists from further away to come to your place.

So essentially everyone is circling their own pool based on the entire market. When their wings are full, they will naturally cherish their feathers. In other words, how can you accept the vegetables you grow by others just as they say?

3. Why doesn’t the exchange like your coins?

No matter how your children look at it, it is good. This view is often true. It needs to be given up.

Many times, most projects fulfill more traffic requirements, but fail to meet revenue requirements.

As the old saying goes, a teacher is famous. The exchange also needs a good investment certificate to accept you.

Let’s examine a project from the perspective of an exchange:

1. Is the traffic huge enough? If your traffic is huge enough, it’s what I want. Can be easy to talk to.

If there is only a small amount of traffic, then look at others.

2. Can you bring benefits? The benefits of trading volume are the last choice for exchanges, and it is also the bottom line for projects with high traffic.

Direct income is the most real thing. If you can’t see the money, why should the exchange provide you with traffic in exchange for liquidity? If you take the money and leave, the exchange will be a mess.

So, this is true when the chips are given or the money is given.

"Master Huang, if you don't have money, how can you suppress the bandits?"

So, no matter how big the project is, the exchange can obviously use free support to increase your dreams. Why should you use your own real money to support your dream?

Everything boils down to profit.

Obvious rules are always used to punish people, while secret rules are used to get things done.

You think that the child you selected has met those so-called requirements, but in fact, it is just a big dream. Moreover, it is more often necessary to truly evaluate the advantages of the project from an objective perspective. It’s not that when you see a foreigner, you think they are all foreigners, they are all foreigners. This is self-deception.

4. How to break the situation in the future? Let’s look at the lessons learned from the past

The market is the product of buying and selling behavior, and the exchange will always just simplify the path of this buying and selling behavior, thereby getting a share of the pie. When the crowd is big enough, you will naturally earn more.

But the market is never an infinite cake, so it is impossible for exchanges to monopolize the entire market. This is the norm.

When things develop to a certain stage, they will always face challenges at the current stage.

I don’t care about the reason for Binance’s current behavior, but it is true that Binance has encountered a bottleneck.

Exchanges cannot achieve both innovation, profit and security.

Under the current high and difficult situation, even Binance cannot completely monopolize all groups in the market.

On the one hand, it is risk, on the other hand, it is an upward game of interests, and on the other hand, it is a downward competition for traffic. There must always be something to give.

Based on the current situation, compliance and security may be Binance’s primary choice at the moment, and therefore it has lost its vitality and innovation.

The recent emerging MEME focuses on the selling points of fairness and decentralization as much as possible, but it also means one thing, kicking away many of the original ecological food chain roles.

This chain naturally can no longer operate under the previous model. It means innovation.

This is not the first time that this kind of thing has happened. BYAC in 2021 is an emerging product of NFT. The exchange’s role in this carnival is more of touting in the first half and following in the second half.

Therefore, under this emerging market, many other trading scenarios such as Opensea have also appeared.

The laws of the market cannot be completely controlled by a single individual

Therefore, whether it is pump or unisat at the current stage, the emergence of these platforms also plays a heavier role in the new link.

In the future, more emerging assets will bypass these so-called leading platforms to shine. When there is enough traffic, token assets will be derived and returned to these platforms to jointly promote the entire ecological market.

The current stage of Binance is no longer a small boat with strong maneuverability. Although a giant ship needs to be stable, it will not take away the existence value of the small boat.

So at the current stage, whether MEME or other emerging things, it gives opportunities to more boats.

Take this opportunity and more giant wheels will appear. In the final analysis, even if the MEME track is deprived of certain roles of conventional VC model tokens in the future, it will not be able to become the object of choice for the exchanges favored by these VCs.

It does not mean that there will not be MEME’s own exchange.

Everyone has different standards for evaluating excellence. In a market with thousands of people and faces, when the demand is huge enough, more opportunities will be derived.

NFT, Pump, Brc20, Rune, will not grow after being rejected by Binance

Under the huge torrent of history, exchanges are just one of the passers-by. Binance has accomplished its current feat within a few years, which also means: there are successors.

The current problem is a dilemma, but it is also an opportunity for those exchanges and teams with ideas.

The fall of any giant ship will cause heavy harm to the industry, and everyone needs to pay for it. There is no need to destroy it. It can only be said that with the upgrade and development, many people are no longer its customer group.

But it doesn’t mean that this market no longer exists

For the withdrawal and security of large funds, Binance still has core competitiveness.

When it cannot meet everyone’s expectations for “promoting the industry”, other rising stars will naturally appear.

The catfish effect can sometimes stimulate industry development after all.

From an ecological perspective, Binance cannot stop cyclical operations. From an individual investor's perspective, maintaining the same trading logic as the exchange can still earn ideal returns.

Looking forward to a brilliant way to break the situation.

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