If you are still hoping for altcoins, this data might shatter some illusions.

According to Dune dashboard data compiled by @cgrogan, the number of crypto tokens has surged from over 3.4 million in 2022 to more than 39 million in 2025. In 2024 and 2023, the crypto market created over 10.09 million and 18.7 million tokens, respectively.

In stark contrast to this explosive growth in altcoins, the number of crypto developers has declined instead of increasing. Electric Capital’s Crypto Developer Report shows that the total number of crypto developers dropped by 7% in 2024 and 24% in 2023.

The crypto market has long since become an unabashed “token factory,” where innovation is now mostly limited to new token models and gambling mechanisms rather than fundamental paradigm shifts.

Behind the illusion of fairness and overnight wealth lies an extremely low cost of malicious activity and a large number of defrauded retail users. In the long-term PvP environment, all major participants, including users, have been conditioned to become smart short-term opportunists.

Leave or Wait for a Turnaround?

Yesterday, the crypto fear and greed index dropped to 10, its lowest level since June 2022. @ZKSgu refuted calls for external intervention in crypto, stating, “Even those inside the market can barely stay.”

Exchanges and VCs, the most criticized participants in this bull cycle, are now either looking for exit opportunities or being forced out.

Long-established crypto derivatives exchange BitMEX is seeking a sale. According to sources cited by ChainCatcher, the largest crypto options exchange, Deribit, may have already finalized an acquisition deal worth up to $5 billion.

It’s not just exchanges—crypto is seeing a wave of mergers and acquisitions. According to RootData, nearly 30 M&A deals have taken place in the crypto space in just the first two months of 2025, averaging about 15 per month.

Many VCs are facing elimination. At Consensus HK, YettaS noted that the VC landscape was filled with despair—some VCs failed to secure their next round of funding, some lost half their team, others pivoted to strategic investments instead of independent investing, and some even considered launching a meme coin to raise funds.

Meanwhile, investor @26x14eth is advising young people not to waste their most valuable resource—time—chasing gold in crypto. Instead, he suggests exploring internships in high-potential sectors like AI and robotics. The days of easy money from 2017 to 2021 are over, and today, time is the most valuable asset.

However, some are still waiting for a turnaround. Crypto KOL @cmdefi remains less pessimistic, comparing the current market to 2018-2019, when the ICO bubble burst and many believed the industry was dead, full of scams.

“But then DeFi Summer came in 2020. With less speculative capital, the market focused more on application innovation. Stay in the game.”

Assembly-Line Token Creation Is Draining the Market.

This bull cycle has been brutally difficult.

There’s hardly any exciting crypto innovation to be seen. From Trump sparking a celebrity token frenzy, to Pi Network getting listed on major exchanges, and now Safe suffering a hacker attack—only now are people waking up to the absurdity and fragility of the crypto system.

A chart illustrating the current state of the crypto ecosystem by overseas KOL @sherlock has resonated with the market, showing that while crypto infrastructure remains shaky, conspiratorial groups are everywhere.

In this bull cycle, making money has become even harder.

Players who survived the last bull market may find it especially painful. Binance, once the birthplace of wealth myths, has turned into a dumping ground for projects and meme coins. The so-called “alpha” phase of token listings now feels like the peak. According to Presto Research, all tokens listed on Binance in the first month of 2025 saw a drop of over 70%.

Even if you hold onto beta diamond hands in the top 20 by market cap, you’re no longer rewarded. From July 2024 to now, tokens in the top 20 by market cap have generally fallen more than 60%. Even the so-called “profit hunters” lament that no matter how much they upgrade, they still can’t escape being burned.

The seemingly fair on-chain PVP is in complete disarray.

As of February 26, the number of tokens issued on the Pump.fun platform exceeded 8.1 million, with nearly 32 meme coins having a market cap of over $100 million, and only 154 having a market cap above $10 million. After scandals like Libra and other celebrity coins, on-chain PVP has also reached its end.

With no real crypto innovation and most people unable to make money, where has all the money gone?

Conflux co-founder Yuanjie may have revealed the truth. Apart from a few lucky ones, the vast majority of funds have flowed into the pockets of various parties involved in the “token factory” model.

Yuanjie shared on Twitter, “In the ‘token factory,’ it’s not just VCs, serial entrepreneurs, market makers, OL agencies, studios, whales, and exchanges involved. It’s a whole complete assembly line that greedily sucks the blood of the industry and the retail investors.”

In the crypto market, creating and selling tokens is the biggest business model.

According to Yuanjie, in the “token factory” model, the wealth creation process for projects mainly focuses on two core steps: chip allocation and token listings. The assembly line process for token creation is:

1. Find a founder backed by core circles (e.g., Vitalik, A16Z, Binance) or a meme leader with significant influence to secure low-priced tokens.
2. Create a positive narrative and use artificial data (TVL, on-chain data, node size, etc.).
3. Bind KOL groups to complete Twitter shilling.
4. Target key decision-makers influencing token listings (to make the final push).
5. After listing, start dumping tokens through market makers, then repeat the process to create the next project.

An investor from both Web2 and Web3 also told ChainCatcher that because there is no R&D investment and the teams don’t need to support many people, as long as they can complete the token listing and “harvest,” the projects won’t die. “The market’s elimination mechanism has completely failed, and garbage projects and tokens keep multiplying.”

