Most TGE tokens are now breaking below their listing price soon after launch, while the small number that move higher often draw compliance scrutiny. Citing a Begin Capital partner, BlockTempo reported that the crypto industry’s much-promoted "tokenized IPO" model has, in practice, become a carefully structured wager in which projects do not necessarily need profits or real users to reach issuance, as long as they can generate enough trading volume. In that setup, retail participants end up absorbing liquidity.
The argument in the article is built around the SAFT structure, short for Simple Agreement for Future Tokens. Under that arrangement, investors provide capital in exchange for contractual rights to receive tokens after a project’s mainnet launch or token generation event. The author describes token issuance under SAFT as a gap opened inside the traditional venture model, with a payoff structure that resembles a blend of prediction markets and gambling.
In Web2, venture firms and founders usually make money through an acquisition or an initial public offering. Both routes are scarce and hard to reach. In crypto, the piece says, a team can still issue a token even if the underlying project has not really succeeded. Once retail buyers step in, liquidity appears almost immediately. The article contrasts that with the classic venture model, where one out of 10 investments may return an entire fund and the other nine can go to zero. In crypto, it says, all 10 projects can theoretically generate returns.
Token issuance is being measured against the IPO process
The author says the structure may look attractive on the surface, but it contains three fatal weaknesses: no real screening, no fundamental basis, and no transparency.
The piece describes an IPO as a process with recognizable guardrails. Companies face strict review, financial data is verified, regulators are involved, and valuation is broadly tied to current profitability and expectations for future earnings.
Crypto works in almost the opposite way, according to the article. Until recently, a project seeking a listing on a top-tier exchange could face review that was astonishingly loose. If trading volume was high enough, a listing could happen. Token market value, in that account, was often almost entirely detached from the project’s actual business fundamentals.
The article adds that investors hold token-side claims while project teams retain operating revenue. That breaks the economic alignment between the two sides. What was once framed as a simplified IPO ended up looking more like a casino. As retail traders lose money, the author says, they become less willing to participate and leave the market.
Profitability and real users are back at the center
The piece says the market is only now returning to basic questions: Can the company make money? Does the product have real users? Are those users actual people, or bots and airdrop farmers?
The author presents that as the deepest problem, because the people who control the process are often the only ones who know what is really happening. Outside participants cannot verify whether key opinion leaders were actually paid for promotion. They cannot judge why a market maker acted in one way rather than another. They cannot explain why a large amount of supply suddenly hit the market within one minute of listing. They also cannot easily trace where marketing budgets were spent, and much of what project teams say cannot be independently checked.
Unless someone is directly involved in operating the project, the article says, they are often left choosing whether to believe a story. For years, many crypto venture investors did not care enough to verify facts, motives, or fund flows, and focused instead on getting a token issued. The piece says that mindset lasted until market participants started going bankrupt one after another.
The old venture playbook is losing ground
The article argues that the sector was driven more by hype than by real enterprise value. To make money, participants had to understand a long list of variables: marketing, KOL promotion, exchanges, market makers, launch platforms, liquidity, listing schedules, and token allocation.
One decision could produce a 500% return, while another could wipe returns out entirely, the author wrote. Telling the difference usually requires years of industry experience and firsthand exposure to the full token issuance process. That is far removed from an IPO. In many crypto market contests, the article says, the objective is not to judge what an asset is actually worth, but to find a way to sell it at a price far above its real value. It adds that many participants became highly skilled at doing exactly that.
In the author’s view, crypto venture capital is now slowly accepting that the old model no longer works, and that this is why the market is changing.
SAFE, SAFT, and due diligence standards are shifting
The article says SAFE and SAFT have become close to standard tools in fundraising rounds.
SAFE, or Simple Agreement for Future Equity, is described as a traditional early-stage Web2 financing instrument in which investors provide capital and receive shares when the company’s equity matures. The piece says Web3 projects are now increasingly mixing the two structures, with part of an investment tied to equity and part tied to future tokens, instead of relying only on SAFT as a bet on post-listing token arbitrage. The author treats that shift as a sign that the market is moving away from pure token speculation and toward a more standardized financing framework.
At the same time, the industry is placing more weight on real revenue and business models that are clear and understandable. Due diligence is also moving closer to what is common in Web2.
Capital is moving toward sectors with proven PMF
The article says more capital is flowing into sectors that have already shown product-market fit, or PMF, including betting and prediction markets, meme coin launch platforms, payments, digital neobanks, fiat on- and off-ramp channels, and artificial intelligence. DePIN and RWA, by contrast, were described as receiving relatively less funding.
The author also says Web3 fundraising used to resemble a frontier market. Now, if a project can raise money in Web3, it should theoretically also be able to raise capital in Web2.
The market’s middle ground is fading, the author says
Looking ahead, the article argues that the industry is maturing. Venture firms that once deployed money blindly have either left the field or learned costly lessons. The firms that remain are building stricter investment processes. The author presents that as a positive development, saying it improves the odds that crypto will produce more applications and products with real-world traction.
The piece ends by saying retail participants are becoming more rational as well. In the current market, the author sees only two approaches left: either acknowledge that a trade is pure gambling and move in and out quickly, or back a project with a real product, real users, and real revenue, where holding the asset follows a defensible logic.
That middle zone is disappearing, according to the article. Lines such as "we are about to launch an amazing product," "everything is progressing smoothly," or "major bullish news is coming next month" once helped people make money, but the author says those pitches are becoming much less effective.