Challenges and Opportunities of Crypto Assets Infrastructure

The Crypto Assets infrastructure sector is undergoing significant changes. After years of rapid growth, project valuations are declining, and investors are becoming more cautious. This reflects a gradually maturing market, where relying solely on technological innovation is no longer sufficient to achieve high valuations.

The main dilemma facing current infrastructure projects is severe homogenization, lacking truly breakthrough use cases. Although there have been technological advancements, revolutionary infrastructure that can support entirely new categories of applications has yet to emerge. This means that trading and speculation remain the primary application scenarios for most infrastructure, limiting the potential for transformation in the industry.

Many projects focus too much on forward-looking technological innovations while neglecting the actual needs of developers. They often pursue some advanced elements, such as privacy protection and verifiability, beyond core functionalities. This strategy not only increases the difficulty of early promotion but also makes it hard to obtain effective user feedback.

The surge in infrastructure projects has created an imbalance between supply and demand - too many platforms competing for limited applications. This has led to a large number of "ghost chains" with extremely low usage rates and almost no revenue, forming an unsustainable economic model that relies on the appreciation of tokens rather than actual utility.

A healthy ecosystem requires an efficient feedback loop between application developers and infrastructure builders. Currently, this loop has been broken - application developers are constrained by infrastructure, while infrastructure teams lack clear signals to understand the demands. Restoring this feedback mechanism is crucial for sustainable growth.

Despite the challenges, infrastructure development remains highly profitable. However, the threshold for success has significantly increased - new projects must simultaneously demonstrate concrete use cases, substantial user appeal, and compelling narratives to achieve meaningful valuations.

Characteristics of Successful Infrastructure Projects

Recent successful infrastructure projects exhibit the following characteristics:

1. Pragmatic technical approach: Focus on optimizing existing paradigms, such as improving the performance of EVM, MoveVM, etc., rather than introducing entirely new technologies.

2. Connecting the real world: Integrating with real assets ( RWA ), intellectual property ( IP ) and other Web2 concepts to lower the user understanding threshold and broaden application scenarios.

3. Focus on DeFi and AI: These two areas are the most recognized by the market and can support high valuation infrastructure.

4. Building Ecosystems: Committed to creating or integrating dedicated ecosystems to generate excess value through network effects.

5. Precise market communication: Implement different communication strategies for end users and developers to effectively convey value propositions.

6. Sustainable Economic Model: Establish stable sources of income and avoid over-reliance on token sales.

Future Investment Opportunities

1. Target the underserved Web2 market, create a globally accessible marketplace and introduce innovative financial mechanisms.

2. Create a new category of infrastructure, such as intent-based protocols or infrastructure that adds privacy to blockchains.

3. Focus on projects that meet the actual needs of users and generate stable income.

4. Develop infrastructure that can seamlessly integrate into existing Web2 applications, enabling gradual implementation of blockchain functionalities without affecting the core user experience.

5. Explore innovative ways to unlock new profit models for Web2 applications through tokenization, fractional ownership, and programmable royalties.

As the industry matures, the long-term value of infrastructure will increasingly depend on its ability to meet real needs and generate sustainable income. Projects that can find a balance between technological innovation, market demand, and economic sustainability are more likely to stand out in future competition.