The Evolution and Future of the Internet Capital Market

The concept of "Internet Capital Market" encompasses a wide range of meanings. In the current context, it mainly refers to financial innovations driven by the advantages of blockchain technology: fintech that transcends geographical boundaries. People can use digital currencies for lending, tokenize government bonds and private credit, issue stablecoins, and so on. In today's intersection of traditional finance and digital assets, these innovations are classified as "Internet Capital Market".

For practitioners experienced in the on-chain trading field, the connotation of the internet Capital Market goes beyond "on-chain government bonds." It also includes NFTs, DeFi, ICOs, and various speculative tools that have emerged over the past decade, as well as various tokens that have been tradable since the deployment of Ethereum's first smart contract in 2015.

This article will focus on the fundamental logic behind tokens, narratives, high returns, and airdrops, delving into this aspect of the internet Capital Market. We are about to welcome what seasoned crypto participants refer to as the "new metaverse." To understand this trend, it is essential to first observe these capital formation mechanisms and their impacts.

Evolution of Market Financing Mechanisms

Looking back over the past few cycles, the market financing mechanisms have shown a clear trend of change. From ICOs to centralized exchange altcoins, and then to meme coins, this evolution can be briefly summarized as follows:

Early ICOs (around 2017)

The financing mechanism at this stage is mainly based on the "commitment" of the project party, and investors often aim to find the next buyer. The technology of most projects is not mature or lacks practical value. This stage can be described as a game of "passing the parcel." Typical cases include some early cryptocurrency projects.

Venture Capital Boom (2021 Bubble Period)

This wave attracted a large amount of institutional capital, but in retrospect, it had a certain negative impact on the industry - excessively high valuations and unreasonable incentive designs. However, this period also gave birth to some high-quality protocols that are still widely used today. For example, certain now-popular crypto products emerged during this time. Although their early token performances may not have been satisfactory, they have undeniably become one of the best crypto products currently available.

polarization

After the collapse of FTX, the crypto space fell into a trust crisis, and many began to question the entire industry. However, it is important to recognize the nuances within. While some projects do have speculative nature, stablecoins and asset tokenization are demonstrating significant value in real-world scenarios. This stage includes both purely meme token projects and more "serious" narratives, such as AI agents. Some projects have transitioned from the mere "label" stage to a more mature phase.

Compliance and the Integration of Digital Markets

We are entering a more mature stage - institutional investors are beginning to genuinely participate and maintain enthusiasm. However, having too much understanding of the internal workings of the industry may become a burden, leading to a pessimistic attitude towards certain projects.

Take Ethereum as an example: although its performance has been unsatisfactory over the past two years, it has now become the focus of institutional investors. Large financial institutions are launching tokenized funds on Ethereum, without paying much attention to other details.

This is exactly the perspective we need to internalize. Many cryptocurrency projects seem to have forgotten how to "dream," while traditional finance is relearning this. As digitalization and mainstreaming progress, more high-quality builders will join this field.

The Future Landscape of the Internet Capital Market

We are ushering in an unprecedented period of prosperity in the past five years—a perfect combination of regulation, technological strength, and capital, much of which will occur on-chain. It is foreseeable that in the coming years, some of the most valuable companies are likely to issue tokens on-chain.

In fact, this trend has already started to emerge. Certain on-chain projects are typical representatives of the internet Capital Market. They have not received venture capital, nor do they have equity burdens, but are purely on-chain token projects that initially were not even listed on exchanges.

Such projects could quickly grow into companies with a market value of hundreds of billions of dollars, without traditional roadshow materials and equity structures. They act as pure on-chain giants, potentially dominating the market as soon as they emerge, with annual revenues reaching billions of dollars. This represents the purest form of operation in the internet capital market.

In the coming years, there may be more similar cases. We are moving towards an era full of opportunities—do not let pessimism stifle the dreams of the past. Unfortunately, many people are busy chasing the short-term gains of some random small coin, as this has been the behavioral pattern the market has been accustomed to over the past few years. It is time to have grander dreams.

In the era of the Internet Capital Market, having a certain proportion of proprietary currency and turning it into products worth hundreds of millions to billions of dollars may result in potential gains far exceeding expectations.

Financing is still necessary, and ICOs are not entirely undesirable. However, if there is confidence in the product, one can consider issuing on-chain tokens and retaining sufficient shares, allowing the market to determine the value. The problem with traditional capitalism is that it often leads participants to have a short-sighted view. It drives innovation in the right direction but fails to promote deep-level innovation. Too many people are satisfied with quick money, neglecting the greater benefits brought by long-term compounding.

Long-term thinking usually leads to exponential growth rather than arithmetic growth— for example, doubling in 2 years, growing five times in 4 years, and growing ten times in 5 years.

Conclusion: From Speculation to True Ownership

In the short term, the market undoubtedly still has speculative attributes – the prices of "worthless" assets may rise, the prices of "quality assets" may exceed their intrinsic value, and situations of team sell-offs may occur again.

But importantly, this wave of digitization will attract more excellent founders with real constructive abilities to join, which could be a turning point in the trend, leading to the emergence of more outstanding on-chain products.

We have seen some success stories: certain projects have achieved annual revenues in the billions of dollars, the total value locked (TVL) of stablecoins has reached hundreds of billions, and net deposits have reached trillions. Some projects have even achieved significant success in the real economy, such as selling millions of merchandise worldwide. All these projects are supported by on-chain tokens.

As the number of quality projects and founders increases, the market's attention towards low-quality projects will decrease, shifting towards those that can achieve compound growth.

We can discuss whether these projects are overvalued or undervalued, but such discussions are much more meaningful than pure speculation. I would rather own something tangible than participate in a game of "musical chairs."

If we always regard every token as a "meme", we may miss important opportunities. In the future, there may be more high-quality projects issuing tokens on the chain. Some of these assets could ultimately become on-chain giants that dominate the financial future. We all have the chance to participate in this. Simply categorizing it as "just a meme" might miss out on potential high-return opportunities.

This is the evolution of speculative methods: we have progressed from trading assets that lack substantive value to today, where we can truly possess tangible, durable, and significant on-chain assets that may shape the future world.

It's time to regain faith, break free from the shackles of the past, and reshape dreams. The future is full of hope, don't let the shadows of the past cloud your optimism for the future.

This is the future in my eyes: the integration of the internet, capital, and the market.