VC vs Retail: The Exit Game, Starting with Friend.Tech
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VC vs Retail: The Exit Game, Starting with Friend.Tech
In-depth analysis of the impact of Friend.Tech token price decline on project planning and user retention.
Navigating Web3 tides with focused insightsGuests: Haseeb, Tarun, Jason, Tom
Translation: zhouzhou, joyce, BlockBeats
Editor's Note: This podcast dives deep into the impact of Friend.Tech’s token price collapse on project planning and user retention. It also explores the ethical dilemmas around crypto project exits—especially when teams shut down projects after launching tokens—and examines the differing roles of venture capital (VC) and liquidity funds in the crypto market. The discussion further analyzes the negative effects of airdrop farming, how hedge funds influence market liquidity and efficiency, the tension between market speculation and long-term value creation, and the potential for improving market efficiency.
The following core issues were raised and discussed in this episode:
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Friend.Tech token crash
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Project exit ethics
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Different roles of VC vs. liquidity funds
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Negative impacts of airdrop farming
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Lack of market strategy and arbitrage behavior
TL;DR:
Friend.Tech Token Crash: The Friend.Tech token dropped 96% in price, exposing the risks of launching a token without sustainable product development or user retention strategies.
Project Exit & Ethics: Early-stage token launches have sparked debate about whether project teams bear moral responsibility when exiting—especially when shutdowns are perceived as “rug pulls.”
VCs in Crypto Markets: Low barriers to entry have allowed many VCs into crypto, inflating valuations, fueling hype, and leading to under-delivery.
Challenges of Early Token Launches: Premature token issuance often distorts market signals and undermines long-term project potential and user engagement.
VCs vs. Liquidity Funds: A key question emerges: Are VCs extracting value from the ecosystem, or can liquidity funds enhance market efficiency?
Hedge Funds & Market Efficiency: There is ongoing debate over whether hedge funds improve market efficiency through better liquidity and price discovery.
Airdrop Farming & Wash Trading: Airdrop farming manipulates user growth metrics with fake activity, extracting value without contributing to real adoption.
Haseeb: Our special guest today is Jason Choy, startup heavyweight from Tangent. Jason, you’re based in Singapore, right? Is U.S. politics a hot topic in your circles there?
Jason: Lately, everyone’s been watching what’s happening in the U.S. I mostly operate on U.S. time. Over the past few weeks, we’ve been glued to the Fed movements and political debates. Honestly, this is my least favorite part of the crypto cycle.
Haseeb: Have you been following World Liberty Financial and the Trump family’s DeFi project?
Jason Choy: I heard it’s somehow tied to Aave, and it coincided perfectly with Aave’s token price rebound. But beyond that, I haven’t paid much attention. Anything we should know about it?
Tarun: I think I called it a “rug-style scam” or a “poor man’s exit scam.”
Friend.Tech Token Collapse
Haseeb: This week’s headline story is Friend.Tech, a SocialFi platform that lets users bet on creators by buying their tokens to access private chat rooms. It was huge during the summer of 2023 but gradually cooled off. This year, they launched their own token—but it hasn’t gone well. The token has been in freefall since launch, now down 96% from its all-time high. Its initial market cap was around $230 million; today it’s hovering near $10 million. Recently, Friend.Tech has faced heavy criticism.
About four days ago, Friend.Tech transferred control of its smart contract to a null address—effectively burning their admin keys. As soon as that happened, the Friend Token price crashed, and many accused Friend.Tech of “rug pulling”—launching a token and then abandoning the project, leaving behind an empty shell that can no longer function.
Here’s the twist: Friend.Tech didn’t sell any of their tokens. To our knowledge, no tokens were sold to investors, and even the team didn’t hold any. So this was a so-called “fair launch” token, and the team insists they never intended to shut down the project—the app is still running. Yet, the general perception is that Friend.Tech did a rug pull.
This incident has triggered a broader conversation about the responsibilities of crypto project teams after launching products and tokens. What makes this case particularly odd is that Friend.Tech didn’t sell tokens to retail investors, nor did the team keep any for themselves. So I’d love to hear your thoughts on this situation—especially regarding what responsibilities crypto founders should have when launching a product?
Jason: I actually bought those tokens and lost a lot on Friend.Tech. I had a bunch of airdrops and Keys, joined clubs, and was active on the platform. At one point, I was probably one of the largest holders globally, at least based on public wallets. My tokens are now down 96%, but I still believe they launched a product people genuinely liked—at least for a while. They used a fair launch model, no massive insider sales. Their real problems were user retention and the timing of the token launch.
