Written by: Rhythm Xiaogong
Do you still remember the bull market of 2021?
That year, Bitcoin surpassed $60,000, Ethereum reached an all-time high, NFT avatars sold for millions of dollars, and the concept of the metaverse made everyone believe we were on the brink of an internet revolution. The cryptocurrency industry experienced an unprecedented funding frenzy, with venture capital firms rushing in, fearing they might miss the next hundredfold project. In that era of excitement, it seemed that any project labeled 'Web3' could easily raise tens of millions of dollars.
According to analysis by Venture Capital, cryptocurrency startups raised $25.2 billion that year, a staggering 713% increase compared to $3.1 billion in 2020. However, four years later, looking back at the more than 400 high-funding projects, only a very few remain standing strong.
Most projects have already vanished without a trace; they either announced the cessation of operations, transformed into other projects, were crippled by hacker theft, suffered huge negative impacts after the collapse of FTX, or became lifeless zombie projects.
Note: This table includes 67 representative cases from the top 400 projects by funding amount in 2021 that have gone bankrupt, become worthless, or have low operational activity, with a total funding amount exceeding $5 billion. The funding amount statistics are limited to the single annual funding of 2021 and do not include funding rounds from 2020 and earlier or after 2022. Projects marked in red in the table indicate that their current market value is below the total funding amount in 2021.
The most devastating disasters occurred in the field of centralized finance platforms. FTX, once raising $1.32 billion and considered Binance's biggest competitor, collapsed in November 2022, with founder SBF sentenced to 25 years in prison for fraud. Almost simultaneously collapsing with FTX was Celsius Network, a crypto lending platform that raised $750 million and promised users an annual yield of 18% on deposits; its token CEL plummeted from $8 to $0.02, evaporating 99.73%. Names like BlockFi, Voyager Digital, Babel Finance, and Prime Trust once represented the 'formalization' and 'institutionalization' of crypto finance, collectively raising over $500 million, yet they fell like dominoes during the liquidity crisis of 2022.
If the collapse of centralized platforms is due to the fraudulent nature of their business models, then the collective death of NFT and metaverse projects is more like a nationwide illusion dissipating.
In 2021, everyone was talking about virtual land, digital art, and Play-to-Earn games. Axie Infinity raised $159.5 million with the concept of 'play-to-earn', and its token AXS once surged to $164.9, with in-game pet NFTs even being speculated to hundreds of thousands of dollars each. In developing countries like the Philippines, countless people quit their jobs to play full-time, viewing Axie as an opportunity to change their fate. However, when the game’s economic model collapsed, AXS plummeted 99.49% to $0.85, and those who poured their life savings into it ultimately realized that it was just a Ponzi scheme that required a continuous influx of new players.
The representative project of the metaverse concept, The Sandbox, raised $93 million, and its virtual land NFTs were sold out in 2021, with the SAND token soaring to $8.4. But three years later, this so-called metaverse is empty, with very few participants in sporadic events; the official Twitter account is still updating, but the comments section is already a ghost town. Ironically, many NFT platforms focused on music and art have mostly become zombie projects.
Projecting the lessons of 2021 onto today reveals some harsh truths: most projects are products of cycles, and those that truly create lasting value do not exceed 5%, which are usually only identifiable at the lowest points of bear markets. The wheels of history roll forward; 2025 is approaching its end, and a new cycle will begin. When the new tide recedes, how many of today's projects will be found wearing swimsuits?
