Original author: @0xkyle__
Translated by: Zen, PANews
'Internet capital markets' encompasses many meanings. In today's context, internet capital markets refer to the 'alchemy' results born purely from the advantages of blockchain technology: fintech that disregards geographic boundaries. You can borrow using 'magical internet currency,' tokenize treasury bonds and private credit, issue stablecoins—in the world where traditional finance and digital assets intersect today, people refer to all of this as 'internet capital markets.'
But for those veterans who have been born and died 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 all sorts of speculative tools invented in 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 coins, narratives, tenfolds, hundredfolds, and airdrops, analyzing this aspect of the internet capital market. We are about to enter a 'new metaverse' as referred to 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 the market financing mechanism constantly changing. From ICOs to centralized exchange altcoins (CEX Alts), and then to meme coins... the above diagram has summarized it, and it can be briefly summarized as:
Original ICO (2017 era)
In this mechanism, funding is based on the project party's 'promises,' with the aim of selling to bigger 'fools.' The technology is hardly real or usable, or it yields no value. Most of the time, it's a game of 'hot potato.' 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— valuations have been ridiculously high, and incentive designs are poor (who wants to work with a hundred million dollars?). However, this wave has also brought more reliable products—so it shouldn’t be entirely dismissed. Though inflationary valuations are severe, many of the protocols you love today were born from it. Take Ethena as an example: I really like it, but its mechanism of 'giving too much too soon' has indeed damaged its early performance of 'token appreciation'; however, it is undisputedly one of the best crypto products available today. This is also the era of the rise of projects like Solana and Uniswap. Even if there are disagreements about their governance or operation today, it cannot be denied that it has not all been bad.
Bipolarization
Extreme regression After the FTX collapse, the crypto space is facing an existential crisis—distrust is spreading, and many have begun to believe that 'everything is a scam.' I was once like that, but it's important to see the subtle differences. Although it resembles a casino, not everything is a casino—stablecoins and tokenization are uncovering immense value in real scenarios, not just sending memes or trading dollars as niche assets. At this stage, pure memecoin projects like dogwifhat, pepe, and more 'serious' narratives, such as AI agents, have emerged. With valuations significantly dropping, you might ask, 'Is it all just memes?' But in reality, just because something is labeled a 'meme' does not mean it is doomed to remain at that label stage. Maturity is a slow process; some projects have transitioned from 'label' to 'serious,' like REI.
The combination of legitimacy and the digital market.
We are entering the 'adult era'—institutions have arrived and are genuinely excited. But after being in the 'factory' for a long time and seeing 'how the sausage is made,' we cannot help but hold a pessimistic view of Circle's IPO.
Knowing too much has become a curse—everything is labeled a 'meme,' which will only make you lose faith. Look at Ethereum: it was the worst-performing asset over two years, and many heavy investors cut their losses, with the media continuously singing its demise.
However, 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 Ethereum Foundation's 'soy-boy mentality'?
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' once again. This will bring more opportunities— as digitization and mainstream integration progress, more high-quality builders will dive in.
The future landscape of internet capital markets
This is what I refer to as the internet capital market. We are entering an unprecedented period of prosperity in the past five years—a perfect combination of regulation, technical prowess, and capital, with a significant portion happening on-chain. I’m 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 internet capital markets. It did not accept VC investment, nor did it carry equity burdens, but is purely an on-chain token project that initially was not listed on exchanges.
Let me emphasize again: Hyperliquid was once a company valued at 40 billion dollars, without roadshow materials or equity structure burdens. This purely on-chain giant took the market by storm upon its appearance and is now heading towards an annual revenue of 1 billion dollars—from zero to one. It represents the purest embodiment of internet capital market operations.
But please do not misunderstand, I am not promoting Hyperliquid. I believe that in the coming years, there will be more such cases. Isn't it exciting? We are moving towards a bountiful era—don't let your cynicism stifle your former dreams. Sadly, this seems obvious to many, yet they are busy chasing a random garbage coin for a 50% return, because that's what we have been trained to do over the past four years. It's time to have bigger dreams—the script has already been written.
Today, the shackles that bound us no longer exist. People have long been trapped by past structures—but in the era of internet capital markets, having 5-10% of one's own currency and building it into a product worth 100 million to 1 billion dollars will yield returns far exceeding people's expectations.
Yes, financing is still necessary, and ICOs are not without merit. But looking at Hyperliquid's path: if you are confident in the product, issue on-chain tokens, retain sufficient shares, and let the market, the arbiter of truth, determine the value. Where is the problem with capitalism? It shortens participants' vision. It indeed pushes innovation in the right direction but fails to truly drive innovation. Too many people are satisfied with quick money, missing out on the greater returns brought by long-term compounding.
Long-term thinking often leads to geometric rather than arithmetic results— for example, doubling in 2 years, increasing 5 times in 4 years, and increasing 10 times in 5 years.
Of course, you can develop a product and then abandon it to make 10 million dollars, or you can spend a few more years developing that product to make 300 million dollars.
Conclusion: From speculation to true ownership
Lastly, 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 will rise, and 'good assets' prices will also surpass intrinsic values; team sell-offs may occur again.
But the point is, this wave of digitization will attract more excellent and truly constructive founders to enter the field; I believe this is the turning point of the trend that will give birth to more outstanding on-chain products.
Think of that diagram: it will never go to zero, but it doesn’t need to go to zero either. Look at Hyperliquid, Ethena, Aave—they all have 1 billion in annual revenue, stablecoin TVL reaching 10 billion, and net deposits of 60 billion. Look at Pengu, Rekt—totaling 197 trillion views, with 2 million pieces of merchandise sold globally, even on shelves in 7-11 convenience stores across the U.S. They all have on-chain tokens backing them.
The more S/A level projects/founders there are, the less attention is paid to C-level and below founders—less focus on vaporware and similar projects, and more attention to projects that can achieve compound growth.
We can debate whether they are overvalued or undervalued, but I would rather discuss this than return to an era where one could only buy empty promises. An era where people were forced to purchase corporate assets that peddled promises but delivered no results. I would rather own something tangible than pretend to play a game of hot potato.
If you always treat every coin as a 'meme,' you are wasting opportunities. Tokens issued by projects like Hyperliquid are no longer a pipe dream. The next Steve Jobs may very well issue tokens on-chain. Some of these assets will ultimately become on-chain giants controlling the future of finance. And we all have the opportunity to buy them. Reducing it to 'just a meme' is a great way to miss out on thousandfold returns.
This is the evolution of speculative methods: we have moved from trading worthless air to today, where we can truly own solid, durable, and most importantly, on-chain assets that will define 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.