An anonymous developer built an app, and everyone rallied around it—that’s classic crypto. We saw this a lot during the last DeFi cycle, but less so this time. One thing captures everyone’s attention, becomes the talk of the town for weeks—that was Friend.Tech’s moment. And it spawned clones like Stars Arena on AVAX and countless imitators. It reminded me of the last DeFi wave. I got excited, thinking maybe we’d see a new wave of social apps emerge from this. But so far, nothing’s materialized.
Haseeb: Tom, what do you think about this situation?
Tom: This touches on team accountability and what counts as a “rug pull.” The worst rug pulls are probably the terrible ICOs—raising big money, making grand promises, delivering nothing. That’s what many teams from the 2017 era were accused of. Then you look at NFT or token projects like Stoner Cats—maybe they never promised a TV show, but if you're just selling a JPEG, that’s fine. Or meme coins, which come with no expectations, no roadmap, no promises—they are what they are.
The Friend.Tech team didn’t allocate tokens to themselves. They just built a product. Yet, Racer and the Friend.Tech team seem to be getting more backlash than others. Compared to teams that did nothing, Racer is under disproportionate pressure, which feels strange. The team didn’t hold tokens; they made money via trading fees—around $50 million from platform fees. Normally, such revenue would go into a DAO treasury, and the team might get grants. But in Friend.Tech’s case, all revenue was fully privatized—the team directly profited from transaction fees.
Isn’t that what people want? No admin, no central control, everything decentralized—you run it yourself, and no one can rug you. But depending on sentiment or narrative momentum, things turn negative. I’m not sure why Friend.Tech is being singled out when there are far worse examples in crypto.
Haseeb: True—the anger stems from the fact that everyone knows Friend.Tech the company earned over $50 million in trading fees over 18 months, yet none of that value flowed into the Friend.Tech token. Hasu provocatively pointed out that when you issue a token, people naturally assume it will capture value from the ecosystem. But here, the token seems to only grant club access—it doesn’t capture value from the business itself. The business captured $52 million in value. That’s it. So at least logically, one valid complaint is that they knew people had these expectations, yet chose this path anyway—violating those expectations.
Tom: I think people would have more grounds for outrage if this were a traditional project: team allocates tokens, sells them, raises funds into a multisig, then disappears. But in Friend.Tech’s case, everything—from fee distribution to payment mechanics to system operation—has been transparent and unchanged from day one.
On the surface, I understand the negative sentiment. But deeper down, I don’t think this is that problematic. I think Friend.Tech was always essentially a meme token—that was clear from the start.
Jason: I think many issues could’ve been avoided by delaying the token launch. They launched a token before establishing any value accrual mechanism or achieving product-market fit. The app had strong viral appeal initially, but they failed to solve two big problems. First, the platform naturally became exclusive. Key prices follow a bonding curve, so groups quickly priced out most people once the cost hit 5 ETH. As a result, communities rarely grew beyond 30 members—they never solved scalability.
Second, creators only get one-time payouts. If you earn fees every time someone buys your key, you have no incentive to keep providing value afterward. Sure, users can sell their keys if the creator goes inactive. But creators themselves have little motivation to stay engaged—especially since they have to buy their own keys to join their own group.
If they’d fixed these issues before launching the token, they might’ve sustained momentum. If I recall correctly, they launched the token just as user growth started declining sharply—almost like a desperate move to lure people back with airdrop hopes. So they rushed the token out.
Haseeb: And it did trigger a surge—people returned, excited about new features and club systems. But the features didn’t work, and the experience was terrible. In a way, they wasted the chance to re-engage users drawn in by the airdrop. For a startup, that kind of spotlight moment is incredibly hard to recover from. Friend.Tech finally had its big breakout moment on crypto’s biggest stage—and they blew it. Recapturing that kind of opportunity will be extremely difficult.
Tarun: I was active for a while too, but eventually it turned into people buying my key just to ask me questions. I thought, I don’t have time to be a Q&A bot—ChatGPT already exists. But Friend.Tech actually pioneered the “hype + entertainment” metagame. They were first to create this model: burn keys, collect fees—exactly like meme coin mechanics. Someone provides liquidity, burns the key, and fees are split between creator and platform. That’s precisely what Friend.Tech did—just maybe too early. Because that exact gameplay later exploded in popularity on Solana, but Friend.Tech itself missed the wave.
