Web3 is hailed as the future of the internet, yet it is mired in various chaos. This article summarizes eight major issues currently facing the Web3 industry, including the failure of value investment, rampant speculation on meme coins, lack of large-scale applications, unclear regulations, capital manipulation, frequent security incidents, widespread scams, and insufficient user awareness. The aim is to remind investors to remain cautious and emphasize the importance of "DYOR" (Do Your Own Research).
It seems that we have always been talking about the good aspects of Web3, which is actually misleading. Today, let's make up for that. Here are the eight major issues I have summarized regarding the current state of Web3, shared with everyone.
First, the failure of value investment
I believe those involved have a deep understanding of this, especially those who call themselves part of the blockchain community, like me. Initially, the crypto space was divided into the blockchain circle and the coin circle, with the blockchain circle pursuing ideals, believing in value, and having a fondness for technology. When looking at projects, one must consider the fundamentals, how the data looks, what technology is being used, the background of the team, the financing situation, and so on. However, the reality has been a harsh slap in the face, especially in the past two years. Why? Because people have been chasing memes.
Second, memes are everywhere
If you look at on-chain trading data, you'll find a very ironic fact—most of the funds and trading volume have not flowed into "valuable" Web3 projects but have instead surged into meme coins and celebrity tokens. In the past six months, the meme sector has outperformed all other tracks like DeFi, NFT, and Layer 2. On the Solana chain, thousands of meme coins are added daily, with 99% being short-term speculative investments that ultimately go to zero, yet people continue to rush in. Celebrity tokens have become a new way to exploit retail investors, such as those from the Trump family and Argentina's president Milei. The rise of memes indicates that the market does not care about "technology" or "ecosystems"; what matters more is "who can bring short-term wealth effects." Speculation outweighs everything, and true value is discarded by the market. But are there truly valuable things in the market? For example, are there large-scale applications?
Third, lack of large-scale applications
Although technology has been advancing, a fundamental question remains—are there any truly successful large-scale applications? DeFi is growing slowly, with TVL shrinking, and new models have yet to break through. The NFT market is at a low point, with most NFT prices plummeting by over 90%. The promise of "changing the art industry" has ultimately devolved into a game of capital speculation. Most GameFi projects have gone to zero, and many P2E (Play to Earn) games cannot attract long-term players; after Axie Infinity, there have been no phenomenal projects. Concepts like on-chain social, decentralized identity, and data sovereignty are widely discussed, but currently, no project can truly scale. Web3 has been called out for so many years, but apart from exchanges, wallets, and DEXs, there are no truly phenomenal applications, such as a Web3 version of Facebook, Google, or Amazon. This means ordinary users have no motivation to enter the Web3 world. Why not? Is it because the technology is lacking? No.
Fourth, unclear industry regulations
The biggest reason remains regulation. As long as a token has actual utility and real application scenarios, it is considered a security under current U.S. SEC regulations. Most current Web3 projects face the risk of being classified as "securities." It's like the sword of Damocles hanging overhead, causing many projects to hesitate in large-scale development for fear that a single ban could wipe out the entire industry. Some say that the ETFs for BTC and ETH have already been approved, which indicates that the authorities have recognized cryptocurrencies. However, they only recognize the highway, not the cars; what's the use of the highway then? It becomes a game of capital.
Fifth, capital games
If a token has no actual utility, it means the token and the project itself are two different things. Essentially, 99.99% of tokens are memes, which turns it into a capital game. Large VCs stand on the sidelines, run away after TGE, leaving retail investors with nothing. Exchanges manipulate internal trading, harvesting retail investors through IEOs, and using bots to inflate trading volumes, making retail investors mistakenly believe the market is thriving and controlling market fluctuations. Most exchanges have huge funds that can raise or crash prices at any time, clearing retail positions through futures contracts to earn more fees. There are leaks of listing information: many exchanges will inform insiders or VIP clients in advance about new listings, allowing them to position themselves early while ordinary retail investors can only buy at high prices. There are also market-making games, such as washing, crashing, and controlling the market, along with collusion between project parties and KOLs, promoting, selling, and running away. These are all planned actions by capital, along with unexpected incidents like security events.
Sixth, frequent security incidents
From exchange closures to hacker attacks and smart contract vulnerabilities, every major security incident results in huge losses and even affects the trustworthiness of the entire industry. There have been early exchange collapses—like the Mt. Gox incident, the "Lehman moment" of the crypto market—FTX's collapse, and the largest theft in crypto history—Bybit being hacked for $1.46 billion. It truly is a case of trouble coming from nowhere. Besides natural disasters, there are also man-made disasters, which are the numerous scam projects everywhere.
Seventh, scams are everywhere
Some people promote the benefits of Web3 due to technology and ideals, like me, but of course, there are those who exploit this so-called goodness to do bad things. They package a false project, issue air tokens, and boast about how good it is, what encryption technology is used, and what industry problems it solves, ultimately using market frenzy to raise funds, disappearing after scamming money in a short time, leaving investors with no recourse. Why do so many people participate in such garbage projects? Because retail investors lack awareness.
Eighth, insufficient user awareness
Terms like crypto, blockchain, and Web3 sound daunting, let alone delving deeper into them. But more and more people around me are saying good things about it; what should I do? Follow the trend and invest, seeing which KOL posts on social media, rushing to buy, and immediately joining any recommended project. I feel this strongly; so many people consult me, but very few genuinely want to learn about Web3 knowledge.
I've said quite a bit today, and I'm not sure how everyone feels after hearing this. The purpose of mentioning these issues is not to say that Web3 is terrible right now; I believe these chaotic phenomena are a process that any emerging product must go through. I have never doubted the future of Web3. I just want to remind everyone that there are still many shortcomings in Web3. You can choose not to participate, but if you do, be cautious, prioritize learning, and remember that DYOR is always the most important.
Welcome to join the community
Welcome to the community WeChat: BQ221858
Welcome to follow Weibo: @QuarkMing202
Welcome to follow Twitter: @xian202766693