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Every single one of these web3 companies is going bust. They could all be built without tokens or a blockchain if they wanted to. There are only two things prop

by pg_bot 4y ago

Every single one of these web3 companies is going bust. They could all be built without tokens or a blockchain if they wanted to. There are only two things propping up the entire crypto economy, VC funding and fraud. Once the VC money leaves the ecosystem the dominoes will fall.

anony23 4y ago
VC money won't leave.
- smachiz 4y ago
  This is what bag holders say.
ackbar03 4y ago
Yet some VCs are still plowing into web3. There was an article today about how Moellis was getting into Web3 companies. I'm genuinely curious what their thought process is. I tend to be in the camp that web3 is just a bunch of hot air seeing how cryptos been around for quite a while now with few use cases, but I also give benefit of the doubt there could be something there given the nature of tech.
- itsoktocry 4y ago
  >Yet some VCs are still plowing into web3 Some VCs, some even with legendary reputations, are going to ruin said reputations from the scams they're pushing. In 10 years much of the sheen of Silicon Valley will have worn off. Tech will be as beloved as banking.
- lordnacho 4y ago
  Moelis advise on M&A though. They get fees from companies doing steps with each other, which they do in both good times and bad (aka restructuring). I didn't think it meant Moelis was investing in those companies. It's like a lawyer getting into crypto, they do contracts for the companies, they're not buying tokens for themselves.
  - mr_gibbins 4y ago
    The ones who made fortunes during the American gold rush were the people selling shovels, not the ones panning for gold.
    - thematrixturtle 4y ago
      Unfortunately in the crypto winter, crypto shovel sellers like Coinbase are doing quite badly as well.
      - bobnamob 4y ago
        I think you need to go a layer or two deeper to find the shovel vendors, maybe those selling compute?
        Someone 4y ago
        Nvidia and AMD sold quite a few GPUs to crypto miners.
        Strom 4y ago
        It seems that they also bet on the hypetrain lasting longer. They are now trying to cancel some of their TSMC orders. [1] They'll probably end up with a juicy profit overall anyway, but perhaps the more clear shovel sellers here are foundries like TSMC and Samsung. -- [1] https://videocardz.com/newz/nvidia-reportedly-wants-to-cut-tsmc-orders-for-next-gen-rtx-40-gpus-5nm-wafers-amid-lower-demand https://videocardz.com/newz/nvidia-reportedly-wants-to-cut-t...
        IgorPartola 4y ago
        Clear winner is energy companies who sell electricity to miners :(
        xchaotic 4y ago
- arcticbull 4y ago
  > I'm genuinely curious what their thought process is. The thought process for VCs investing in crypto is simple: they get a huge discount on the tokens in the raise that they can turn around and dump on retail a few months later for huge returns. Instead of waiting 10+ years for a traditional exit, they can get liquidity in a few months. As Chamath admitted on the podcast, even when they're on a vesting schedule they can sell the claims to future vesting prior to actually receiving the tokens.
  - gingerlime 4y ago
    That’s my understanding as well after listening to Crypto Critics and Griftonomics podcasts. Highly recommend both although so much stuff is way over my head. I wish there was a beginner’s version :)
    - retcon 4y ago
      I'd like to recommend a shelf of great to read erudite and intelligible financial history and financial social history and technicality, from which you'd recognize the simulacra, but it wouldn't help very much because this crypto game strips out everything fundamental economic and human from their imaginary systems and leaves solely a caricature of a carcass. I'm despondent about the overall crypto situation, please forgive me for my cynicism, because I'm genuinely concerned about how many times people can exclaim the king is naked the cupboard is bare the promises aren't merely empty but never had meaning, and yet the socialized penny just won't drop. This FT article [0] goes some way to describing how vulnerable