Author: Jocy, Founding Partner of IOSG

The lives of Binance and OKX are filled with countless wealth creation myths that excite community users, and the industry has entered a fast-money mode.

Behind the success of Alpha, only less than 10% of the 326 launched projects, or 32 projects, have gone live on spot. This means that 90% of the projects launched on Alpha this year ultimately turned into platform fuel. In an unregulated industry, exchanges hold significant power and dominance, and the failure of projects seems to have no necessary connection to the exchanges. However, in an industry lacking regulation, if platforms cannot self-regulate better, it is equivalent to administering a strong drug to the entire industry. The success and collapse of liquidity can happen in an instant, with wealth creation myths flashing quickly and then falling rapidly.

Hyperliquid has achieved great success by leveraging the concept of on-chain Binance, while Aster has gained market share in the Perpdex market by recreating trading volume. It seems that the entire industry is moving towards decentralization and more promising directions. However, in reality, futures and derivatives have always been the most profitable tools for exchanges in this industry. Countless exchanges have used various methods to get their users to start using their Perp products. However, futures and derivatives are essentially a zero-sum game, where retail investors can amplify their gains and losses with leverage ranging from dozens to hundreds of times. Therefore, the aggressive subsidies from Hyperliquid and Aster have led users who have never engaged in derivatives and futures to start trading futures, taking advantage of airdrop opportunities. Even if the final user conversion rate is only 10%, these users may develop a gambling addiction to futures trading over the next six months. PerpDex is particularly good, but excessive incentives and interventions to turn more people into futures gamblers lose sight of the original intention and may easily backfire in the future.

What values should be prioritized in the competition and game between exchanges in the crypto industry? Many exchanges control the liquidity of funds and platform traffic, so launching meme wealth creation myths can better achieve a leading position, attracting countless people. Competition is bound to be brutal, but in an unregulated industry, should leading players seriously reconsider what kind of horse racing mechanism to establish for the industry and what direction to lead the retail investment wave? As crypto practitioners, we have witnessed the rise and fall of bubbles in past cycles and have seen the maturity of DeFi/stablecoins/infrastructure. If leading players can find ways to focus on long-term value tracks and do more difficult yet correct and long-term things, countless industry practitioners will regard them as driving forces and memorable figures years later.

During Trump's cycle, the crypto industry enjoyed numerous favorable policies and unlimited regulatory leniency. However, this unregulated era demands a sense of industry responsibility from top entrepreneurs to help the industry achieve more breakthroughs in this cycle, attracting more powerful entrepreneurs to join and creating numerous companies comparable to ByteDance and Pinduoduo in the crypto industry. I urge exchanges to be more restrained in internal project innovation and liquidity flow and to ask themselves one more question: what value will the things being done today have in three to five years in the industry? The best entrepreneurs often do not only focus on the present; they work together to create a broader future for the crypto industry.

Tips: Of course, it is difficult for many to refuse such lucrative opportunities that come rushing in, and countless rapid wealth creation myths make everyone yearn for them. However, please remember the three principles of investing: preserve your life, participate as little as possible in countless opportunities and minimize losses, and place big bets to make big money in your area of expertise or direction (inspired by discussions with the wizard in Singapore).

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