Why are "air" projects in the Crypto Assets field highly valued?

In the world of Crypto Assets, we often see projects that have only flashy websites but can raise huge amounts of funds. This phenomenon is not accidental, but rather the result of game theory at work.

Recalling the scene from the American TV series "Silicon Valley": companies without revenue are valued higher than profitable ones. Venture capitalists explain: "Showing revenue raises the question of 'how much', while having no revenue allows people to imagine infinite possibilities."

The cryptocurrency field pushes this logic to the extreme: the more elusive a project is, the stronger its fundraising ability becomes. This is not a flaw, but rather the most profitable characteristic of this field.

Realistic Valuation Constraints

Having real products means facing the facts:

• The number of users is often disappointing.
• Technical limitations are frustrating
• The indicators that cannot be manipulated are extremely lethal.

In contrast, the potential of projects with only a white paper is limited to imagination.

This has created a strange phenomenon: practical projects are punished by the market instead.

information asymmetry game

Crypto Assets fundraising involves the following parties:

• Project Founder (Omniscient)
• Venture Capitalist (partially understood)
• Ordinary investors (almost unaware)

For founders without products, the winning strategy is very clear:

• Keep it vague but exciting
• Talk about potential rather than reality
• Create FOMO atmosphere

The more vague the statement, the harder it is to be falsified. The fewer the functions, the fewer the opportunities to expose defects.

Why is no one asking for better results?

Similar to the "prisoner's dilemma", investing in Crypto Assets also presents such a dilemma: if everyone demands to see viable products before investing, the market would be healthier.

But waiting means missing out on early high returns. The earliest entrants often profit the most, even if the project ultimately fails.

Therefore, seemingly wise individual decisions (entering the market early based solely on promises) led to foolish collective outcomes (focusing more on hype than substance).

The trade between dreams and reality

A Medium article can claim to disrupt everything and capture trillions of dollars in value.

Projects with actual code must face:

• Real User Count
• Technical Capability Boundaries
• Reasons for Competitive Disadvantages

This has given rise to the so-called "nonsense premium"—a valuation premium obtained by detaching from real constraints.

hype synergy

When it is difficult to discern project quality, people will look for the same signals:

• Comments from Influencers
• Exchange Listing Status
• Token price increase

No product projects can allocate all resources to manufacturing these signals, instead of development.

In the Crypto Assets field, marketing always outweighs development.

real case

The Crypto Assets field has buried billions of dollars worth of white papers, confirming the above theory:

• A certain project: creating a passionate community, achieving a valuation of billions before launch. It proves that the more abstract the product, the more people can project their dreams.
• A certain public blockchain: Claims to process 160,000 transactions per second, raised $350 million, but could only handle 4 transactions per second at launch. The less evidence for technical claims, the more funding is obtained.
• A certain biometric project: the idea of exchanging biometric data for tokens has garnered billions of dollars in investment.

These cases show that the more abstract the commitment or the more complex the technology, the more funding is raised, and ultimately the more severe the failure.

Why does this situation persist ###

Logically, investors should demand to see viable products.

But game theory explains why this won't happen:

• The FOMO sentiment is real: early investors make the most profit, creating pressure to invest ahead.
• Difficulty in verifying claims: Most investors lack the ability to conduct technical assessments.
• Fund managers are shortsighted: compensation depends on short-term returns rather than long-term success.
• Misalignment of Incentive Mechanism: Personal Interests and Market Interests are Inconsistent

This is why non-product projects continuously raise more funds than practical projects.

The game rules are fine; it's just that some people are too skilled at playing.