young and low income people are to false investment scheming. What's needed (very rapidly) is to reveal the full extent of behavioural and technical engineering used in exploitation, instead of blaming the phenomenon on concocted reductio ad infortunium. [0] Financial Times article "Generation Moonshot": https://archive.ph/3d4DW https://archive.ph/3d4DW Edit,: added for clarity, "...from which...the simulacra.."; corrected "onto" as "on" and thereafter revised with clearer unchanged meaning the rest of final sentence. (and Ed2 sp ip.); E3 people instead of folk ,(mobile sorry) E4 added, "scheming" after "false investment" for clarity.
      - 4y ago
- nobody9999 4y ago
  >Yet some VCs are still plowing into web3. There was an article today about how Moellis was getting into Web3 companies. I'm genuinely curious what their thought process is. I'd hazard a guess that it's something along the lines of "throw shit against the wall and see if anything sticks," or less cynically "run it up the flagpole and see if anyone salutes." Isn't that pretty much the modus operandi of VCs? Invest in a bunch of speculative ventures and hopefully make all of it (and much, much more) back if/when one or more becomes profitable?
- mathattack 4y ago
  That sounds like banker’s getting into the game late.
elevenoh 4y ago
Melting_Harps 4y ago
> There are only two things propping up the entire crypto economy, VC funding and fraud. Once the VC money leaves the ecosystem the dominoes will fall. Agreed, web3 was a joke... but the same thing can be said about most of disruptive tech like ride-sharing or food delivery, and even FAANGS are experiencing immense markdowns after the immense amount of liquidity poured into the stock market these 2 years. Being critical of the nature of this system also requires self-awareness; otherwise it's just projecting.
- pg_bot 4y ago
  I've done my due diligence, there is no future in web3. I don't disparage early VCs who invested in blockchain startups because it is their job to put money into companies that could be revolutionary. However, the revolution has failed to materialize. While it may not be obvious to all it should become clearer in the coming months. When I say 'fraud' I don't mean juicing the numbers or asking forgiveness instead or permission. I'm not talking about things that will receive a slap on the wrist or a fine from a regulator. There is a great deal of organized crime that is the backbone of the industry. A lot of people will deserve to go to prison when the music stops.
  - spaceman_2020 4y ago
    web3 is going to thrive whether you like it or not. Primarily because of three reasons: - Greed. Its absurdly easy to make a ton of money very fast in crypto. As long as that's possible, money will keep pouring into the system. - Gambling. The global gambling industry is half a trillion every year. Even if you think crypto has no fundamentals and is akin to gambling, it still represents a massive market. Opening a 50x long on a random shitcoin might be the same as yoloing in $10,000 at the roulette table. If the latter can happen sustainably, the former can as well. - Principles. Crypto/web3/blockchain - whatever you might call it - will continue to attract people at the edge cases simply because of the principles and narratives behind it. Self-sovreignity, privacy, ownership - these are ideas worth pursuing. If "web2" hadn't shut off its own users from any semblance of ownership in the platforms, or had done more for privacy, web3 would have died in 2017. But because they didn't, web3 will continue to find users simply because of the "privacy + self-ownership" narrative. More than anything else, I see the massive amounts of money flowing into web3 as a failure of the web2 platforms. If Facebook wasn't such a scummy company, and if Google wasn't tracking everything I do so maliciously, I would have completely ignored web3 as an idea.
spaceman_2020 4y ago
