The term "internet capital market" can have multiple meanings. In today's context, it often refers to the alchemical achievements of blockchain technology: financial technology that transcends geographical boundaries. Borrowing with "magic internet currency," the tokenization of government bonds and private lending, the widespread use of stablecoins—in today's world of merging traditional finance and digital assets, all of this is collectively referred to as the "internet capital market." But for traders who have been active on-chain over the past few years, it means much more than that. The internet capital market is more than just "on-chain government bonds"—it also encompasses a variety of speculative instruments like NFTs, DeFi, and ICOs, as well as the tradable tokens that arise from them. This journey began with the deployment of the first smart contract on Ethereum in 2015. In this article, I want to delve into this aspect of the internet capital market: focusing on tokens, current-round narratives, 10x returns, 100x returns, and airdrops—the mechanisms that underpinned the original narratives of the internet capital market. I believe we are entering what crypto veterans refer to as the "new narrative." To analyze this, we first need to review these capital formation mechanisms and their differences: The Evolution of Financing Mechanisms in Different Cycles We have already seen how the market has changed financing methods during several bull and bear cycles. From ICOs to altcoins on centralized exchanges (CEX Alts), and then back to memecoins, I've outlined the evolution in the graphic, but a brief summary is as follows:
1. The Original ICO (2017)
This was an investment mechanism based on "promises," where investors bought in the hope of selling to a "greater fool." The technology often wasn't real, and even if it was, it was often unusable or didn't accrue value. Most of the time, it was a game of "pass the parcel." Examples include Bitconnect and Dentacoin.
2. A Paradise for Venture Capital
The 2021 bubble also brought in a large amount of institutional capital—in hindsight, the impact on the industry was extremely devastating. Extremely high valuations and poor incentive design (who would be willing to work hard after getting $100 million upfront?) However, this wave also produced many truly valuable products. So we can't generalize that the "low circulation, high fully valued" (FDV) model is inherently bad. While these tokens were overvalued, they also gave rise to important protocols we know and use today. Take Ethena, for example—I really like this project, but it's undeniable that their "giving too much, too early" mechanism compromised their ability to "grow their token" early on. But they're undoubtedly one of the best products in the crypto world. There are many other such "double-edged sword" projects. This period also saw the birth of projects like Solana and Uniswap. While their governance models may be questionable today, it's undeniable that they weren't entirely without merit. Is there a way to avoid this? Perhaps. Ultimately, however, these are just growing pains for the industry—and even four years later, we're still experiencing their aftershocks. 3. Coexistence of Extremes: A Return to "Extreme" Speculation The crypto industry experienced a kind of existential crisis, particularly after the FTX collapse. Many began to believe that "all projects are scams" and that most crypto projects are just "get-rich-quick schemes." I once shared this sentiment, but understanding the nuance is crucial. Just because it looks like a casino doesn't mean the entire industry is one. Stablecoins and tokenization are proving they have significant real-world use cases—far beyond simply issuing memecoins or providing USD trading pairs for long-tail assets. During this phase, projects entering the market essentially fell into two categories: pure memecoins (like dogwifhat and pepe) and projects with a more narrative logic (like AI agents). While valuations have significantly corrected, you might think, "This is all a joke," but remember—"It's a memecoin" doesn't mean it'll always be a memecoin. This is also part of the industry's slow maturation process. Some projects, like REI, have already made the transition from meme to serious venture. Finally, continuing to hold onto the "everything is a memecoin" mentality will lead to significant losses in the coming years. Because: 4. The integration of legitimacy and digital markets We are entering the "adult age." Institutions are truly here, and they're very excited. But perhaps because we're so close to the "sausage factory," understanding how sausages are made, we often draw incomprehensible conclusions. For example, many crypto professionals expressed pessimism about the Circle IPO simply because they "understand" the bearish logic too well. Knowing too much can sometimes be a curse. This is why a cynical mindset of "everything is a joke" can ultimately be so damaging—because when you easily dismiss everything, you also lose the ability to truly believe. Take Ethereum, for example. It was one of the worst-performing assets over the past two years—many large holders capitulated. It was branded with all sorts of derogatory terms, and at one point, we all almost sincerely believed that decentralization had failed and that Ethereum would never see the light of day. But look at it now. Do you think Tom Lee would care (or know about) the embarrassing video of the Ethereum Foundation's leadership singing and dancing on stage? Do you think institutions like BlackRock—which even launched a tokenized fund on Ethereum—would care about the Ethereum Foundation's image as a "soft-hearted, white-collar guy"? Of course not. This is something you must truly understand. The entire crypto community seems to have forgotten how to "dream," while traditional finance is relearning how to "dream." As digital assets become increasingly mainstream, we will usher in more opportunities—and attract more and more truly outstanding builders. This is what I mean by the "internet capital market." We are entering an era of potential unprecedented in the past five years—an era of the perfect fusion of regulation, technological prowess, and capital. Part of this will inevitably move to blockchain. I'm not even exaggerating when I say that some of the most valuable companies in the coming years will be born through on-chain token issuance. In fact, this is already happening. Hyperliquid embodies the pinnacle of the "internet capital markets" concept. They have no venture capital (as far as I know) and no traditional equity structure—just an on-chain token, and they weren't even initially listed on an exchange. Let me repeat: Hyperliquid is a $40 billion business with no fundraising slides or cap table baggage. It's a pure on-chain behemoth that emerged from nowhere, dominated the market, and is now on track to reach $1 billion in annualized revenue—a complete leap from 0 to 1. This is the purest embodiment of the internet capital markets. But before you think this is a Hyperliquid promotional post, let me step back and say: I don't think this story ends with Hyperliquid. I believe we'll see many more similar projects emerge in the coming years. Isn't this exciting? We're about to enter an era of abundance—don't let your inner cynicism destroy the dreams you once held. But what hurts me most is this: all of this has been obvious to those with vision, yet we're still obsessed with snagging a 50% return on some random shitcoin because that's what we've been trained to do for the past four years. It's time to dream bigger—and the playbook is already here. This is a huge opportunity for investors, operating partners, and working alongside project teams. We no longer need the old chains that bind us. For too long, people have been bound by the old structures—but in the era of "internet capital markets," holding 5-10% of your own token and building it into a $100 million or $1 billion product will yield returns far beyond your wildest dreams. Yes, fundraising is still necessary; yes, there's nothing wrong with an ICO. But—look at the path Hyperliquid has taken, if you're truly confident in your product. Look how wealthy their founders are now. They have no VCs, no cap table burdens, simply a significant share of their product, which they then directly listed on the "internet capital market." If the market agrees, it—the sole arbiter of value—will reward you accordingly. Do you know what the biggest problem with capitalism is? It's that most participants are too short-sighted. Capitalism does drive innovation, but it doesn't drive it far enough. Many are willing to forgo enormous future potential for a little quick cash—and this goes against the very core power of compound interest. You can certainly cash out 10 million yuan in the short term and abandon the product, but you can also keep working on it and eventually make 300 million yuan. That's true compound interest. Finally, I want to discuss the speculative nature of the market. Indeed, in the short term, the market is a voting machine. We will certainly see the prices of many "worthless" assets skyrocket, and we will also see the prices of some "high-quality assets" far exceed their fundamentals. We may even repeat the same old scenario: project owners dumping shares and running away. But the key point is this: this coming wave of digitalization will attract more truly "reliable" founders to this field. I believe this is a critical trend change, which will bring about a large number of truly valuable on-chain products. Projects like these won't go to zero. But they don't need to. Consider Hyperliquid, Ethena, and Aave—they are all exemplary examples with annualized revenue of $1 billion, stablecoin TVL of $10 billion, and net deposits of $60 billion, respectively. Look at Pengu and Rekt—with a combined 197 trillion views and over 2 million toys sold worldwide, and a beverage brand sold in every 7-Eleven in the US—they all started by issuing tokens on-chain. We can certainly debate whether they're overvalued or undervalued. But I'd rather have that discussion than go back to a time when we were forced to buy into assets backed by promises with no real way to deliver. I'd rather own a piece of the real thing than continue playing the "pass the parcel" scam. If you're stuck on the idea that "every coin is a meme," that's incredibly negative. But it's no exaggeration to say that someone like Jeff from Hyperliquid launching a token project is no longer an exaggeration. The next Steve Jobs could very well be someone issuing a coin on-chain. Some of these assets will become the pillars of future finance. And all of us have the opportunity to participate now. If you dismiss all of this as "pure meme," you're destroying an opportunity for a thousandfold return. This is what I call the "evolution of speculation": We've moved from speculating on a bunch of worthless, unrealized coins to an era of truly hardcore, sustainable, on-chain assets—assets that will define the future of the world. Now, it's time to believe. Believe in the possibilities of the future, not the shadows of the past. Let go of the old chains and completely burn out the bear in you. Because the future is bright, my friends. This, ladies and gentlemen, is what I see as the "internet capital market."
Kikyo
Brian
Alex
Joy