If you're still holding out hope for an altcoin rally, the following data might shatter some illusions.

According to data from a Dune dashboard created by @cgrogan, the number of crypto tokens has surged from over 3.4 million in 2022 to over 39 million in 2025. In 2024 and 2023, the crypto market created more than 10.09 million and 18.7 million new tokens, respectively.

In stark contrast to the explosive growth of altcoins in this bull market, the number of crypto developers is not only failing to increase but is actually declining. The Electric Capital Crypto Developer Report shows that the total number of crypto developers dropped by 7% in 2024 and by 24% in 2023.

The crypto market has become an unabashed "token factory," churning out new tokens and casino-like innovations with little to no real paradigm shifts. Behind the promises of fairness and overnight riches lies an extremely low cost of malfeasance and a large number of defrauded retail users. In this long-term player-versus-player (PvP) environment, all significant participants, including users, have been conditioned to become shrewd short-termists.

Yesterday, the Crypto Fear and Greed Index dropped to 10, the lowest level since June 2022. @ZKSgu argued against the externalities of Crypto, saying, "Even the players in the field are struggling to stay."

Exchanges and VCs, the most criticized participants in this bull market, are now looking for or being forced to exit. The veteran crypto derivatives exchange BitMEX is seeking a sale, and according to insiders, the largest crypto options exchange, Deribit, may have already completed a merger agreement, with a deal potentially worth up to $5 billion.

The entire crypto space is experiencing a wave of mergers and acquisitions. According to RootData, in just the first two months of 2025, there have been over 20 M&A events in the crypto space, averaging more than 10 per month.

Many VCs are facing elimination. YettaS's biggest takeaway from Consensus HK was the dire state of VCs: some couldn't raise their next round of funds, others lost half their staff, some shifted to strategic investments instead of independent ones, and a few even considered issuing Memes to raise capital.

Investor @26x14eth is urging young people not to waste their most valuable time mining in the crypto space, but to seek internships in promising fields like AI and robotics. This is not the 2017-2021 period when everyone could make money; the most precious asset now is time.

However, some are waiting for a turnaround. Crypto influencer @cmdefi is not so pessimistic. He feels that the current market is similar to 2018-2019, when the ICO bubble burst and people thought the market was hopeless and full of scams.

"But the DeFi Summer came in 2020. Speculative capital decreased, and the market focused more on application innovation. Stay in the game," he said.

This bull market is indeed of hellish difficulty.

There is almost no surprising crypto construction. From Trump's celebrity coin "harvest" wave, to Pi coin's listing on major exchanges, and then to the recent Safe hack, people have woken up to the absurdity and fragility of the crypto system.

The depiction of the current crypto ecosystem by overseas influencer @sherlock has resonated with the market. Amidst the fragile crypto construction, conspiracy groups are everywhere.

Money is harder to make in this bull market.

Players who experienced the last bull market may be particularly frustrated. Exchanges like Binance, which were the birthplaces of the last round of wealth myths, have become dumping grounds for project teams' "puppy coins." The so-called alpha exchanges are now the peak. PrestoResearch found that in the first month of 2025, all tokens listed on Binance fell by more than 70%.

If you are holding one of the top 20 market cap "beta diamonds," you are no longer rewarded. Since July 2024, the top 20 tokens have seen average declines of over 60%. Even the "wool party" (speculators) lament that despite continuous upgrades, they still can't escape being "counter-wooled."

Where is all the money going if there is no real crypto construction and most people can't make money?

Conflux co-founder Yuan Jie may have revealed the truth: apart from a few lucky and smart individuals, most of it flows to the various stakeholders in the "token factory" assembly line.

Yuan Jie shared on Twitter, "The 'token factory' includes not only VCs, serial entrepreneurs, market makers, OL Agencies, studios, whales, and exchanges, but an entire assembly line that, like vampires, greedily sucks the lifeblood out of this industry and its participants."

In the crypto market, token creation and sales are the biggest business models.

Under this "token factory" model, the wealth creation process for project teams mainly focuses on two core stages: chip allocation and listing. The assembly line token issuance model is as follows:

1. Obtain low-cost chips by finding founders endorsed by the core circle (such as Vitalik, A16Z, Binance, etc.) or influential meme leaders.

2. Fabricate a beautiful narrative using artificial data (TVL, on-chain data, node scale, etc.).

3. Align interests with the KOL group to complete Twitter shilling (promotion).

4. Hunt down key decision-makers on exchanges (like He Yi) to complete the final step.

5. After listing, start dumping through market makers and repeat the process for the next project.

An investor in both Web2 and Web3 told ChainCatcher that because there is no R&D investment and the team doesn't need to hire many people, as long as they complete the listing and survive the harvest, "the market's elimination mechanism has completely failed, and junk projects and tokens keep proliferating."

But when retail users no longer easily fall for the "narrative"套路 of project teams and VCs, an even more brutal meme coin issuance model emerged. The same methodology, only without VCs this time.

