Author: Noveafer Translator: Ken, Chaincatcher Back in 2021, you were just starting out investing in cryptocurrencies and became a fan of the industry, obsessed with how it worked and believing that anyone could get rich if they played it right. You witnessed countless stories of overnight riches, saw many millionaires being created, and even thought investing directly in Bitcoin was a good strategy. The data you saw showed that Bitcoin was one of the fastest-growing assets, its market capitalization reaching the $1 trillion milestone far faster than any other company. Fast forward to today, you're sitting at a family dinner, everyone talking about their portfolios, the long-term strong performance of the S&P 500, and how satisfied they are with their investments. You take out your phone and see that your portfolio has shrunk by 60% from its all-time high. You sigh deeply and silently take another bite of your meal. Your cousin smiles and asks, "Hey, you've been investing in cryptocurrencies, haven't you? How's your portfolio doing?" He adds, "I'm so glad I stayed far away from it and didn't throw any money in." You're speechless because you can't find a reason to refute him. You could point to the New York Stock Exchange's plans to go blockchain to enable 24/7 trading, BlackRock's tokenizing short-term Treasury bonds, Robinhood's just launched its L2 testnet, and many more institutions adopting crypto. But you hesitate, knowing you've suffered significant losses, and none of these factors seem to help. You're confused because Bitcoin's price has retraced to where you initially invested. And you didn't just invest in Bitcoin; that was only a small part of your portfolio. You've also discovered many other cryptocurrencies along the way that you initially thought had huge upside potential—perhaps one of the 17,000+ tokens listed on CoinGecko, or one of the millions launched on platforms like Pumpfun in the last year or two. So many tokens have been created over the years that 99% need to go to zero for the industry to function healthily. This is evident in the fact that the top five tokens account for 84.4% of the entire crypto market capitalization, making you wonder what to do with the rest and whether they still have any value. The remainder of the market ($15.6%, or $330 billion) houses thousands of other tokens. To illustrate this more clearly, the crypto market is far more concentrated than traditional finance. In the US stock market, the Big Seven tech giants account for 31% of the market capitalization, while the top 500 companies (the S&P 500) account for 84.7%.Traditional finance has a hundred times more companies than cryptocurrencies, yet it only achieves the same market capitalization as the top five crypto assets. For the crypto industry to achieve a similar representative distribution, one of the following scenarios needs to hold true: The first scenario is more favorable for value distribution in a healthy system, but it's unlikely to happen because most assets are linked to Bitcoin, and it also means that major assets are losing trust, which is not ideal. Certain tokens, such as HYPE, have gained significant market share over time due to their strong market acceptance and product-market fit, thus fitting the second scenario. Hyperliquid was clearly one of the few winners last year; they truly have excellent token-product consistency because they reinvested a large portion of platform fees into token buybacks. Continuing with the second scenario—attracting value from external entities (or institutions)—the crypto industry has performed reasonably well in digital asset trusts/funds, at least in terms of accumulation, despite their current significant price drops. For Bitcoin, digital asset trusts have accumulated 997,257 BTC (5% of the circulating supply); for Ethereum, this figure is 6.16 million ETH (5.1% of the circulating supply). Furthermore, there's reason to believe they already account for a significant portion of the circulating supply of major assets, so any further intervention would result in excessive control concentrated in the hands of a few entities. The third and final scenario, which must happen quickly, is as follows: Tokens are unlocking every month, resulting in a massive supply unlock over the next few years. This year alone, token unlocks will add $8.51 billion in value to the market, and this figure will reach $17.12 billion over the next five years. However, it's unclear whether there will be sufficient demand to absorb these supply unlocks and the resulting selling pressure. For most tokens, this, coupled with factors like distorted token economics, will drive them towards zero. To increase demand, these projects need to be commercially successful. However, many crypto businesses have failed. For a trillion-dollar industry, of the 5,600+ protocols listed on DeFiLlama, only 76 have generated over $1 million in revenue in the past 30 days, representing just 1.3%. Interestingly, even lowering this threshold to over $100,000 in revenue in the past 30 days, only 237 protocols meet the requirement. Furthermore, when you look at revenue concentration, you'll find that in 2025, the top 10 protocols will account for 80% of revenue, with the top 3 accounting for 64%. Tether alone will account for 44% of the total revenue in the crypto industry.Surprisingly, of these 10 protocols, only 3 have issued tokens to date (Hyperliquid, Pumpfun, Jupiter), and looking at their relative performance, only HYPE has performed relatively well. This also points to the fact that issuing tokens is not always the best option. In 2025, approximately 118 major tokens