BitMEX founder Arthur Hayes recently stated that as the cryptocurrency market continues to boom in 2024, the market focus is no longer just on mainstream currencies such as Bitcoin and Ethereum, but on a new batch of listed tokens. Hayes said that the PvP atmosphere pervading the market made him wonder whether these newly issued tokens have deviated from the original spirit of Web3 and instead become a predatory game. Hayes also said that many project founders chose to list their tokens on centralized exchanges (CEX), but they did not expect that the cost ended up exceeding expectations, and the token price eventually fell down the toilet like "poop".

(PvP: Player versus player lingo; Arthur Hayes says this has become a buzzword often used by spam traders to describe the current market cycle.)

Listing strategy in a PvP atmosphere: The struggle between VC and CEX

Hayes said that the current state of PvP in the crypto market is actually very similar to traditional finance (TradFi). The emotions it triggers are predatory, and victory is at the expense of others. This is especially obvious in Shitcoin. For newly issued tokens, many projects set the fully diluted valuation (FDV) of the token very high when they are listed, but in fact only release a small amount of tokens into circulation. This seems to have a large market value, but the market The actual supply on the market is very small, which can easily cause price fluctuations and mislead investors. In the end, the price will never return.

On the other hand, venture capital companies (VCs) will continue to raise the valuation of tokens through multiple rounds of fundraising so that their books appear to make a lot of money. However, once the tokens are listed, the price will not be worth it. So many stocks fell sharply, and in the end it was ordinary retail investors who suffered.

CEX Listing Fees: The Hidden Cost of Token Listing

Hayes said that for many project founders, the reason for choosing CEX to list tokens is simple: "It just wants more liquidity and exposure opportunities!" But in fact, the listing fees charged by CEX are quite astonishing. For example, Binance has the highest It may charge 8% of the total amount of tokens as listing fees, require up to $5 million in BNB as a deposit, and require additional marketing fees. Such costs are a huge burden for new projects.

As for CEX, they quite like those tokens with high valuations but small actual supply. Because they are highly volatile and attract a large number of retail investors, they can earn more handling fees. However, most tokens did not meet market expectations after being listed, and prices plummeted, causing ordinary retail investors to lose money and project developers to find it difficult to maintain good performance.

DEX becomes a priority due to low cost, calling for focus on product value

Some projects have chosen a different route in a PvP atmosphere. Hayes took Auki Labs as an example. Auki Labs did not choose to be listed on CEX first. Instead, it was listed on a decentralized exchange (DEX) and attracted early investors with a lower FDV. So far, Auki’s price is higher than the previous one. The price of round financing increased by 78%.

(Note: Auki Labs is an investment target of Maelstrom, a venture capital managed by Arthur Hayes)

Hayes said that building product value is what Auki Labs focuses on. Auki Labs’ token $AUKI was first listed on Uniswap V3. Platforms like Uniswap allow projects to directly create liquidity pools without going through CEX review. Projects can also focus on product development and user growth without having to invest a lot of resources in the exchange listing process.

Auki Labs subsequently listed on their first centralized exchange, MEXC, on September 4. Hayes said they saved $200,000 in listing fees.

(Note: Auki Labs focuses on developing spatial computing technology, focusing on enhanced AR applications, allowing mobile phones or AR glasses to simultaneously display the same virtual objects in the same physical space.)

Please lower the listing valuation and put user loyalty first

Hayes also offered many suggestions for future startup projects. He said that the project team is asked to consider lowering the valuation at the time of listing when issuing tokens, so that it is easier for users to participate and has more upside potential. He also suggested that the project team choose to raise funds on a small scale and list the tokens at a low FDV, so that early users can grow with the project. This will not only improve user loyalty, but also make the project more resilient in the future.

In addition, Hayes suggested that project developers who only believe that Binance or other large CEX can bring success should re-evaluate their listing strategy. After all, CEX listing costs are expensive and may not bring long-term price support. A more effective way may be to increase daily active users (DAU) and strengthen product-market fit, focusing on making the product meet market demand and making more people willing to continue using it, thereby attracting the support of real users and the community.

In this way, the price of the token can naturally rise with the actual growth of the project, instead of relying on listing fees to speculate on the token price in the short term. Such a price will also be more stable in the long term.

(Why Arthur Hayes continues to make money when his prediction accuracy is only 25%)

This article Arthur Hayes: PvP is rampant in the encryption market, spending a lot of money to list but the value is the same as shit first appeared in Chain News ABMedia.