The older protocols that were built in the depth of 2018-19 bear markets will survive. Many of them are also doing wonderfully well in terms of revenue. COMP, MKR, AAVE, CRV all make a ton in revenue and have a well-defined product-market fit. Crypto projects are tough to value. Their sheer global scale means that they can ramp up revenue and even profits extremely fast. StepN, a move-to-earn app reportedly made $120M in profit in its first year of operation. That might not be sustainable, but what business wouldn't give an arm and a leg to make $120M profits in just one year of operation? Imo, crypto projects should be valued on 2-3x multiples at max.
- lalaland1125 4y ago
  > StepN, a move-to-earn app reportedly made $120M in profit in its first year of operation StepN is literally a classic ponzi scheme. You buy in by paying out earlier investors in the hope that a greater fool will in turn buy you out.
- stiltzkin 4y ago
  I do use StepN and should be noted that the $120 million was from the first quarter and the project has less than a year online. But that quarter GST and the sneakers were at ATH before the crash and people "invested" more than $1K for a pair of sneakers, earning were $30 dollars a day with a single common shoe and you could reach your ROI in 30 days. The numbers are different now as GST has crashed 98% and people who invested a lot in the first quarter have their ROI in years. The FitnessFi space has so much potential but StepN has new competition in the space which they are already starting with better ponzinomics and in web3 projects are community driven and StepN community will ape to the next one.
  - spaceman_2020 4y ago
    The problem with any -Fi project (GameFi, FitFi, etc.) is always that the tokeonomics get derailed by speculators. In-game economics become unsustainable when outside investors who have no real interest in the game itself start pouring in money. Suddenly prices that might have made for a sustainable year long run become too expensive, pricing out real users.
eric_cc 4y ago
> They could all be built without tokens or a blockchain if they wanted to. How would you build a decentralized, cross-chain asset exchange without a blockchain? I agree there are far too many superfluous tokens. But there are plenty of real projects that are based on blockchain.
- oblio 4y ago
  > But there are plenty of real projects that are based on blockchain. There are plenty of real projects based on blockchain, where if you take the blockchain out or just replace it with tech we've had for 40+ years, nothing of value is lost. That's the real blockchain problem.
- deleted 4y ago
  [deleted]
risyachka 4y ago
>> They could all be built without tokens or a blockchain if they wanted to Sure, and all web2.0 tech can be built without AWS or docker. But in many cases, they give you a powerful advantage. Same with blockchain. What now is happening in web3.0 is not that different from the dot com bubble. But it busted, and then a ton of new profitable companies appeared. Blockchain tech will for sure have many legit use cases, same with tokens and tokenomics. Will most of the current crypto companies go bust? Probably. Does this mean that blockchain and tokens are crap? No.
- smoldesu 4y ago
  > Blockchain tech will for sure have many legit use cases When?
  - oblio 4y ago
    Well, it will only take as long as for web 1.0 and web 2.0 to find legit use cases. What's that you say? Those technologies have legit cases from almost day 1, it just took the technology a bit to catch up? That's just like crypto tech. Ah, it isn't, you say? Blockchain has the tech but the list of legit and popular use cases only it can solve is almost 0 and we haven't really found new ones in almost 14 years?
    - smoldesu 4y ago
      I think you've basically defeated your own arguement. These Web3 principles of decentralization are not new, and fully possible to implement with Web2. Bittorrent, DNS, Napster, PeerTube, Matrix, Mastodon... all of them are Web2 software that use the smart principles of Web3 without adopting asinine smart contracts or self-sabotaging governance concepts. The Blockchain does have problems it can solve, they just got solved by Web2 first. Sorry.
      - ChadNauseam 4y ago
        Try creating a fully decentralized version of Uniswap that’s resistant to attacks and isn’t based on a blockchain. it can’t be done.
darkmarmot 4y ago
Don't forget money laundering, human trafficking and drug sales! And destroying the environment through sheer waste is just the crypto cherry on top!

