Encryption "Speculation" Evolution Theory: Entering the "Mature Era" Market, From Speculation to True Holding

Original author: @0xkyle__

Compiled by: Zen, PANews

The term "Internet Capital Market" encompasses many meanings. In today's context, the Internet Capital Market refers to the "alchemy" results born purely from the advantages of blockchain technology: financial technology that ignores geographical boundaries. You can use "magical internet currency" for lending, tokenize treasury bonds and private credit, issue stablecoins - in today's world where traditional finance meets digital assets, all of this is referred to as the "Internet Capital Market."

But for veterans who have lived and breathed this asset class in the on-chain trading field, the meaning of the internet capital market is not just "on-chain treasury bonds" — it refers to NFTs, DeFi, ICOs, and various speculative tools invented over the past decade, as well as tokens that have been tradable since the deployment of the first smart contract on Ethereum in 2015.

This article aims to focus on the original logic behind cryptocurrencies, narratives, tenfold, hundredfold, and airdrops, analyzing this aspect of the internet capital market. We are about to welcome a "new meta" spoken of by OG crypto players. To analyze this, we must first observe these capital formation mechanisms and the differences they bring.

Evolution of Market Financing Mechanisms

Looking back at the past few cycles, we see that the market financing mechanisms are constantly changing. From ICOs to centralized exchange altcoins (CEX Alts), and then to meme coins... The above chart summarizes this, which can be briefly summarized as:

Original ICO (2010s)

In this mechanism, funding is based on the "commitment" of the project party, with the aim of selling to larger "fools." The technology is often not truly usable or offers no real value addition. Most of the time, it is a game of "passing the parcel." Typical cases include Bitconnect, Dentacoin, and others.

VC Paradise (2021 Bubble Period)

This wave has attracted institutional capital, but looking back, it has caused great harm to the industry—outrageously high valuations and poor incentive designs (who would still work with a hundred million dollars?). However, this wave has also brought more reliable products—so it can't all be dismissed. Although inflation valuations are severe, many of the protocols you love today were born from this. Take Ethena as an example: I really like it, but the mechanism of "giving too much too early" has indeed harmed its early performance in "token appreciation"; however, it is undoubtedly one of the best crypto products currently available. This is also the era of the rise of projects like Solana and Uniswap. Even today, there are disagreements about their governance or operations, but it is undeniable that not everything is entirely terrible.

Dual Polarization

Extreme regression After the collapse of FTX, the crypto field is facing an existential crisis—distrust is spreading, and many have begun to believe that "everything is a scam." I once thought so too, but it is necessary to see the subtle differences within. While it may seem like a casino, not everything is a casino—stablecoins and tokenization are uncovering tremendous value in real scenarios, and not just issuing memes or trading pairs with the dollar as a niche asset. At this stage, pure memecoin projects like dogwifhat and pepe have emerged, along with more "serious" narratives, such as AI agents. With valuations significantly dropping, you might ask, "Is it all just memes?" But in reality, it's not that once labeled as "meme," it is destined to remain at that label stage. Maturity is a slow process; some projects have already transitioned from "label" to "serious," like REI.

The Integration of Legitimacy and the Digital Market

We are entering the "adult era" - institutions are coming, and we truly remain excited. But having been in the "factory" for a long time and seeing through the process of "how sausages are made," we can't help but hold a pessimistic view on the Circle IPO.

Knowing too much has ironically become a curse—everything is labeled as a "meme," which only leads you to lose faith. Looking at Ethereum again: it has been the worst-performing asset over the past two years, with many heavy investors cutting their losses and the media continuously singing its demise.

But look at the current situation: do you think Tom Lee knows (or cares) about the embarrassing video of the Ethereum Foundation leadership singing and dancing on stage? Do you think institutions like BlackRock, which launched tokenized funds on Ethereum, care about the "soy-boy mentality" of the Ethereum Foundation?

