Yilihua Identifies Key Challenges Facing Cryptocurrency Primary Market

Yi Lihua, founder of Liquid Capital, has outlined four major factors contributing to the current downturn in the cryptocurrency primary market. He argues that the collapse of the narrative surrounding cryptocurrencies has led to a lack of confidence among investors, with traditional methods of market validation, such as white papers and institutional endorsements, failing to resonate. Additionally, he highlights a significant supply imbalance, noting that the proliferation of projects has made it increasingly difficult for high-quality initiatives to stand out.

Lihua also criticizes the existing 1 plus 3 unlocking mechanism, which he claims primarily benefits venture capitalists (VCs) and allows projects, market makers, and exchanges to gain an unfair advantage. He emphasizes that this system should be reformed, as it places undue risk on VCs, who should not be subjected to unfavorable unlocking terms. Furthermore, he points out that the high costs associated with listing new coins on major centralized exchanges, which can reach tens of millions of dollars, are creating barriers for emerging projects.

To address these challenges, Lihua calls for industry leaders to prioritize genuine project development and improve the criteria for coin listings on platforms like Binance. He argues that even groundbreaking projects, such as Ethereum, would struggle to gain listing approval under the current system. He advocates for a shift towards focusing on real revenue generation and buybacks, similar to practices seen in the U.S. stock market, to foster a healthier investment environment and help investors identify quality projects.

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Source: KLEA News