Behind the seemingly fair token issuance with no barriers lies an extremely low cost of malfeasance. Primitive Crypto investment partner @YettaSing believes that the meme model is essentially a darker on-chain world than the VC model. Due to the lack of product and technical support, "absolute fairness" is often just a facade. The Libra celebrity coin scandal lifted the last veil off the meme model.

With the wealth effect failing everywhere, the industry is beginning to collectively reflect and hold people accountable.

The recent public opinion has again targeted the wool party studios. Crypto influencer @mscryptojiayi believes that the inability of altcoins to rise should be traced back to the moment when the "bribery system" became prevalent. The first shot of industry change should be fired at the wool party studios.

In her view, studios colluded with project teams to create a "false boom" in the industry. This not only diluted the expected returns of retail users and weakened their long-term loyalty to projects, but also caused the community to regress from a value community to a market of interest transactions. It also laid the groundwork for a crash in the secondary market.

She criticized that many studios without principles colluded with fraudulent projects, engaging in shameless behaviors such as building rat farms, deceiving exchanges, and users.

However, airdrop track influencer Ice Frog @Ice_Frog666666 refuted this. He believes that the "false boom" is a result of the industry's distorted development, not the cause. Studios are not the biggest beneficiaries or rule-makers. If the knife does not target the biggest beneficiaries and rule-makers, reform will not be effective.

In addition to wool party studios, in this bull market, VCs and CEXs are considered the two major beneficiaries who colluded with project teams and have been repeatedly attacked.

During the Hong Kong Consensus Conference, one Crypto VC even criticized the rampant junk coins, saying, "90% of VCs should shut down."

The rise of VC coins also originated from the fact that there were too many scams after the ICO. Projects screened and endorsed by VCs were gradually recognized by retail investors.

However, this leader of retail investors has lost trust. Retail investors believe that VCs can obtain chips at a lower cost and have information advantages, colluding with project teams to dump tokens and harvest users.

In this bull market, VC coins generally have high valuations and low liquidity, causing crashes upon listing, which is also the source of community user dissatisfaction.

He Yi also said in last year's AMA response to the listing controversy that "some VCs are indeed the core reason for the inflated prices."

Retail investors are always the ones who get hurt.

Exchanges, as the most powerful link in wealth creation, are naturally considered by the market to be partly responsible.

Binance, Coinbase, and other major exchanges have been frequently attacked for listing controversies in the past year. The exorbitant listing fees of CEXs were once seen by Moonrock Capital CEO Simon as the biggest reason for project teams' inability to bear and market liquidity bleeding.

Although He Yi later denied the "exorbitant" listing fees, the listing mechanisms of CEXs, "sisterhood groups," and insider trading are still questioned as one of the culprits for junk projects to list and harvest.

Although He Yi has repeatedly stated that Binance has a transparent and complex listing process, the recent quick listing and immediate crash of the meme TST on the BNB chain have even led Zhao Changpeng to question Binance's listing issues.

Not only exchanges and VCs, but almost any beneficiary in the "token factory" can be "revolutionized." Crypto influencer @CyberPhilos believes that the three major pests in the Crypto world are CEXs, KOL Agencies, and market makers.

A common view is that the key participants in this bull market are too path-dependent and lack sufficient native innovation. After no new external liquidity enters, everything fails. But is this the result or the cause? Why can every link in the chain become a "pest"?

Overseas influencer Murtaza reflected, "Wealth came far earlier than utility, and it is not just a small mistake that will correct itself over time. It actually poses a fatal threat to the technology's potential to realize its potential."

Murtaza mentioned that the global crypto industry's market cap exceeds $2 trillion. Typically, an industry of this scale forms only after it has developed something useful to society.

Cypher Capital co-founder Bill and Nothing Research partner @0x_Todd have similar views in reflecting on the dilemmas of VCs and exchanges.

Bill said that Web3 venture capital and Web2 venture capital follow completely different logics. The former emphasizes "early fame is key," and the quick wealth creation model encourages founders to chase trends, focus on marketing, and rush to list on exchanges.

In Bill's view, Web3 actually needs more "patient capital" – venture capital that adopts a Web2-style approach and supports founders in building long-term value in the main market, allowing teams to focus on product development instead of rushing to cash out.

The CEX listing dilemma may also stem from the premature cashing out of project teams. @0x_Todd believes that compared to traditional Web2 market IPOs, the problem with Crypto protocols is that they enjoy the benefits of traditional listings: investor exits/incentivizing employees, without bearing any of the obligations of traditional listings.

The absence of crypto regulation is also a key issue. @0x_Todd said, "Bribery, faking, volume pumping, and deception" are all used because there are no punishments.

Currently, crypto panic is at an extreme, and although everyone is holding people accountable and reflecting, they are collectively trapped. Whether the industry can truly "scrape the bone to treat the wound" and welcome a clearing moment remains unknown.