The Fate of Large Financing Projects: From High Opening to Low Walking

Recently, several well-known projects have launched their tokens one after another, but the market response has generally been tepid. Taking LayerZero as an example, despite raising $260 million and having a valuation of $3 billion, its price performance has been poor after launch. Even though there has been a slight recovery recently, the retail buying price is still lower than last year's venture capital investment price, and 90% of the tokens have not yet been released.

Similar to LayerZero, Zksync is also facing challenges. In 2022, Zksync became the focus of the industry with a single round of financing of 200 million USD. However, two years later, zk technology has become widespread, and after its launch, the token price of Zksync has continued to decline, with a market cap of only over 3 billion USD. Its airdrop strategy has also sparked controversy, which may affect future development.

Another zk project, Aleo, raised $200 million in funding in 2022 with a valuation of $1.45 billion, but has not issued tokens to date. Considering that it still needs to sell mining machines, the project team may have the incentive to maintain the token price; the key question is whether the funding from two years ago is sufficient to support this.

Historically, large-scale financing projects often have poor outcomes. Among the 9 projects that raised over $500 million, only 3 issued tokens, and all of them broke below their initial offering price. EOS raised $4 billion, but its market value is now only a quarter of what it was at that time. Terra and FTX ended in disaster, with their founders imprisoned.

Undistributed token projects are also facing numerous challenges. Forte, which raised nearly $1 billion, has gone silent despite the booming gaming ecosystem. The NFT project Sorare, despite having the authorization of many star players, also cannot escape the fate of layoffs during the market downturn.

In contrast, institutional service providers like NYDIG and Fireblocks have shown relatively stable performance, but they have also not completely avoided issues such as layoffs. Among these large financing projects, perhaps only the payment service provider Moonpay has performed better due to its stable business model.

In contrast, successful projects like Ethereum and Solana had relatively small initial funding sizes. This phenomenon seems to confirm that in the cryptocurrency field, high valuations and large-scale funding do not necessarily mean success; on the contrary, they may become a burden for future development.