Source: Garfield
Yesterday, I mentioned this concept in the $STONKS community space, and I should be the first blogger in the Chinese-speaking community to clearly analyze this concept. As someone who has long been engaged in web2 private equity investment funds and a web3 free trading token investor, I often feel a sense of disconnection as if I'm in a parallel universe.
Why is it that in web2, investing hundreds of thousands of RMB in startup companies makes you a wealthy investor, while in web3, investing hundreds of millions in VC and AI tokens leads to being mocked as 'leeks' by project parties? Quality enterprises can't secure millions of RMB in financing in reality, while trash PVP and celebrity tokens can crazily rake in tens of millions of dollars on the blockchain.
Let me state the conclusion first:
The main contradiction in blockchain investment is the situation of spending money without having the rights.
The power of equity and token rights is unequal.
So why does this situation occur? Why do web3 projects have both equity and tokens?
Equity governance, as the corporate governance structure of web2, has become the mainstream business model in today's world. Through layers of commercial financing and strategic financing, investors hold voting rights to decide the development direction of the company.
Token governance, as the project governance structure of web3, is usually established by the project parties through issuing tokens to set up a voting mechanism. However, this mechanism is virtually nonexistent, and token governance is nominal. The project entities are still controlled by a few people, and many project parties still have company entities in web2, having gone through multiple rounds of financing before issuing tokens, which are commonly referred to as VC tokens. Regardless of whether these projects are blockchain infrastructure, protocols, platforms, or even MEME, all operational profits obtained by the project will still be prioritized to be distributed as dividends to investor LPs. Meanwhile, equity investors can not only receive dividends from the company's operational profits but also sell tokens to cash out.
In simple terms, equity investors control risks to the maximum extent while having various betting agreements, seeking the greatest benefits with minimal risks. In contrast, you token traders can only watch Twitter every day, trying to please Twitter operators to get some good news and votes. Have you ever heard of companies holding shareholder meetings for decision-making? Where have you heard of token project parties forming decision-making committees for token holders?
As the saying goes, harvesting 'leeks' doesn't require flashy tricks; people in the token sphere will willingly offer themselves up. In web3, there are very few projects that achieve equity-token equality. Some MEME tokens only have hype without an ecosystem, failing to generate profits and positive cycles, while some DAO governance tokens also cannot completely escape the exploitation of equity investors and cannot participate in important decision-making.
From the moment VC tokens were born, their fate was already sealed.
— The feast of spoils among LPs, project parties, and exchanges.
Currently participating in $STONKS because we are moving forward on the path of equal rights for stocks and tokens. Everyone holds chips that are purchased, there is no such thing as LP. In the future, the community members will be elected to establish a decision-making committee. In five years in the blockchain, I have not seen similar projects. If there are, please comment below, and I will research them.
May all 'leeks' make money 🫡