Written by: @0xuberM
Translated by: Saoirse, Foresight News
Editor's Note: This article analyzes the current state of Launchpads, creators, and traders from the perspective of incentive mechanisms. It points out that Launchpads are driven by trading volume, creators lack motivation to support token prices, and traders have become "daredevil squads," forming a vicious cycle. Currently, only VCs and insiders are motivated to push up token prices, leaving ordinary traders in a predicament. The article objectively presents the market situation; although it does not offer solutions, it provides an important perspective for understanding the logic of the crypto market. The following is the translated content:
Incentive Mechanisms
Incentive mechanisms are the core driving force behind how the world operates. If you want someone to do something, you just need to create an environment or scenario where they are rewarded for completing that task—this is a basic law of human nature.
But currently, on-chain tokens (especially those issued via Launchpads) lack incentive mechanisms to drive price appreciation, which is an issue that urgently needs attention.
The Operational Logic of Launchpads
Yesterday, I posted a related tweet in a sarcastic tone, but now I want to emphasize one point: token issuance platforms (Launchpads) have no motivation to push up the price of any particular token, except under certain special circumstances (which we’ll discuss later).
The operational model of these platforms is essentially similar to that of a casino; for them, the only important metric is "trading volume."
This is precisely why "permissionless issuance" and "bonding curves" (a mechanism that algorithmically adjusts the supply and price relationship of assets) have become mainstream—just as casinos constantly introduce new lottery games, platforms also want to provide as many speculative opportunities as possible, attracting more participants by letting a few people "hit the jackpot."
So, how do token issuance platforms make a profit?
It's actually very simple: they only need to "exist" to earn revenue. On one hand, they provide ordinary people with a permissionless channel to issue tokens; on the other, they offer investors speculative tools through bonding curves. If they want to further expand, platforms must compete for market share, and there are two common methods:
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Conduct marketing campaigns: either spread negative news (FUD) about competitors or emphasize their own "differentiation," even if their actual business is not fundamentally different from their rivals;
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Push up the price of certain tokens: this is considered the "best marketing strategy" and can quickly attract user attention.
I have observed a pattern: token issuance platforms and their teams only go all out to compete for market share in two situations: first, when their market share is taken by competitors and they need to win it back; second, when they want to deliberately suppress competitors and damage their reputation.
Interestingly, whenever these two situations occur, a few tokens on the platform always start to rise in price, even reaching high valuations. They slow down the pace of large-scale token issuance, use "green candles" (symbolizing price increases) and marketing tactics to attract users; once users believe "they can make money here," they resume large-scale token deployments, greatly increasing trading volume—this is not a criticism, just an objective observation.
To be honest, if I were a member of a token issuance platform team, I might adopt the same strategy. After all, the essence of a platform is a business organization, and the core goal of business is to maximize profits.
Creators' Behavioral Tendencies
Just like token issuance platforms, creators (such as streamers) also have no incentive to push up the price of the tokens they issue. Currently, the revenue mechanism for creators is highly similar to the "permissionless issuance" model—this model benefits creators just as directly as it does those who frequently issue tokens.
You may often hear creators say: "Look, I can make so much money just by turning on the camera!" They use this approach to attract more creators to join, and more creators mean more token issuance, which in turn creates more speculative opportunities.
For creators, the profit logic is also simple: they only need to "exist"—turn on the camera and issue a token for speculation to earn revenue. Of course, to make big money, long-term persistence is required, but even then, long-term success is not guaranteed.
After all, in the crypto space, user attention is fleeting, and long-term success is inherently uncertain. In such an environment, it’s easy for creators to develop a "make a quick buck and leave" mentality, which is actually an inevitable result of the incentive mechanism.
Traders: The "Trenches" and "Daredevil Squads" of the Crypto Market
So what about us traders? What is our incentive mechanism? What are we driven to do?
The answer is harsh: we are incentivized to "cannibalize each other." After all, the "trenches" of the crypto market were dug by us (never forget this). The meaning of "trenches" and "daredevil squads" is clear—ordinary traders like you and me are essentially "expendable cannon fodder," the soldiers on the front lines of the market.