Haseeb: I think what Friend.Tech failed to grasp—what Pump.fun figured out—is that you can start with a bonding curve, but you can’t stay on it forever because it eventually collapses. You need to pivot at some inflection point instead of staying stuck on the curve.
Tarun: Part of the frustration might stem from seeing more successful mechanisms now, making early Friend.Tech feel underwhelming. But I think they were on the right track. You could argue Friend.Tech cracked the code before meme coins went mainstream. Still, the social aspect felt fake. I remember returning to the platform and realizing all my key holders were bots—they asked me the same question about 500 times.
Haseeb: Why were they asking those questions?
Tarun: Probably trying to boost their interaction count for bigger airdrop rewards. Everyone was farming airdrops back then, so things got weird. Initially, those rooms were fun and unique. But it degraded. I felt Friend.Tech truly entered the mainstream when OnlyFans creators started joining. That’s when it stopped being a niche crypto experiment and became something broadly appealing.
Tom: Exactly—OnlyFans eventually generated $8 billion in revenue, with 80% going directly to creators, not platform founders.
Jason: There were also local celebrities on Friend.Tech who built large followings. These are positive signs for creator platforms—proof that creators can build independent businesses.
Jason: Friend.Tech showed early promise, but the team didn’t iterate enough on the core product. They saw people enjoying the platform and assumed things would naturally progress. But their infrastructure was extremely weak.
Haseeb: Feature rollout was painfully slow, and the chat experience never improved. It felt like they got trapped in their own product loop—because it gained early traction, they doubled down on the original vision. Friend.Tech never evolved beyond its initial framework: “chat with people who hold your key.” Full stop. They didn’t seem willing to experiment with new mechanics. Maybe they should’ve embraced the spirit of meme coins more.
Tarun: Yeah, after a while, joining someone’s chat just wasn’t that exciting. At first, the questions were interesting. Then it became, “Which token will pump?” or “What project are you bullish on?” Also, Racer’s Twitter presence during that period became kind of grating—that was one reason I stopped using Friend.Tech.
I used to love his research-driven, niche Twitter content—deep, insightful stuff. But after starting Friend.Tech, his content declined. Not only did the product fail to deliver good content, it actually degraded his output as a creator. A lose-lose. Now, to get good content, you have to buy his key and enter Racer’s private room. The public no longer gets quality content.
Project Exits & Ethical Dilemmas
Haseeb: I want to focus on how founders should exit in crypto. In traditional startups, shutting down a company is normal. In crypto, it feels awkward—mainly because there are no standards or established exit protocols. People don’t know how to wrap things up properly. What responsibilities should founders have? Have you seen any notable cases?
Jason: Early-stage projects face extreme outcomes—either huge success or total failure. If advising founders on what to do when a project isn’t working, I’d say shutting down early is relatively straightforward—as long as you haven’t issued a token. Your stakeholders might just be four or five people: angel investors and a lead VC. You communicate with them, work with lawyers to dissolve the company, and return capital proportionally. Simple process. But once you issue a token, you’re no longer dealing with a handful of investors—you might have tens of thousands of token holders.
Haseeb: So do you think the solution is controlling token launch timing? You shouldn’t launch a token until the project is ready—until you’ve found product-market fit and are prepared to accelerate growth with a token. Do you know of any successful token exits? FTT, for example—the project halted, but the token still trades. Or Luna, which has no real development but still exists.
Tom: Yes, there’s Luna Classic. In crypto, we call that the “classic” version. Actually, something similar happened this week: Vega, a decentralized derivatives platform with its own chain, proposed a governance vote to gradually wind down and shut off the chain. It’s simple—even though it’s community-voted, effectively the team decided to exit and step away.
This reminds me of discussions around IoT smart devices. When companies go bankrupt or discontinue service, users complain: “Why did you ruin my $1,000 device?” They want open-sourced software so users can run servers themselves. If companies do that, it’s ideal. But it involves cost and legal hurdles—very few teams actually open-source everything.
Jason: Indeed, if you can do it, that’s the best path. In crypto, if you want the community to take over, open-source the frontend and let users self-host and govern. But if you unilaterally shut it down, it gets messy. That requires full—or near-full—decentralization. Projects like Friend.Tech rely on centralized servers to host chat messages and manage operations. Without that, Friend.Tech is basically nothing.
Tom: Fully decentralized projects that gracefully shut down are nearly nonexistent. The closest example might be Fei and Rari Capital—but that’s extremely rare. Most projects persist as long as someone runs the infrastructure. They can trade forever—like Ethereum Classic (ETC). The definition of whether a token is “dead” is unique in crypto. Even if inactive and barely traded, as long as it exists on-chain and has some exchange liquidity, it technically lives on. But by most measures, it’s dead.
