Opportunities amidst primary market turbulence: How non-traditional VC projects stand out

Author: Rui Source: @YeruiZhang

Nothing to do on Christmas Eve, just chatting

For the primary market and project developers, this cycle is the most difficult version. Most of the investment logic inherited from the previous cycle has failed, such as following the ETH foundation, such as following the big VCs. Before April, the community priced the project based on TVL and which VC backed it, how much the project invested by A16Z was worth, and how much TVL could match the level of Infra project, but the pricing logic of these communities completely collapsed after April. When the community that takes over does not know what price to take over, the strategy formulated by the investment institution based on the consensus of these takeovers is completely invalid.

The most successful project in the first half of the year is ENA, which is the last beacon in the era of VC-dominated consensus. ENA is both the chosen one and the only one. It has basically not experienced any hardships since its birth. It got TVL at the best time, cooperated with Pendle at the best time to start leveraging through DEFI, and was listed at the best time. At the end of the first quarter and the beginning of the second quarter, it was at the critical period of turning from bear to bull, and then quickly bottomed out and rebounded. In addition, all other projects are still digesting the pain brought by the withdrawal of vested interests.

So when the original mechanism did not work, the market's gameplay began to shift:

With the collapse of the pricing system, a group of non-mainstream developers are snatching the resources originally allocated by the vested interests.

The two versions of this cycle, Hype and Virtual, are the best examples of this trend, and they are both examples of accumulation and development. Everyone knows that Hype has increased nearly 10 times in one month, but everyone does not know that Hype's OI did not exceed 500M before August. Everyone knows that Virtual stepped on the beachhead of the AI ​​wave at the end of October, but everyone does not know that almost no one was optimistic about them when they just transformed into AI in April. Both projects have experienced a long period of pain, and they have also found the most suitable teammates during the pain period.

The total resources of the market are limited, in other words, the cake is so big. For traditional VC projects, because there are more people to share the cake, it is necessary to cut it carefully, because if you are not careful and fail to take care of the interests of some parties, the result will be a car crash and death. For these non-mainstream developer projects, because they are not valued in the initial stage, the team is willing to share the cake, and the part of the cake that can be shared is also relatively large. Similarly, because the people who eat the cake are selected during the pain period, they have some faith and are unlikely to retreat after eating everything. This is not an obstacle in the subsequent rise. Founders need to achieve 100% in a certain aspect, rather than doing projects with the idea of ​​arbitrage, so that they are more likely to succeed in this cycle.

ENAIt is difficult to have a version based on the consensus of the whole market, but the opportunity for developers who have accumulated a lot of experience has just begun.

Xterio is a very interesting project. There are many stories about this project. The source is that Binance lab announced that it invested 15M at the beginning of the year. In that era, this was a king bomb. It was backed by top VCs, started by awesome game circle bosses, and was Binance's favorite game track. It was like a through train script. But when everyone thought there would be no accidents, accidents happened. Because of the poor performance of several garbage game projects, the listing of coins in the entire game track stagnated, and the chosen one fell into the mortal world.

For a while, the whole world was Fud Xterio. The NFT prices of the two sub-games released before plummeted, the chain problems were frequent, the team left, the investors turned against it, and a lot of bad news happened in two or three months (a digression, this is Crypto, when you are doing well, everyone will lick you as a father, when you are not doing well, everyone will step on you as a son). Generally, the team will start to play badly at this time, but Xterio did not give up.

To be honest, I don’t know where the turning point is, but the current situation is that the team has survived Fud and is also going to issue coins. Although the popularity is much lower than at the beginning of the year, let’s look back at the fundamentals. Binance lab’s investment has not been withdrawn,Founder’s resources and connections in the game circle are still there, and in addition to games,AI’s narrative has been added, and the most important narrative of attracting new users in this cycle is what they are best at. Michael is a serial entrepreneur. He worked for Openrice, a Hong Kong Dianping app. He was involved in NetEase and Funplus in the early days, and has been dealing with distribution and traffic. How to bring in high-value traffic and convert it reasonably should be easy.

Xterio has undoubtedly experienced a lot of accumulation, and I can't give an answer for the time being whether it can flourish. The success of the coin issuance event is full of too many unknown factors, and it may be attributed to luck in the end. I agree with @qiqileyuan on this point. @fat_leopard never doubted that he would succeed from the first time I met him, because his face is so good.