The 2017 crypto boom saw projects come and go in droves, most of them lacking a genuine product or service. In their place, they offered nothing but logos and concepts, providing investors with scant value.
The Hype and Empty Promises of 2017 Crypto Projects
Coin Bureau puts it plainly: the over $20 billion raised during that period was often secured with little more than a whitepaper and some branding. Rather than producing something that worked, these ventures were content to sell a vision that would never come to pass. It is easy to see why so many investors were swept up in the fervor and put their money into operations where marketing trumped substance.
Then there was the matter of the tokens themselves. Early on, they amounted to little more than voting rights while the platform’s actual fees were siphoned off. When such projects finally folded, as they were wont to do, holders were left with assets of no worth due to the chasm between token price and any real utility.
Repeating Mistakes: DeFi and Terra’s Anchor Protocol
DeFi initiatives made an effort to show they had practical applications in the real world by 2020. Yet, as the host of Coin Bureau would point out, for a number of them this was little more than a facade; free tokens were handed out to keep users on board in lieu of any actual utility. It was the same old story, with projects still failing to put together a business model that could hold up over time.
Take the Anchor protocol from the Terra ecosystem, for instance. In 2022 it enticed participants with the promise of a steady 20% yield, an offer that was not built to last. The eventual implosion of the system left tens of billions in the dust and served as a stark reminder of what happens when returns are nothing but fiction without the economic backing to support them.
Shift in Investor Expectations: Demand for Real Cash Flow
What smart money is looking for has been put in a different light by the string of flops from 2017 crypto and the DeFi ventures that followed. Today’s investor wants to see substance: real business models and cash flow, as Coin Bureau would have it.
Take Tether. Last quarter alone it put $1.5 billion in net profit on the books from interest on its assets, which is value you can point to and back with hard revenue. Then there is Hyperliquid, having made $400 million so far this year and putting 99 percent of those trading fees to work buying back and burning tokens for the benefit of holders. Uniswap has done much the same after five years of operation, instituting a token burn to bring the protocol and its users into alignment. It is all part of an obvious turn in the industry toward creating value and being more transparent about it.
Every call by Coin Bureau and how it played out — in the BuyCrypt bloggers tracker.
Source — Coin Bureau: https://www.youtube.com/watch?v=duynn3HcZJ0
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