In the rapidly evolving world of blockchain, venture capital plays a crucial role. Yet, beneath the surface of sophisticated analysis lies a straightforward goal: selling tokens. Unfortunately, many VCs, especially newcomers, fail to turn a profit due to a lack of deep industry knowledge. Their primary function often boils down to promoting and supporting their investments through various channels.
The Performance of Liquid Funds
Currently, liquid funds are underperforming compared to Bitcoin (BTC). Historically, they were profitable, but so were individual investors. Liquid fund investors typically already have BTC exposure, forcing these funds to invest in non-BTC assets, which frequently struggle to outperform BTC. If a fund can't beat BTC, it doesn't add value.
Advanced Blockchain Literacy
Influencers (KOLs)
Never take influencer content at face value. Their statements often generate noise and serve as tools to gauge project funding and their network. When someone promotes a project, it’s usually because they have financial stakes. Disregard profit and loss screenshots and retrospective analyses. Genuine wealth is often understated, and the most seemingly affluent may not be as wealthy as they appear.
Centralized Exchanges
Inherently distrust centralized exchanges. Avoid using them for contract trading. They can serve as cross-chain bridges or platforms for buying spot currencies, but always be ready to withdraw funds at the slightest hint of FUD (Fear, Uncertainty, Doubt). Using a centralized exchange can be a good career start, providing passive information intake, but success depends on your ability to leverage this information.
Evaluating Blockchain Projects
Treat statements from project teams with skepticism. Announcements of partnerships often signify minimal progress. Focus on the tangible actions of the project team and evaluate how their work accelerates the value chain. If the outcomes positively influence public perception of token value, the project is worth considering. Be wary of projects with past ethical breaches—they are likely to repeat such behavior.
Marketing in Blockchain
Most project teams lack effective marketing strategies. It's challenging to quantify marketing success, and metrics often involve inflated figures. Basic marketing budgets are best converted into influencer rounds. Other marketing expenses are less effective than direct market actions like price boosts.
Individual Investment Approach
For VC-backed tokens, avoid promoting them publicly but feel free to share sincere insights. For community-driven tokens, engage in community building and advocacy. Trust on-chain data and genuine buy orders. Encourage any form of investor rights protection unless you have conflicting interests. Publicly documenting your learning journey and successes can build trust and credibility.
Key Takeaways
Navigating the blockchain industry requires skepticism, strategic thinking, and a reliance on verifiable data. Trust actions over words, and always prioritize projects and funds that demonstrate real, measurable progress.