by pg_bot 4y ago

anony23 4y ago

VC money won't leave.

smachiz 4y ago
This is what bag holders say.

ackbar03 4y ago

Yet some VCs are still plowing into web3. There was an article today about how Moellis was getting into Web3 companies. I'm genuinely curious what their thought process is. I tend to be in the camp that web3 is just a bunch of hot air seeing how cryptos been around for quite a while now with few use cases, but I also give benefit of the doubt there could be something there given the nature of tech.

itsoktocry 4y ago
>Yet some VCs are still plowing into web3 Some VCs, some even with legendary reputations, are going to ruin said reputations from the scams they're pushing. In 10 years much of the sheen of Silicon Valley will have worn off. Tech will be as beloved as banking.
lordnacho 4y ago
Moelis advise on M&A though. They get fees from companies doing steps with each other, which they do in both good times and bad (aka restructuring). I didn't think it meant Moelis was investing in those companies. It's like a lawyer getting into crypto, they do contracts for the companies, they're not buying tokens for themselves.
- mr_gibbins 4y ago
  The ones who made fortunes during the American gold rush were the people selling shovels, not the ones panning for gold.
  - thematrixturtle 4y ago
    Unfortunately in the crypto winter, crypto shovel sellers like Coinbase are doing quite badly as well.
    - bobnamob 4y ago
      I think you need to go a layer or two deeper to find the shovel vendors, maybe those selling compute?
      - Someone 4y ago
        Nvidia and AMD sold quite a few GPUs to crypto miners.
        Strom 4y ago
        It seems that they also bet on the hypetrain lasting longer. They are now trying to cancel some of their TSMC orders. [1] They'll probably end up with a juicy profit overall anyway, but perhaps the more clear shovel sellers here are foundries like TSMC and Samsung. -- [1] https://videocardz.com/newz/nvidia-reportedly-wants-to-cut-tsmc-orders-for-next-gen-rtx-40-gpus-5nm-wafers-amid-lower-demand https://videocardz.com/newz/nvidia-reportedly-wants-to-cut-t...
        IgorPartola 4y ago
        Clear winner is energy companies who sell electricity to miners :(
        xchaotic 4y ago
arcticbull 4y ago
> I'm genuinely curious what their thought process is. The thought process for VCs investing in crypto is simple: they get a huge discount on the tokens in the raise that they can turn around and dump on retail a few months later for huge returns. Instead of waiting 10+ years for a traditional exit, they can get liquidity in a few months. As Chamath admitted on the podcast, even when they're on a vesting schedule they can sell the claims to future vesting prior to actually receiving the tokens.
- gingerlime 4y ago
  That’s my understanding as well after listening to Crypto Critics and Griftonomics podcasts. Highly recommend both although so much stuff is way over my head. I wish there was a beginner’s version :)
  - retcon 4y ago
    I'd like to recommend a shelf of great to read erudite and intelligible financial history and financial social history and technicality, from which you'd recognize the simulacra, but it wouldn't help very much because this crypto game strips out everything fundamental economic and human from their imaginary systems and leaves solely a caricature of a carcass. I'm despondent about the overall crypto situation, please forgive me for my cynicism, because I'm genuinely concerned about how many times people can exclaim the king is naked the cupboard is bare the promises aren't merely empty but never had meaning, and yet the socialized penny just won't drop. This FT article [0] goes some way to describing how vulnerable young and low income people are to false investment scheming. What's needed (very rapidly) is to reveal the full extent of behavioural and technical engineering used in exploitation, instead of blaming the phenomenon on concocted reductio ad infortunium. [0] Financial Times article "Generation Moonshot": https://archive.ph/3d4DW https://archive.ph/3d4DW Edit,: added for clarity, "...from which...the simulacra.."; corrected "onto" as "on" and thereafter revised with clearer unchanged meaning the rest of final sentence. (and Ed2 sp ip.); E3 people instead of folk ,(mobile sorry) E4 added, "scheming" after "false investment" for clarity.
    - 4y ago
nobody9999 4y ago
>Yet some VCs are still plowing into web3. There was an article today about how Moellis was getting into Web3 companies. I'm genuinely curious what their thought process is. I'd hazard a guess that it's something along the lines of "throw shit against the wall and see if anything sticks," or less cynically "run it up the flagpole and see if anyone salutes." Isn't that pretty much the modus operandi of VCs? Invest in a bunch of speculative ventures and hopefully make all of it (and much, much more) back if/when one or more becomes profitable?
mathattack 4y ago
That sounds like banker’s getting into the game late.

elevenoh 4y ago

Melting_Harps 4y ago

> There are only two things propping up the entire crypto economy, VC funding and fraud. Once the VC money leaves the ecosystem the dominoes will fall. Agreed, web3 was a joke... but the same thing can be said about most of disruptive tech like ride-sharing or food delivery, and even FAANGS are experiencing immense markdowns after the immense amount of liquidity poured into the stock market these 2 years. Being critical of the nature of this system also requires self-awareness; otherwise it's just projecting.

pg_bot 4y ago
I've done my due diligence, there is no future in web3. I don't disparage early VCs who invested in blockchain startups because it is their job to put money into companies that could be revolutionary. However, the revolution has failed to materialize. While it may not be obvious to all it should become clearer in the coming months. When I say 'fraud' I don't mean juicing the numbers or asking forgiveness instead or permission. I'm not talking about things that will receive a slap on the wrist or a fine from a regulator. There is a great deal of organized crime that is the backbone of the industry. A lot of people will deserve to go to prison when the music stops.
- spaceman_2020 4y ago
  web3 is going to thrive whether you like it or not. Primarily because of three reasons: - Greed. Its absurdly easy to make a ton of money very fast in crypto. As long as that's possible, money will keep pouring into the system. - Gambling. The global gambling industry is half a trillion every year. Even if you think crypto has no fundamentals and is akin to gambling, it still represents a massive market. Opening a 50x long on a random shitcoin might be the same as yoloing in $10,000 at the roulette table. If the latter can happen sustainably, the former can as well. - Principles. Crypto/web3/blockchain - whatever you might call it - will continue to attract people at the edge cases simply because of the principles and narratives behind it. Self-sovreignity, privacy, ownership - these are ideas worth pursuing. If "web2" hadn't shut off its own users from any semblance of ownership in the platforms, or had done more for privacy, web3 would have died in 2017. But because they didn't, web3 will continue to find users simply because of the "privacy + self-ownership" narrative. More than anything else, I see the massive amounts of money flowing into web3 as a failure of the web2 platforms. If Facebook wasn't such a scummy company, and if Google wasn't tracking everything I do so maliciously, I would have completely ignored web3 as an idea.

