The Fate of Large Financing Projects: A Warning for Industry Development

Recently, several well-known projects have completed financing and launched trading. However, the market reaction has not been as expected. Taking LayerZero as an example, despite raising as much as $260 million and seeing its valuation rise to $3 billion at one point, its performance post-launch has been mediocre. Even though there has been a recent uptick, its price is still below the investment price from last year's venture capital, and 90% of the tokens have yet to be released.

Similar to LayerZero, Zksync also faces a similar predicament. Once a highly anticipated project, Zksync raised $200 million in a single round of financing in 2022. However, as the technology became more widespread, its uniqueness gradually diminished. After going live, the token price continued to decline, and its current market capitalization is just a little over $3 billion. The controversy surrounding the project's airdrop strategy may also impact its future development.

Another highly watched project, Aleo, raised $200 million in 2022 with a valuation of $1.45 billion, but has yet to issue its token. Considering it still needs to sell mining machines, the project team may have some incentive to pump the price, but the remaining status of the funding is still unknown.

Throughout history, projects that raised more than $500 million often had poor outcomes. Among the three projects that have issued tokens, EOS raised $4 billion, but its current market value is only $1 billion. Terra and FTX have faced difficulties for various reasons, resulting in significant losses for investors.

Projects that have not issued tokens also face challenges. Projects like Forte and Sorare, which once thrived, are now significantly less prominent. Some B2B projects like NYDIG and Fireblocks are still operating, but there are reports of layoffs, and their development prospects are uncertain.

Among many large financing projects, Moonpay may be the best performer. It has been profitable since 2019, with revenues exceeding $150 million in 2022. However, due to the nature of its business, Moonpay has chosen not to issue tokens but is considering an IPO route.

In contrast, looking at the early financing situations of some successful projects, Ethereum raised just over ten million dollars, and Solana only raised twenty million dollars before its token launch. These cases suggest that the success of a project is not necessarily proportional to the scale of its financing.

Overall, the development of the cryptocurrency industry cannot succeed solely based on large amounts of funding. Real application scenarios, reasonable development strategies, and moderate financing scales are the key factors for the long-term development of projects. For investors, buying low and selling high remains the core strategy for profit, rather than blindly following overvalued projects.