Reflecting on the era of encryption gold: the frenzy of wealth creation has passed, and now there are no opportunities for foolish money.

Author: IcoBeast

Compiled by: Deep Tide TechFlow

In the nearly past decade, a notable feature of cryptocurrencies (not specifically referring to Bitcoin) is that any ordinary person with internet access, some free time, and about six functioning brain cells can quickly turn a small amount of money into a large fortune.

Since 2016-2017, the cryptocurrency industry has experienced three to four widespread “gold rush” cycles. The common feature of these cycles is that the price of a mainstream asset on a certain blockchain is extremely low, but it has enormous compound potential, and the value of this asset then skyrockets.

Every time, the “dumbest person” you know in this industry makes jaw-dropping money, and then they tell their friends, who bring in more people. After all, “if that fool can turn $100 into $100,000, why can't I?”

Let's take a moment to reflect on these historic wealth creation moments…

Reviewing history

2017 - ICO Boom (After Ethereum ICO)

In my opinion, this is basically the “golden age” of the crypto industry. A new project appears almost every day, accompanied by a white paper and a cool gradient logo. Although these projects have almost no practical functionality, everyone is still rushing to invest their ETH for allocations. Subsequently, these tokens are listed on exchanges, and people in the market flock to buy the new tokens, causing the prices to soar rapidly. You can make a lot of money and then exchange the profits back to ETH.

ICO Boom: The Chart Says It All

That was really great. At that time, there were only about 100-200 types of tokens in the market, but in reality, none of them were truly usable or had any real significance. Everyone's operation was simply to brutally throw ETH into various ICO projects and then earn back a large amount of funds—this was simply “giving away money.” Everyone was trading those few fixed tokens, with the goal of accumulating more ETH… this process was very simple. People would also share this “wealth code” with friends, and friends would join in one after another. However, in the end, we all learned a lesson from the market; the crypto market began to collapse, followed by a bear market that lasted for two whole years.

2020-2021: The frenzy of DeFi's “yield farming + food Ponzi schemes”

I personally did not participate much in this wave of excitement (due to real-life matters), but its essence is the first launch of some “real” DeFi products (kicked off by the distribution of Compound's COMP token). This has spawned various liquidity mining games and Ponzi schemes… Everyone is once again rushing into a small selection of tokens, with the goal still being to maximize their ETH holdings.

Many early Crypto Twitter celebrities seized the opportunity to emerge during this phase. At that time, the market attracted a large influx of new capital because no one really knew how to play the game, and the tools for maximizing profits had not yet become widely available. Additionally, the price of ETH began to rise rapidly, further boosting everyone's profit and loss statements (PnL), while attracting more “speculative” funds into the market.

2021-2022: The Crazy Era of the NFT Bubble

Once upon a time, the pandemic brought the world to a halt, and people received subsidy checks from the government while losing their jobs (or their businesses were forced to shut down), so they spent all day on Clubhouse and Twitter Spaces.

At this moment, a group of people started minting NFTs. Among them, Bored Apes became the “king of minting” in the industry (even though its minting time was long enough for anyone to participate). With the success of Bored Apes, the floodgates of the market were completely opened. You could mint the most terrible-looking picture for 1 ETH, and then wake up the next day to sell it for 20 ETH… then its price would skyrocket to 50 ETH. None of this made any sense; no one really wanted these JPEG files, and no one truly believed they were worth these outrageous prices. But everyone wanted to make money and continue playing this game.

This crazy wealth effect allows people to flip a few images with a small amount of ETH, ultimately accumulating a large amount of ETH… almost without any skill, just because “they are in the game.” This has clearly attracted huge attention, and NFTs quickly moved into the mainstream. However, the bubble eventually burst, and most participants ended up being eliminated by the market.

This wealth effect was briefly replicated during the Ordinals craze in early 2023. At that time, the price of Bitcoin plummeted, and early Ordinals became a crazy “cooking” opportunity: you could quickly double a small amount of BTC into a large amount of BTC. Subsequently, the price of Bitcoin experienced a parabolic surge. (And those who clung to their JPEGs ultimately got “liquidated” by the market.)