Haseeb: Tangent Fund does both early-stage venture investing and liquidity market investments and token launches, correct?
Jason: Yes, that’s right.
VCs vs. Liquidity Funds
Haseeb: Recently, there’s been a lot of Twitter discussion about the dynamic between VC funds and liquidity funds. Some argue VCs are net extractive in crypto—taking out more money than they put in. VCs invest early at low valuations, then sell their tokens after projects list on major exchanges, effectively draining capital from the ecosystem rather than injecting it. The argument goes: more VCs are bad for the industry. Instead, they should allocate capital to liquid markets—buying already-listed tokens rather than funding new projects.
More people are agreeing that VCs are “extractive” or net-negative. Given your background at Spartan, which did both liquidity and venture investing, what’s your take? And where does Tangent stand?
Jason: Not all VCs are the same. In 2020, compared to Web2, setting up a crypto fund had a lower barrier to entry. Many newcomers entered the space for the first time. As a result, tons of funds emerged, with lower standards for project quality—random projects got funded. After listing, they were hyped up blindly, and most tokens followed a one-way downward path. This created the impression that VCs just buy cheap and dump at inflated valuations during exchange listings.
We’ve definitely seen a lot of that. But I wouldn’t dismiss the entire crypto VC space because of it. At Tangent, we recognized that too much capital was chasing too few quality projects—similar to Web2 VC. Eventually, the VCs best at picking winners will dominate. So when we founded Tangent, we decided not to compete with giant funds—we’d write smaller checks to support startups.
I think current liquid markets lack mature price discovery. Startup valuations are usually determined through competitive bidding among seasoned VCs, arriving at reasonable prices. In public crypto markets, there’s little consensus—few rigorous valuation standards. We need stricter price discovery mechanisms.
Tarun: One fascinating thing about crypto is how it blurs the line between private and public investing. Like you said, everyone seems able to participate. This contrasts sharply with traditional markets—say, private equity—where you typically only get liquidity when a company goes public. I’ve never read about constant buying and selling in private equity documents. In crypto, investors don’t just back projects—they help find liquidity, connect market makers, and do a lot of operational work. This creates different market structures, which explains why price discovery in crypto is relatively poor.
I’d argue private market pricing is even more inefficient than public market pricing. Often, the final deal price isn’t what investors truly believe it’s worth. Due to competitive pressure, they may overpay just to win the deal. This “auction” mechanism frequently leads to inefficient pricing.
Haseeb: Yes, this is the “winner’s curse.” In competitive auctions, the winner often pays more than the asset’s true value. Crypto investors seem especially prone to this. Remember when the U.S. government auctioned oil fields in Alaska? Oil companies could take one soil sample before bidding. Back then, due diligence meant sending someone to dig and measure—no sonar tech. The problem? Bidders often overpaid because limited samples led to overly optimistic estimates.
Tarun: Exactly. Suppose one bidder samples a spot rich in oil—they assume the whole plot is oil-rich. Another samples a dry spot. The actual land value should be the average of all bidders’ information. But since info is private and not shared, the winner is often the one who overestimates. They just got lucky with a sample, misjudging overall value. That’s the “winner’s curse”—you win the auction, but you overpaid for an overvalued asset—something you plan to resell later, only to realize you paid too much.
Haseeb: Do you think this “winner’s curse” only happens in crypto VC, or in all VC?
Tarun: I think it exists in all VC, but it’s more pronounced in crypto. Because in crypto, private investors are also public market participants. They help set up liquidity events—negotiating with market makers, supplying tokens. In traditional markets, banks act as intermediaries: they handle pricing and book-building. But banks aren’t asset owners—they’re third parties.
In crypto, private funds can intervene more directly during liquidity events. In traditional public markets, their influence is minimal. So while crypto appears to suffer from “winner’s curse,” the ability to shape liquidity events changes the dynamics.
Don’t you remember Benchmark partners complaining every other week about banks mispricing IPOs? They’d gripe about incorrect IPO pricing, losing control over valuation—this affected their C-round and even A-round pricing.
Market Strategy Gaps & Arbitrage Behavior
Tom: That might add some side effects, but I don’t think the impact is significant. Like you said, at most, you make an intro to a market maker—but that doesn’t mean direct involvement in pricing or negotiation. Sometimes you lend assets to market makers or do other ops. In traditional markets, third-party intermediaries handle this. In crypto, intermediaries are less prominent.