The answer is no, and this is something you must internalize. Most cryptocurrencies have forgotten how to "dream," while traditional finance is learning to "dream" again. This will bring more opportunities— as digitization and mainstreaming progress, there will be more and more high-quality builders getting involved.

The future landscape of the internet capital market

This is what I call the internet capital market. We are entering an unprecedented period of prosperity over the past five years – a perfect combination of regulation, technological strength, and capital, a significant portion of which will happen on-chain. I am not joking when I say that I believe some of the most valuable companies will issue tokens on-chain in the coming years.

In fact, this is already happening. Hyperliquid is the pinnacle representative of the internet capital markets. It has not accepted VC investment, nor does it have equity burdens, but is purely a chain-based token project that was originally not listed on exchanges.

Let me emphasize once again: Hyperliquid was once a company with a market value of $40 billion, without any roadshow materials or the burden of equity structure. This purely on-chain giant took a dominant market position as soon as it emerged and is now on its way to achieving an annual revenue of $1 billion – from zero to one. It is the purest embodiment of the operation of the internet capital market.

But please don't get me wrong, this is not me praising Hyperliquid. I believe there will be more cases like this in the coming years. Isn't it exciting? We are moving towards a prosperous era—don't let your cynicism stifle the dreams of the past. Sadly, this is obvious to many, yet they are busy chasing some random garbage coin for a 50% return because that's what we've been trained to do over the past four years. It's time to have bigger dreams—the script is already written.

Today, the shackles that bound us no longer exist. People have been constrained by past structures for a long time — but in the era of the internet capital market, owning 5-10% of your own currency and turning it into a product valued at $100 million to $1 billion, the returns will far exceed people's expectations.

Yes, financing is still necessary, and ICOs are not without merit. But looking at Hyperliquid's path: if you have confidence in the product, issue on-chain tokens, retain a sufficient share, and then let the market, the true arbiter of value, determine worth. What is the problem with capitalism? It makes participants too short-sighted. It indeed drives innovation in the right direction, but fails to truly promote innovation. Too many people are satisfied with quick money and miss out on the greater returns brought by long-term compounding.

Of course, you can earn 10 million dollars by developing a product and then abandoning it, or you can spend a few more years developing the product to earn 300 million dollars.

Conclusion: From speculation to true ownership

Finally, let's talk about the speculative nature of the market. In the short term, the market is undoubtedly still a voting machine — "worthless" asset prices can rise, and the prices of "good assets" can exceed their intrinsic value; team sell-offs may also occur again.

But the key point is that this wave of digitalization will attract more excellent and truly constructive founders to enter the field. I believe this is the turning point of the trend, which will give rise to more outstanding on-chain products.

Think about that schematic: it will never go to zero, but it doesn't have to go to zero either. Look at Hyperliquid, Ethena, Aave - they all have an annualized income of 1 billion, stablecoin TVL reaching 10 billion, and net deposits of 60 billion. Look at Pengu, Rekt - a total of 197 trillion views, 2 million merchandise sold globally, and even drinks available at 7-11 convenience stores across the US. They all have on-chain token backing.

We can argue whether they are overvalued or undervalued, but I would rather discuss this than go back to an era where one could only buy empty promises. An era where we were forced to purchase the assets of companies that sold promises but delivered no results. I would prefer to have something tangible rather than pretending to play a game of hot potato.

If you always treat every coin as a "meme", then you are wasting opportunities. Tokens issued by projects like Hyperliquid are no longer a fantasy. The next Steve Jobs could very well issue a token on-chain. Some of these assets will ultimately become the giants that dominate the future of finance on-chain. And we all have the chance to buy it. Reducing it to "just a meme" is a great way to miss out on astronomical returns.

This is the evolution of speculation: we have moved from trading worthless air to today, where we can finally truly own solid, durable, and most importantly, on-chain assets that will determine the future world.

It's time to regain faith, forget the shackles of the past, and reshape dreams. The future is bright, don't let the shadows of the past obscure your optimism for the future.

This - is the future in my eyes: Internet. Capital. Markets.