January 25, 2023: The Wealth Frenzy of Meme Season

It can be said that this may be the longest wealth creation period during the “dumb money” cycle of cryptocurrency - the meme coin frenzy of ETH and Solana. Strictly speaking, it all traces back to the explosive rise of BONK after the FTX collapse at the end of 2022, but I prefer to view the true starting point as the rise of PEPE (based on ETH) in April 2023 and WIF (based on SOL) in November 2023, which initiated over a year of crazy token market.

These completely useless, unplanned, and only “atmospheric” air coins have skyrocketed in market value to several billion dollars. Especially in the early days, you only needed to casually buy a random token worth a thousand dollars, and you could almost guarantee waking up the next day with a 10-fold return… and this kind of operation could last for several weeks.

As time goes by, the games are becoming increasingly difficult: robots are getting smarter, arbitrage tools are becoming more efficient, and developers' ability to cash out when they “run away” is getting stronger, raising the overall participation threshold. People are starting to withdraw money from the “casino” instead of continuing to throw money in after seeing friends make $20,000 in 17 minutes using tokens like “pepefartsockinu69420.” Meanwhile, new trading pairs emerge every day, and you keep accumulating more ETH or SOL through these trades.

Then, the “9/11” event of Meme coins happened. TRUMP, MELANIA, plus the final nail in the coffin - Hayden Davis's LIBRA. This changed the rules of the game. Everyone vaguely understood that this game had already been “cooked”. When one party can steal over 100 million dollars from the “collective fund pool” in a second, the game is no longer worth playing… After all, what could be crazier than the U.S. president secretly issuing a token and having its market value soar to 70 billion dollars FDV (Fully Diluted Valuation) overnight?

This is the situation we are in today. About 9 months have passed since that “fatal blow.” Although there have been some outstanding opportunities during this period (especially since April, mainstream assets have performed well), there has been no event that could rapidly multiply native tokens or mainstream assets and significantly appreciate in value.

To be honest, I also don’t know if this situation will happen again. NFTs? They have already been “cracked”—now there are probably only 17 people left in the world who still want to trade or flip NFTs. Meme coins? They have also been “cracked”—becoming a 24/7 token deployer is clearly safer and simpler, and you can profit without any risk. On-chain Ponzi schemes? Everyone basically understands this now… only those “sharks” are still playing, and you must choose your exit timing very precisely, otherwise you will be devoured. Maybe ICOs will make a comeback? Monad is performing well. We will wait and see.

In the past year, we have hardly seen any simple wealth creation opportunities driven by “dumb money.” This is why everyone is so angry. They have become accustomed to always catching a wave of such trends, while over the past 9 months, we have only seen desolation (unless you hold a large amount of mainstream assets, especially Bitcoin).

Recently, I mentioned on the timeline that the current on-chain offerings haven't particularly inspired me, and much of the content feels somewhat outdated. However, some teams building interesting “new” things have reached out to me, and I plan to dive deep into their prototypes and document my tests and findings (of course, there will also be plenty of updates related to Kalshi crypto).

One of the teams is @zigchain, and they want to sponsor this article of mine—this is actually content I intended to write a few weeks ago.

They are building a platform described as an on-chain version of “Wall Street,” offering tokenized RWA (Real World Assets) yield products. These products are designed to allow ordinary users to access higher-yield investment opportunities with a lower capital threshold, no longer limited to the high barriers of entry that have traditionally been unfriendly to retail investors.

Although I have a long-term positive view on RWA (such as equity perpetual contracts, tokenized stocks, etc.), I am generally skeptical about the RWA-related projects that have emerged in the current market. However, the @zigchain team claims that their first application (Zignaly) already has over 400,000 real users, so I plan to try it out personally to see how their product performs.

As for whether RWA products can bring us that kind of ultimate wealth creation opportunity that we are missing, who knows? But I am ready to return to the “theoretical trenches” to try new things again and share my experiences. It has been too long since we had such exploratory content; we need more content that stimulates interest and curiosity to appear on the timeline.

If you have read this far, thank you for your patience. I really appreciate it—I still think one of the coolest things in the world is that there are a group of people online willing to take the time to read what I write. I hope this article brings you some value (whether it’s entertainment or otherwise), and there will be more content to share with everyone soon.