spaceman_2020 4y ago

The older protocols that were built in the depth of 2018-19 bear markets will survive. Many of them are also doing wonderfully well in terms of revenue. COMP, MKR, AAVE, CRV all make a ton in revenue and have a well-defined product-market fit. Crypto projects are tough to value. Their sheer global scale means that they can ramp up revenue and even profits extremely fast. StepN, a move-to-earn app reportedly made $120M in profit in its first year of operation. That might not be sustainable, but what business wouldn't give an arm and a leg to make $120M profits in just one year of operation? Imo, crypto projects should be valued on 2-3x multiples at max.

lalaland1125 4y ago
> StepN, a move-to-earn app reportedly made $120M in profit in its first year of operation StepN is literally a classic ponzi scheme. You buy in by paying out earlier investors in the hope that a greater fool will in turn buy you out.
stiltzkin 4y ago
I do use StepN and should be noted that the $120 million was from the first quarter and the project has less than a year online. But that quarter GST and the sneakers were at ATH before the crash and people "invested" more than $1K for a pair of sneakers, earning were $30 dollars a day with a single common shoe and you could reach your ROI in 30 days. The numbers are different now as GST has crashed 98% and people who invested a lot in the first quarter have their ROI in years. The FitnessFi space has so much potential but StepN has new competition in the space which they are already starting with better ponzinomics and in web3 projects are community driven and StepN community will ape to the next one.
- spaceman_2020 4y ago
  The problem with any -Fi project (GameFi, FitFi, etc.) is always that the tokeonomics get derailed by speculators. In-game economics become unsustainable when outside investors who have no real interest in the game itself start pouring in money. Suddenly prices that might have made for a sustainable year long run become too expensive, pricing out real users.

eric_cc 4y ago

> They could all be built without tokens or a blockchain if they wanted to. How would you build a decentralized, cross-chain asset exchange without a blockchain? I agree there are far too many superfluous tokens. But there are plenty of real projects that are based on blockchain.

oblio 4y ago
> But there are plenty of real projects that are based on blockchain. There are plenty of real projects based on blockchain, where if you take the blockchain out or just replace it with tech we've had for 40+ years, nothing of value is lost. That's the real blockchain problem.
deleted 4y ago
[deleted]

risyachka 4y ago

>> They could all be built without tokens or a blockchain if they wanted to Sure, and all web2.0 tech can be built without AWS or docker. But in many cases, they give you a powerful advantage. Same with blockchain. What now is happening in web3.0 is not that different from the dot com bubble. But it busted, and then a ton of new profitable companies appeared. Blockchain tech will for sure have many legit use cases, same with tokens and tokenomics. Will most of the current crypto companies go bust? Probably. Does this mean that blockchain and tokens are crap? No.

smoldesu 4y ago
> Blockchain tech will for sure have many legit use cases When?
- oblio 4y ago
  Well, it will only take as long as for web 1.0 and web 2.0 to find legit use cases. What's that you say? Those technologies have legit cases from almost day 1, it just took the technology a bit to catch up? That's just like crypto tech. Ah, it isn't, you say? Blockchain has the tech but the list of legit and popular use cases only it can solve is almost 0 and we haven't really found new ones in almost 14 years?
  - smoldesu 4y ago
    I think you've basically defeated your own arguement. These Web3 principles of decentralization are not new, and fully possible to implement with Web2. Bittorrent, DNS, Napster, PeerTube, Matrix, Mastodon... all of them are Web2 software that use the smart principles of Web3 without adopting asinine smart contracts or self-sabotaging governance concepts. The Blockchain does have problems it can solve, they just got solved by Web2 first. Sorry.
    - ChadNauseam 4y ago
      Try creating a fully decentralized version of Uniswap that’s resistant to attacks and isn’t based on a blockchain. it can’t be done.

darkmarmot 4y ago

Don't forget money laundering, human trafficking and drug sales! And destroying the environment through sheer waste is just the crypto cherry on top!