Crypto investing isn’t a simple commodity auction—highest bid doesn’t always win. Often, teams with lower costs get cheaper capital. That’s why “European family offices investing in Series A” is common—there’s genuinely cheaper capital available. Well-known VC funds aren’t usually the highest bidders, which explains their better returns.
Tarun: A key difference between crypto and tech VCs is brand importance. Tech VCs have longer liquidity cycles, so founders often accept steeper discounts for high-profile brand backing. In crypto, teams are far less tolerant of that—especially post-2019.
Haseeb: Top-tier brand funds often help you land customers, especially early on.
Tarun: I agree brands matter early. But in later stages, markets homogenize, and brand power diminishes. The issue is crypto lacks true late stages—everything’s early until a liquidity event. A Series B is almost “late stage” here. Traditional VCs might have Series D or F rounds, but crypto stage definitions are blurry.
Haseeb: Brand premium in crypto is higher than in traditional VC. At seed or pre-seed, brand is crucial—without a product, signaling matters. If a top fund invests versus an unknown one, the price difference can be huge. So crypto investing isn’t just capital bidding—it’s reputation bidding. The balance between capital and prestige is sharper in crypto than in traditional VC.
Tarun: I agree on later stages, but in early tech investing—especially AI—I think brand influence is leveling out.
Tom: In 2020 and 2021, many believed crossover funds like Tiger Global would dominate and inflate prices. But that didn’t happen—instead, we saw “winner’s curse” play out. But that’s not the norm in VC markets, and it’s not how things are today. So predicting the future based on a few data points from years ago isn’t convincing.
Jason: I think public markets in crypto assign valuations far above intrinsic value, giving VCs massive paper gains. For example, we invested in a new Layer 1 at a $30M FDV. Three months later, when tokens launched, the market valued it at $1B. This almost forces VCs to sell upon unlock—public markets give VCs an exit path.
The root cause? Crypto’s liquidity window differs from traditional markets. Traditional VC exits take 7–11 years. Crypto projects can launch tokens months after founding—liquidity comes much faster. Meme coins go live every 15 minutes.
This liquidity window exacerbates the issue—projects don’t get enough time to execute their vision. It’s not just because VCs push fast launches or tokens come too early. It’s because the market assigns huge speculative premiums to almost any promising crypto project. Such early overvaluation is unsustainable. I believe this will self-correct. Retail investors are learning that buying new project tokens at multi-billion dollar FDVs usually ends in losses. We analyzed token launches over the past six months—except for memes, nearly all are down.
Haseeb: The market has dropped sharply over the past six months—nearly all assets down ~50%. That makes me skeptical of this view. Ironically, we run a liquidity fund ourselves and lean toward holding long-term. I disagree with the idea that liquidity funds are good while VC funds are harmful. That argument assumes building in crypto has no real value—as if we’re just playing shell games.
If you believe nothing of substance is being built, why participate at all? In reality, VC-backed projects—Polymarket, Solana, Avalanche, Circle, Tether, Coinbase—have expanded crypto’s footprint, bringing in more users. Without them, Bitcoin and Ethereum would likely be worth far less.
The notion that there’s nothing left to build, that new projects have no value, is too narrow. Historically, skepticism toward new technologies never holds up. Even if most VC-backed projects go to zero, that’s common across all VC industries. Buying liquid tokens is still necessary.
Tarun: I think VC funds have driven industry progress. We do need more liquidity funds, but dismissing VC contributions is unreasonable. You argue liquidity funds entering the market improve efficiency and benefit crypto. My counter: liquidity funds operate by buying early, selling high, and moving to the next opportunity. Their goal is arbitrage, not long-term capital injection. Done right, they extract more than they contribute.
Tom: I’ve worked in both traditional finance and crypto private markets. This debate exists in traditional finance too. Critics say VCs just inflate paper valuations without creating real value, arguing capital should go to liquid hedge funds instead. It’s capitalism’s classic tension: long-term uncertain returns vs. needing certainty now. This drives trading activity. I think crypto’s public markets are poor at helping project teams raise capital. Unlike stock markets, teams rarely sell tokens directly on public markets—almost always via VC sales.
Haseeb: In stock markets, companies can raise funds via new share or debt issuance, and markets are generally optimistic. In crypto, teams struggle to raise new capital via public markets. Token trading is mostly retail-to-retail, lacking effective fundraising channels. Most of Crypto Twitter supports hedge funds—opposite to traditional market sentiment. Hedge funds usually trade against retail, yet Crypto Twitter cheers them on.
