The harsh truth of Web3 is right in front of us: quickly cashing out through inflated valuations is far easier than building a self-sustaining business.

Just look at the data. 99% of Web3 projects have no real cash flow, yet they spend heavily on marketing and events. Where does this money come from? Tokens and fundraising, not product revenue.

Where is the problem? Too many projects rush to launch tokens and go public. Once the tokens are circulating, marketing budgets skyrocket. To boost the token price, project teams must create hype and spend money on activities. But the consequence is that the core product becomes marginalized, and competitiveness declines.

Careful examination of that 1% of truly profitable projects shows that their price-to-earnings ratios are actually quite reasonable. Conversely, the remaining 99% of projects cannot withstand such valuation scrutiny.

The root of the real problem lies in the mechanism design of early token issuance (TGE). Founders achieve quick liquidity through TGE—regardless of whether the project succeeds or fails, they’ve already cashed out. This has led to a distorted cycle: investor losses fuel the entire system.

Therefore, projects that can survive must have a prerequisite: proven revenue-generating capability. Projects without genuine users or actual sales will eventually be seen through by token holders. The market is maturing rapidly, and investors are no longer fooled by hollow visions.