Since no party is motivated to make any asset’s price rise in the long term, we can only participate in this "game" in a more brutal way. There is no "player versus environment (PVE)" here, only competition and mutual harvesting.
Because the upside for token prices is limited, we have to take aggressive measures to increase our chances of profit, such as using multiple wallets to pre-lock 10% of a token’s supply ("multi-wallet pre-staking"). In this market, "timing your entry" is crucial—you must be early enough, or you’ll likely become someone else’s "exit liquidity" and be ruthlessly harvested.
You might ask: How can traders profit? The answer is: we must work harder than others. Unlike token issuance platforms and creators who "profit easily," we need to constantly improve our skills, accumulate industry influence, develop judgment, expand our network, and keep up with information across multiple fields—only by doing all this do we have a chance to make money in the market.
Even when we encounter tokens that surge in the short term (such as some recent CCM tokens), we lack the motivation to hold them long-term, because new "speculative opportunities" (like new lottery tickets) will soon appear. The "machine" of this market must continuously produce "lottery tickets" to keep running.
And behind every new opportunity, there are massive losses for traders, just as trenches in reality are filled with the corpses of the fallen. For example: for every account that profits via the Axiom platform, there are hundreds of accounts whose portfolios go to zero.
It may sound like I’m complaining, but I myself am a participant in this "game," so to put it nicely, maybe I’m a "hypocrite."
Currently, I have three thoughts: maybe I should "adapt" to the current market rules? Maybe I should quit the game altogether? (Unfortunately, I’m not someone who gives up easily.) Or maybe I should explore other fields? (In fact, I’m already doing so.)
Market Cycles and Reflections on Solutions
Will this "game" go on forever? I don’t think so. History has proven time and again that this vicious cycle will eventually end in one way or another: winners keep profiting, losers are constantly eliminated; until at some point, there are no new "losers" in the market, and the former winners become the new losers.
And when everyone is exhausted and chooses to exit, those token issuance platforms will reappear, launching a few "premium new lottery tickets," attracting everyone back in—this is like an "ouroboros," forming an unbreakable closed loop.
Speaking of which, there’s an interesting phenomenon: recently, the best-performing tokens are almost never those issued via bonding curves, but rather those projects where "a large number of tokens are locked by insiders"—we even jokingly call this "illegal operation."
Why is this? The core is still the incentive mechanism. Currently in the crypto space, the only ones motivated to make token prices rise in the long term are VC teams and project insiders—because only if token prices rise over the long term can they sell at higher valuations when tokens unlock and make huge profits.
Even more ironically: the traders who are currently "winning big" in the market are precisely those who buy "low-quality assets packaged by VCs"—which is exactly the problem the bonding curve model was supposed to solve.
So, what’s the solution? Honestly, I’m not sure. But one thing is clear: if a project team wants their token to succeed, they can’t risk issuing via a bonding curve—otherwise, there’s a high chance of "some 17-year-old using Axiom multi-wallets to grab 10% of the token supply."
As an on-chain trader, I’m even more aware: the "expected value (EV)" of participating in this "game" is getting lower and lower. In any case, the market must change, and the incentive mechanism must be adjusted—otherwise, this cycle will only keep repeating.
I don’t have a ready-made solution, only some preliminary ideas, and I’m not sure if they’re feasible in practice. I don’t blame anyone for the current situation; it’s just the inevitable result of the existing incentive mechanism. Unless some institution or model can completely break the current pattern, it’s hard for the incentive mechanism to change substantially.
I’m just an active trader and a user of token issuance platforms. I’m writing down these thoughts in the hope that platform teams will see them (although with each cycle, my hope diminishes a bit, and I think others may feel the same).
As people often say: everyone acts in their own interest. Before the market truly changes (if it ever does), I wish all the "daredevil squads" good luck—may the more experienced and professional "soldiers" win in this game.
