alt Hacker News Good products come from tight cycles: ship something, listen to users, iterate. Token economics break that cycle by introducing a competing optimization target. The team stops asking "what do our developers need?" and starts asking "what supports the token narrative?"
This is why 99.99% of crypto projects are a scam.
No, your token investors don't give a damn what you deliver. They only care about the price of the token. Lie if you have to. Hype up your project like it's the greatest thing in the world. Do whatever to enable security fraud.
When teams discover that lying does more for the token price than actually building, they quickly switch incentives. Now they'll just lie, sell tokens, repeat, until a final rug pull to scam the remaining bag holders.
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Yes - but the sad thing is how badly this has bled back to the real markets. That's how you get things like https://en.wikipedia.org/wiki/Nikola_Corporation
I'm concerned we may not be able to pull back from low-trust society in which most investments are fradulent; eventually it will become impossible to raise money for real ventures!
Yep!
People in the Bitcoin space have been screaming at the top of their lungs about this for decades at this point, but it's hard to work against the marketing machine that comes from these ICOs.
The weird thing is that this outcome was always obvious.
Token-driven projects were clearly just penny stock boiler room scams dressed up in a trenchcoat made of jargon whitepapers.
If you'll humor a cheeky substitution:
> No, your VC investors don't give a damn what you deliver. They only care about the valuation. Lie if you have to. Hype up your project like it's the greatest thing in the world. Do whatever to enable security fraud.
People are quite good at recognizing this dynamic amongst crypto startups.
Yet they pretend it's not the driving force in both the VC world and Big Tech.