Last weekend, Du Jun, co-founder of ABCDE, officially announced that "ABCDE Capital has halted new project investments and suspended the fundraising plan for the second phase of the fund."
As soon as the news broke, the market was shaken. Some believe that this event indicates that the primary investment environment in the crypto market is so harsh that investment institutions are struggling to cope; others think this move may be a necessary choice to cut losses in time; and still others believe that the subsequent emergence of incubators signifies a shift in the focus of crypto capital to directly issuing tokens. Odaily will sort out the follow-up to this event in this article and briefly discuss the possible directions of crypto capital.
ABCDE ends investment, Vernal incubator takes over
In the tweet announcing that ABCDE Capital will stop investing in new projects, Du Jun briefly shared the subsequent plans:
Launch of the new incubator brand Vernal, shareholder announcement in May, incubation rules, and the first batch of projects;
Engage in secondary trading. Detailed buying targets, buying volumes, and buying reasons will be announced in May.
A brief summary of the ABCDE Phase I fund investment overview: invested nearly 40 million USD, supported over 30 projects, and led more than 50% of the projects.
In addition, Du Jun emphasized that this move "is entirely my personal desire to change my position and rethink how to participate in the development of the industry. The team is great, and there are no issues with fundraising; the two cornerstone LPs are well-funded and willing to continue supporting. This is not a matter of funds or capabilities, but a choice of direction."
In other words, after experiencing a primary investment that was contrary to the short-term profit-seeking ecological atmosphere of the market, Du Jun's interest shifted towards "things that truly drive industrial progress," hoping to "accompany mission-driven teams to incubate enterprises that can genuinely bring long-term value to the industry and society. As a member of the industry, I believe we have a responsibility to promote a return to rationality and health in the ecosystem, rather than being ensnared by short-term games."
It must be said that, from this statement, it can be regarded as a significant setback for long-term value investors with idealistic sentiments.
In the current wave of everyone diving into the speculation of Meme coins, the participation in the VC coin market has cooled down, with countless projects falling into a vicious cycle of "financing - listing - dumping - disappearing," leaving investors and retail traders confused in the wind, paying for their losses. The market is increasingly leaning towards short-term "one wave" harvesting from each other, rather than long-term technological development, real user growth, and a gradual rise in coin prices.
Of course, this is not a system mechanism that can be decided by any institution or user. This round of cycles has seen mainstream coins, including ETH, as well as altcoins, experiencing varying degrees of decline, and the projects invested by ABCDE are no exception. According to statistics from crypto KOL @Anymose 96, among the projects that ABCDE has invested in and issued tokens, the highest drop in coin price has reached 95.5%.
A microcosm of counterfeit blood flowing like rivers.
Based on this, capital institutions situated in the upstream ecological niche of the crypto ecosystem can no longer sit still, and urgently need a version update to better navigate the current market pain period.
New Choices for Crypto Capital: Balancing Primary and Secondary Markets, Embracing New Narratives
Looking at the current market, crypto capital is gradually diverging into two main routes:
A type represented by ABCDE, which chooses to invest and trade in the secondary market while taking into account the primary level, seeking better market performance and capital returns;
Another category chooses to bet on new narratives such as AI and MCP, seeking possible future paths through a broader range of attention, capital scale, and application products. This is also one of the important reasons why recent investment projects are mainly concentrated in fields such as computing, data, and AI.
In this regard, the main changes in the market are reflected in the effective contraction of capital forces and the change in narrative direction; what remains unchanged is the main logic of the cryptocurrency market - the continuously updated and iterated asset types and asset issuance methods.
In this regard, the summary by crypto KOL Crypto Weituo is quite accurate:
The teams that continue to be rewarded in the market are those that "can continuously create assets and markets with high volatility and high liquidity at the lowest cost." Applications that cannot create volatility and liquidity narratives have basically gone bust: such as the "Web3" logic of "reconstructing Web2" mentioned by @YeruiZhang: Social, Gaming, ID, one counts as one. Because these projects are essentially products of the "platform - application" logic of traditional big companies, which ultimately commercialize applications (harvesting). This logic requires scale and decreasing marginal costs, not liquidity.
But what is the crypto world? Cryptocurrencies can be "commercialized" from day one, and liquidity is an inherent indicator of "commercialization." Abandoning this primary indicator means that you do not belong to the crypto world, and your valuation model and comparisons with competitors will fall back to Web2, where you can't compete with Web2 counterparts— in the crypto world, liquidity is the moat, and mechanisms are the main assets (rather than "application" products).
This aligns with the viewpoint mentioned earlier in the article "Web2 VS Web3 AI Projects: Why is the Gap So Large, When It's All About Money?" The Web3 projects are focused on creating assets, refining and sculpting these assets as a product, ultimately benefiting applications or detaching from them. This is how they can achieve liquidity aggregation and resource allocation of attention over a longer time scale.
From this perspective, the move of crypto capital towards secondary investments is somewhat inevitable—because in a capital market where liquidity is increasingly concentrated, attention and volatility persist, and gambling and probability coexist.
Apart from the RWA and PayFi tracks that tell stories to the outside world, the main storyline of everyone will ultimately return to the word "trading," which is the main battlefield for crypto players.