But as regular users stop falling for the “narrative” schemes created by project teams and VCs, a more aggressive meme token creation model has emerged. It follows the same methodology, but without VCs involved.

The almost non-existent barriers to fair token issuance hide extremely low costs for malicious activity. Primitive Crypto investment partner @YettaSing believes that the meme model is essentially a darker on-chain world than the VC model. Due to a lack of product and technical support, “absolute fairness” is often just a facade. Scandals like Libra have peeled back the last layer of disguise for meme coins.

Where Should the First Shot of the Revolution Be Aimed?

Wealth effects are failing everywhere, and the industry has started a collective reflection and accountability.

Recently, public opinion has once again turned toward the hair-shaving studios. Crypto KOL @mscryptojiayi believes that the rise of altcoins can be traced back to the moment when the “bribery system” flourished, and the first shot of industry reform should target the hair-shaving studios.

In her view, studios and project teams “colluded” to create the industry’s “false prosperity,” not only diluting the expected returns of ordinary users but also weakening users’ long-term loyalty to projects, leading communities to degrade from value communities to market-driven transaction spaces, while also laying the groundwork for secondary market dumping.

She criticized that many studios, with no bottom line, colluded with fraudulent projects to engage in shameless behaviors like creating rat holes, deceiving exchanges and users.

However, KOL in the airdrop space @Ice_Frog666666 rebutted this. He believes that “false prosperity” is the result of the industry’s distorted development, not its cause. Studios are not the biggest beneficiaries or rule-makers, and if the knife isn’t aimed at the largest beneficiaries or rule-makers, reform will inevitably fail.

In addition to hair-shaving studios, during this bull market, VC and CEX are repeatedly targeted as the main co-conspirators benefiting from the system.

During the Hong Kong Consensus Conference, a Crypto VC even criticized the chaos caused by garbage coins, saying, “90% of VCs should shut down.”

The rise of VC tokens also stems from the numerous crypto scams post-ICO, with VCs screening and backing projects that are gradually recognized by retail investors.

However, the leaders of retail investors have already lost trust. Retail investors believe that VCs can acquire tokens at lower costs and with an information advantage, colluding with project teams to dump tokens and harvest users.

In this bull market, VC tokens are generally overvalued with low liquidity, leading to dumping as soon as they are listed, which is a source of dissatisfaction among community users.

He Yi also responded to the listing dispute in last year’s AMA, directly stating that “some VCs are indeed the core reason for inflated prices.”

The ones who get hurt are always the ordinary retail investors.

Exchanges, as the most powerful link in wealth creation, are naturally also held accountable by the market.

Major exchanges like Binance and Coinbase have frequently been involved in listing disputes over the past year. CEX’s exorbitant listing fees were seen by Moonrock Capital CEO Simon as the main reason why project teams couldn’t bear the costs, leading to a loss of market liquidity.

Although He Yi later denied the exorbitant “listing fees,” CEX’s listing mechanisms, “best friend group” insider trading, and other practices have been consistently questioned as one of the main culprits of listing trash projects and blood-sucking.

Although He Yi has repeatedly stated that Binance has a transparent and complex listing process, the meme token TST on the BNB chain was quickly listed and immediately dumped, with even Zhao Changpeng starting to question Binance’s listing issues.

It’s not just exchanges and VCs—any profit-seeking party in the “token factory” can be part of the “revolution.” Crypto KOL @CyberPhilos believes the three major pests in the Crypto world, besides CEX, are KOL agencies and market makers.

A common view is that the key participants in this bull market have become too reliant on old methods, with insufficient native innovation. After the lack of new external liquidity entering, everything has failed. But is this a consequence or the cause? Why can every party in the chain potentially become a “pest”?

Overseas KOL Murtaza reflects, “Wealth came long before practicality, not just a small mistake that would solve itself over time. This actually poses a fatal threat to technology realizing its potential.”

Murtaza mentioned that the global cryptocurrency market value exceeds $2 trillion. Typically, industries of this size form only after developing something socially useful.

Cypher Capital co-founder Bill and Nothing Research partner @0x_Todd shared similar views in reflecting on the plight of VCs and exchanges.

Bill stated that Web3 venture capital follows a completely different logic from Web2 venture capital. The former emphasizes “early fame is key,” and the model of rapidly creating wealth encourages founders to chase trends, focus on marketing, and list projects quickly on exchanges.

In Bill’s view, Web3 actually needs more “patient capital”—venture capital that follows Web2-style methods and supports founders in building long-term value in major markets, allowing teams to focus on product development rather than rushing to cash out.

CEX’s listing dilemma may also stem from the early wealth realization by project teams. @0x_Todd believes that compared to traditional Web2 market IPOs, the problem with Crypto protocols is that they enjoy the benefits of traditional listings: investors exit/incentivize employees but do not bear the traditional listing obligations.

The lack of crypto regulation is also a key issue. @0x_Todd stated, “Bribery, falsification, volume manipulation, scams”—all these tactics are used because there are no punishments.

Currently, crypto panic is at its peak. Despite widespread accountability and reflection, the industry remains collectively trapped. Whether the industry can truly “cleanse itself” and reach a clearing moment remains unknown.

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