The liquidity of the crypto market is exhausted, and on-chain innovation is the way to break the deadlock.

In the past few days, I delved deeply into the x402 track, and when I turned around, the true face of the market left me stunned. Instead of keeping it to myself, I might as well say it all out at once.

Liquidity has nearly dried up

Since the events related to Trump, the market's liquidity has started to weaken. Subsequently, those increases that seemed like a recovery were, to put it bluntly, just emotions at play. The lack of liquidity is the fundamental issue; this is not a technical story, but a real phenomenon of capital being drained.

The Debt Trap of the Altcoin Ecosystem

Since the moment of the TGE, many altcoins have fallen into a state of heavy debt. The long-term holders who once adhered to their beliefs have disappeared, and there are fewer developers focused on contributing code. Who is entering the market now? Airdrop hunting teams, VC firms with burning bottoms, exchanges eager to cash out, and founders who have worked on projects for years finally wanting to monetize — the common goal of these participants is to exit quickly. So, who will take over? Who is willing to be the last leek?

The historical mission of MEME coin has been completed

MEME coins were once seen as a tool to break the monopoly of high FDV VC coins, allowing retail investors to counter projects with large financing. However, this frenzy has a fatal weakness: the zero technical threshold means it can be infinitely replicated. It appears to launch fairly, but in reality, it is just an assembly line of mass production. This model lacks the support of technological innovation, making it impossible to form long-term value accumulation. Without the technological breakthroughs of VC coins to supplement the narrative from zero to one, the popularity and returns of MEME coins will devolve into an internal PVP game of existing funds, ultimately leading to the entire ecosystem being eroded.

The Exchange's “Internalization” Turnaround

The wave of innovation in on-chain trading platforms—from Pumpfun to GMGN to Hyperliquid—has made traditional exchanges feel the pressure. The performance of these emerging platforms in wealth creation has made CEXs uneasy. The former role of CEXs was to absorb the overflow liquidity from on-chain innovations and amplify market effects. But now they are starting to engage in “selling shovels” themselves, which instead weakens the vitality of the entire ecosystem. When tool manufacturers also want to share in the mining dividends, the ecological balance of this industry is completely disrupted.

Builders are trapped in a hellish dilemma

Why are so many projects in a hurry to launch TGE? Why doesn't the market have the patience to allow products to mature? Why does the responsibility for the entire market's structural imbalance ultimately fall on the project teams and VCs? These questions are too complex, and no one can provide a complete answer. But one undeniable fact is that a large number of builders and VCs are going bankrupt and withdrawing. What's more terrifying than liquidation and going to zero? It's the industry being undermined and the large-scale outflow of talent and capital.

Only on-chain innovation can lead to rebirth

The cryptocurrency industry is no longer what it used to be. It is sick, aging, and even severely ill. The only way to completely change all of this is to initiate a wave of on-chain innovation starting from scratch—a narrative driven truly by technological breakthroughs. Only in this way can the order of this industry be restructured.