Tarun: Haven’t you followed GameStop? That was the opposite—people hated hedge funds. In crypto, people seem to love them. Haseeb mentioned retail enters via liquid tokens, not private deals—so they identify more with liquidity funds.
Jason: Arthur pointed out most crypto VCs perform poorly because in 2019–2020, low barriers led to many low-quality projects getting funded at inflated valuations. VCs quickly cashed out, creating negative perceptions. But we’re very careful in choosing partners—co-investing with firms like Dragonfly because we share similar standards and focus on truly promising projects.
Also, calling liquidity funds “value extractors” is oversimplified. Liquidity funds employ diverse strategies. Even high-frequency trading funds can add market depth. Many crypto funds resemble VCs—they’re theme-driven, publicly share investment theses, help markets become more efficient by shifting capital from low-quality to high-quality projects.
Haseeb: You said some hedge funds perform poorly, but others—like Berkshire Hathaway—help markets and improve efficiency. So which types harm the industry? Your earlier statement was vague. Are arbitrage funds bad? Long/short funds? Which ones don’t meet your standard?
Jason: It’s hard to name specific “bad” fund types. For VCs, if they constantly back scam projects, that’s clearly bad. But for liquidity funds, it’s an open market—anyone can participate. I don’t think any legitimate fund strategy explicitly supports scams.
I see a clear line between legality and “good vs. bad.” As long as it’s legal, I don’t feel qualified to judge which fund types are “bad” or “good.” But I believe the most valuable funds are theme-driven ones that openly share their investment philosophy. If I had to choose, I’d prefer those over high-frequency trading firms. Theme-driven funds help markets discover prices better, redirecting retail capital from bad to good projects. Of course, both serve different functions—so it’s hard to say any single strategy is net-negative for the industry.
Haseeb: Tarun, what’s your take?
Tarun: The word “illegal” is nuanced. Crypto markets are fuzzy by definition—many things, if scrutinized, might violate rules. For example, widespread wash trading. I think the market should evolve so wash trading becomes too costly to sustain. The goal in crypto should be preventing manipulation—not relying on SEC investigations that come five years late. Crypto hasn’t fully reached that maturity. Many profit this way, contributing nothing to price discovery.
Hedge Fund Strategies & Market Impact
Haseeb: Can you elaborate on other hedge fund strategies?
Tarun: I think the absence of certain strategies is more significant than the existence of bad ones. In traditional markets, you find self-financing portfolios—where expected asset growth covers funding costs, like option premiums. In crypto, 90% of derivative exposure is perpetuals (“perps”), which aren’t self-financing—you keep paying funding rates. Staking exists, but suffers from maturity mismatch.
That’s why there aren’t many traditional hedging funds in crypto—mostly short-term traders or long-term holders. Mid-frequency strategies are missing. Plotting fund trading frequency, traditional markets show a normal distribution; crypto shows a bimodal one. New DeFi or staking mechanisms might shift this, but integration isn’t complete. The lack of mid-frequency operators is a clear gap.
Jason: If I had to point to a harmful hedge fund strategy, it’d be systematic airdrop “farming.” These operations pollute founders’ metrics, making it hard to assess product-market fit. Airdrop farmers extract value but don’t stick around to use the product. Studies show 80% churn after airdrops—bad for founders and projects alike.
The scale is limited—usually small teams of two or three. Though larger-scale farming existed—Pendle’s TVL looked strong at peak—it’s declined recently.
Tarun: I hope to see a more efficient, transparent, and mature market. Progress may seem slow, but compared to ten years ago, the space is undeniably maturing.
Haseeb: Yes, after this discussion, I largely agree with Jason. Short-term hedge funds can improve liquidity; long-term funds can make markets more efficient and help redistribute capital. While Tom noted capital redistribution in crypto may seem meaningless—since teams can’t easily raise via public markets—they still access capital through DWS or VCs, whose pricing reflects in public markets. Price signals flow back. So overall, these strategies make sense.
Tarun: Another issue: risk-free operations that profit without benefiting long-term liquidity or pricing. Wash trading for farming incentives—traders face no risk, so no positive impact on projects. Markets should require risk-taking, incentivizing contributors to support long-term growth. Airdrop farmers now take some risk, but it remains unproductive.
Haseeb: Right. But requiring risk prevents such behaviors from distorting project metrics. If I believe in a project’s positive outcome, risk motivates me to contribute constructively. Risk-free profit schemes merely inflate metrics without real contribution.
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