were issued, and 84.7% of them fell below their valuation at the time of their token issuance. These numbers look terrible and are often disappointing, leading us to question whether investing in new tokens is worthwhile. These tokens were issued at bubble-like valuations, their price movements throughout the year were worrying, and they are still declining even now because the broader market environment is not performing well. The “October liquidation event” occurred because macroeconomic pressures revealed design flaws. It exposed the weak design of many things in the crypto space, whether it was centralized exchanges like Binance—which liquidated millions of dollars worth of positions due to price errors in assets such as USDe, BNSOL, and wBETH; or lending protocols like Silo and Morpho—which accumulated bad debts in the Stream Finance collapse weeks later. Since then, asset prices have failed to recover, and the $19 billion liquidation cascade effect still resonates. The total value locked in decentralized finance (DeFi) has fallen by 44% since the event (from $165 billion to $94 billion). Protocol revenue has declined, and the bear market has officially begun. When you take your hand off the wheel while driving, does the car veer off course? If so, there's a consistency issue between your steering wheel and tires. Similarly, in the crypto space, this consistency issue often arises between a protocol and its issued tokens. Last December, when Circle acquired Interop Labs (the team behind the Axelar interoperability stack), the AXL token wasn't included in the deal, and its price plummeted immediately after the announcement. That's inconsistency. So, why does this inconsistency occur? A project typically involves two entities: the lab and the Decentralized Autonomous Organization (DAO)/token holders. The lab is the "team" in tokenomics; they are the initial developers of the project, raising funds for growth by selling a stake in the company and giving tokens to investors in the early stages. In some cases, venture capital firms even receive terms more favorable than anyone expects, such as "refund rights." Tokens are not legal representations of a business, nor do they offer any actual rights to the company's profits like equity. Investors acquire these rights through their equity holdings when they receive tokens. Therefore, they are in a more advantageous position, but what about token holders?In aligning products with tokens, they are completely at the mercy of the project team. This is an issue that very few protocols address. They typically demonstrate this consistency through token buybacks. Hyperliquid reinforces this consistency through buybacks. Some might argue that they should use the collected fees to further promote protocol growth, such as through incentives or strengthening insurance funds, and they're not wrong. These things should indeed be done, but building a moat around a good token is the best marketing strategy. Making your users rich is the best thing a product can do, which is exactly what Hyperliquid did with its first airdrop. Aave, as the largest decentralized finance protocol, uses its revenue for buybacks, but also faces similar controversies regarding the better use of funds and how to channel them towards growth (I understand the current inconsistencies and hope that the Decentralized Autonomous Organizations (DAOs) and Labs can address this issue for the benefit of the AAVE token). Last year, Uniswap fully aligned its token with the interests of the token and its holders after more than five years of existence. These protocols are genuinely protecting the interests of holders. Obviously, there are other examples, which I won't list here, but even so, the number is still less than our demand. These are tokens worthy of appreciation. Everything else should fall, and people should rotate to protocols that generate revenue and are most aligned with their tokens, those that are doing buybacks, achieving organic growth, and trying new ways to attract more users. So, am I saying these tokens are the best investment choices? Probably not. I'm not offering any financial advice; I'm just telling you what to look for when investing in any protocol. Whether it goes up or down, it all comes down to token unlocks spread over several years (token economics), the incentives they distribute (which leads to token dilution), and other expenses. Therefore, even with buyback programs, selling pressure may still be greater. The crypto industry is currently in a reshuffling phase, speculative tokens will stop receiving inflows, and real tokens with underlying businesses supporting their growth will stand out. Not many people realize this and see the opportunity, but protocols with real revenue are ultimately the key. They are already growing, already forming trends, and if not today, will soon become mainstream. The era of non-cash flow generating tokens is over, as evidenced by the countless failed launches last year. This is why MegaETH's metric-based launch makes sense: it first tries to determine the demand for the chain and its products, runs some revenue data, and then issues tokens.Another interesting model they adopted was their partnership with Ethena to launch USDm, designed to prevent the value generated by stablecoins from flowing out of the ecosystem and instead use it for token buybacks. Time will tell if their model is successful, but it's a great starting point for rethinking how tokens are issued today. Therefore, it's safe to believe that the crypto industry is evolving and that most crypto assets should go to zero, with only a few exceptions.