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ABCDE stops fundraising, encryption capital urgently needs a "version update"
Written by: Wenser, Odaily
Last weekend, Du Jun, co-founder of ABCDE, officially announced that "ABCDE Capital has halted new project investments and suspended the fundraising plan for the second phase of the fund."
As soon as the news broke, the market was shaken. Some believe that this event indicates that the primary investment environment in the crypto market is so harsh that investment institutions are struggling to cope; others think this move may be a necessary choice to cut losses in time; and still others believe that the subsequent emergence of incubators signifies a shift in the focus of crypto capital to directly issuing tokens. Odaily will sort out the follow-up to this event in this article and briefly discuss the possible directions of crypto capital.
ABCDE ends investment, Vernal incubator takes over
In the tweet announcing that ABCDE Capital will stop investing in new projects, Du Jun briefly shared the subsequent plans:
Launch of the new incubator brand Vernal, shareholder announcement in May, incubation rules, and the first batch of projects;
Engage in secondary trading. Detailed buying targets, buying volumes, and buying reasons will be announced in May.
A brief summary of the ABCDE Phase I fund investment overview: invested nearly 40 million USD, supported over 30 projects, and led more than 50% of the projects.
In addition, Du Jun emphasized that this move "is entirely my personal desire to change my position and rethink how to participate in the development of the industry. The team is great, and there are no issues with fundraising; the two cornerstone LPs are well-funded and willing to continue supporting. This is not a matter of funds or capabilities, but a choice of direction."
In other words, after experiencing a primary investment that was contrary to the short-term profit-seeking ecological atmosphere of the market, Du Jun's interest shifted towards "things that truly drive industrial progress," hoping to "accompany mission-driven teams to incubate enterprises that can genuinely bring long-term value to the industry and society. As a member of the industry, I believe we have a responsibility to promote a return to rationality and health in the ecosystem, rather than being ensnared by short-term games."
It must be said that, from this statement, it can be regarded as a significant setback for long-term value investors with idealistic sentiments.
In the current wave of everyone diving into the speculation of Meme coins, the participation in the VC coin market has cooled down, with countless projects falling into a vicious cycle of "financing - listing - dumping - disappearing," leaving investors and retail traders confused in the wind, paying for their losses. The market is increasingly leaning towards short-term "one wave" harvesting from each other, rather than long-term technological development, real user growth, and a gradual rise in coin prices.
Of course, this is not a system mechanism that can be decided by any institution or user. This round of cycles has seen mainstream coins, including ETH, as well as altcoins, experiencing varying degrees of decline, and the projects invested by ABCDE are no exception. According to statistics from crypto KOL @Anymose 96, among the projects that ABCDE has invested in and issued tokens, the highest drop in coin price has reached 95.5%.
A microcosm of counterfeit blood flowing like rivers.
Based on this, capital institutions situated in the upstream ecological niche of the crypto ecosystem can no longer sit still, and urgently need a version update to better navigate the current market pain period.
New Choices for Crypto Capital: Balancing Primary and Secondary Markets, Embracing New Narratives
Looking at the current market, crypto capital is gradually diverging into two main routes:
A type represented by ABCDE, which chooses to invest and trade in the secondary market while taking into account the primary level, seeking better market performance and capital returns;
Another category chooses to bet on new narratives such as AI and MCP, seeking possible future paths through a broader range of attention, capital scale, and application products. This is also one of the important reasons why recent investment projects are mainly concentrated in fields such as computing, data, and AI.
In this regard, the main changes in the market are reflected in the effective contraction of capital forces and the change in narrative direction; what remains unchanged is the main logic of the cryptocurrency market - the continuously updated and iterated asset types and asset issuance methods.
In this regard, the summary by crypto KOL Crypto Weituo is quite accurate:
The teams that continue to be rewarded in the market are those that "can continuously create assets and markets with high volatility and high liquidity at the lowest cost." Applications that cannot create volatility and liquidity narratives have basically gone bust: such as the "Web3" logic of "reconstructing Web2" mentioned by @YeruiZhang: Social, Gaming, ID, one counts as one. Because these projects are essentially products of the "platform - application" logic of traditional big companies, which ultimately commercialize applications (harvesting). This logic requires scale and decreasing marginal costs, not liquidity.
But what is the crypto world? Cryptocurrencies can be "commercialized" from day one, and liquidity is an inherent indicator of "commercialization." Abandoning this primary indicator means that you do not belong to the crypto world, and your valuation model and comparisons with competitors will fall back to Web2, where you can't compete with Web2 counterparts— in the crypto world, liquidity is the moat, and mechanisms are the main assets (rather than "application" products).
This aligns with the viewpoint mentioned earlier in the article "Web2 VS Web3 AI Projects: Why is the Gap So Large, When It's All About Money?" The Web3 projects are focused on creating assets, refining and sculpting these assets as a product, ultimately benefiting applications or detaching from them. This is how they can achieve liquidity aggregation and resource allocation of attention over a longer time scale.
From this perspective, the move of crypto capital towards secondary investments is somewhat inevitable—because in a capital market where liquidity is increasingly concentrated, attention and volatility persist, and gambling and probability coexist.
Apart from the RWA and PayFi tracks that tell stories to the outside world, the main storyline of everyone will ultimately return to the word "trading," which is the main battlefield for crypto players.