Crypto Assets Project: The Game from Nothing to Something

In the field of Crypto Assets, we often see projects that have only glamorous websites but can raise huge amounts of funds. This phenomenon is not accidental, but rather a result of game theory working behind the scenes.

Recall the scene in the American TV series "Silicon Valley": companies without revenue are valued higher than profitable companies. The investors' explanation is that having actual income raises the question of "how much," while lacking revenue can inspire limitless imagination.

The crypto assets industry pushes this logic to the extreme: the more ethereal the product, the stronger the fundraising ability may be. This is not a flaw; rather, it has become one of the most profitable characteristics of the industry.

Realistic constraints on valuation

Having a real product means facing the harsh reality:

• The number of users that often disappoints
• Frustrating technical limitations
• An unforgeable metric

In contrast, the potential of projects with only a white paper is limited only by imagination. This creates a paradox: practical projects are instead punished by the market.

Game of asymmetric information

In Crypto Assets fundraising, the amount of information held by each party varies:

• The project founders understand the whole picture
• Venture capitalists are aware of some situations
• Ordinary investors know almost nothing.

For founders lacking actual products, the best strategy is obvious:

• Keep the description vague but exciting
• Emphasize potential rather than the current situation.
• Create an atmosphere of fear of missing out

The more vague the statement, the harder it is to falsify. The fewer functions there are, the fewer problems are exposed.

Why is no one asking for better results

The "prisoner's dilemma" in game theory explains why people make harmful and unbeneficial choices. There are similar situations in Crypto Assets investment: if everyone insists on investing only when they see viable products, the market will be healthier.

However, waiting may mean missing out on early high returns. The earliest entrants usually profit the most, even if the project ultimately fails. Therefore, the seemingly rational individual behavior of investors (entering early based solely on promises) leads to an overall irrational outcome (valuing hype over substance).

Trading Dreams and Reality

A project with only online articles can claim to completely revolutionize the industry and create trillion-dollar value. In contrast, projects with actual code must face:

• Actual number of users
• The limits of technical capability
• Disadvantages in Competition

This has produced what is known as the "null premium"—a valuation premium obtained by completely detaching from real-world constraints.

collective hype

When it is difficult to discern the quality of a project, people look for common signals:

• Influencer's Review
• Exchange Listing Status
• Token price increase

Projects lacking products can allocate all their resources to generating these signals, rather than actual development. In the Crypto Assets field, marketing often outweighs technical development.

real case

There are many cases in the Crypto Assets field where huge amounts of funds have been raised solely based on white papers:

• A certain project achieved a valuation of billions without launching its mainnet, proving that in this field, the more abstract the product, the more people can project their dreams onto it.
• Another project claimed to handle over 160,000 transactions per second and raised $350 million in blockchain funding, but when launched, it could only process 4 transactions per second. The less evidence required for technical claims, the more funding is obtained.
• There are projects proposing the idea of exchanging biometric data for tokens, attracting billions of dollars in investment.

These cases all follow a pattern: the more abstract or technically complex the promises, the more funding is raised, and the greater the risk of eventual failure.

Why is it difficult to change this situation ###

Logically, investors should demand to see viable products. However, game theory explains why this is difficult to achieve:

• The fear of missing out is real.
• Most investors lack the ability to assess technological commitments.
• Fund managers are more focused on short-term returns rather than long-term success.
• Personal interests conflict with the healthy development of the market

This is why projects that lack products often raise more funds than those that actually develop practical products.

The game rules themselves are fine; it's just that some people are too skilled at exploiting these rules.