Projects and investors in the current bear market are facing a gradual depletion of cash and ongoing operational capacity, resulting in an increasing number of projects cutting staff or shutting down, and investors cutting their losses. nevertheless, this presents an opportunity for those projects that are successful in raising capital to demonstrate a real value proposition in order to attract new investors, which makes it even more difficult to raise capital. the market is currently in a downturn, and the liquidity and inflows of capital are being affected, posing a challenge for projects to raise capital and grow. as a result, projects looking for the next round of funding have to demonstrate a competitive advantage in order to successfully raise funds without revenues. however, many projects may not be able to raise additional funds, increasing the risk of closure. a number of projects have recently shut down or cut back on their workforce to try to gain attention away from the market.
——Generated by ChatGPT
A key indicator that we are currently in a bear market is that projects and investors are running out of cash and the ability to continue operations. more and more projects are cutting staff or shutting down, and investors are starting to cut the cord.
While this may sound rather pessimistic, it actually carries some positives; in the past bull market, many teams raised funds and planned to use them to sustain operations for 2 years, which is considered a long time in the industry, and now they need to launch tokens or conduct a public sale.
However, the market is extremely depressed at the moment, which forces them to demonstrate a true value proposition to attract new investors, a value that is likely to be much higher than they initially demonstrated in a bull market environment.This makes raising capital much more difficult compared to bull market times.
As a result, they are faced with two choices, either reduce their valuation and raise the next round of funding, but this can get quite complicated if backed by venture capitalists, or wait for market sentiment to improve and for liquidity or capital to flow in, provided their ability to continue operations allows it.
Unfortunately, the market is still in PvP mode and we are hardly seeing any new stablecoin inflows or user activity. in addition, the fragmentation of liquidity due to new chains and rollups is having a big impact on the overall flow of funds, which is increasing the downside for the market.
So, as always, if the number of projects seeking financing continues to grow but global liquidity remains constant, it becomes increasingly challenging to attract capital, stand out and successfully raise funds.
What does that mean?
Those programs that were successful in raising capital in the last bull market or in the past year must demonstrate a real competitive advantage in order to succeed in the next round of funding without generating revenue.
Obviously, many projects will not be able to raise additional funds or sell, thereby curtailing the funds needed to fund operations and extend the useful life of the project, increasing development pressures, and potentially leading to project closure.We will likely see projects develop entirely new features or services in an attempt to gain attention from the marketplace.
Some recent examples
Fuji Finance was closed due to financial and fundraising problems;
Yuga Labs laid off 120 employees;
Ledger lays off 12 percent of its workforce;
Polkadot lays off 300 employees, or ‘making room for new ecosystem leaders beyond Parity’;
Utopia closes the current product and moves to a new program;
Yield Protocol cuts operations due to market maladjustment.
As a result, the market is reorganizing itself, weeding out projects that are not very profitable or innovative and have not adapted to the market’s needs, and allowing only truly innovative and quality projects to stand out, paving the way for the next bull market. while this is not good for investors, cleaning up the market is a necessity. it will help weed out projects that offer little value to the market.
Do we really need 5 to 10 decentralized exchanges (DEXs), lending or perpetual contract DEXs on each chain?
I don’t think it’s needed, nor will the market in the long run. innovation, marketing and hype will always be the main factors for success in this sector, and if projects are not attractive in these areas then they will probably fail. the slow time-based collapse is also affecting investor confidence in the market as opportunities in the market diminish and the narrative becomes shorter.
This makes it more difficult to make money in the market and thus maintain the market.
In fact, we have seen projects’ typically six-figure fundraising valuations and offering market capitalizations drop dramatically at launch as projects need to offer attractive opportunities to remaining investors.We only see this when the bear market is having a serious impact on investors and builders.
In my opinion, once the ETFs, halving, or money printing presses get going, money will flow, and in the meantime, the market crash will continue and reach the point of maximum pain.These periods are full of opportunity for those who have bucked the market and built a long term position, while continuing to expand their network and improve their skills/knowledge.
Congratulations to those who are still active in this market and don’t forget that it is vital to stay capitalized in these market conditions. stay vigilant and look forward to being known as the lucky ones in the next bull market.
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Good reasoning
Nice article fam.
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Great topic bro 
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Good read but why use ChatGPT to compile your thoughts man. I would love your own words much more.
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It will soon be over
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Thanks man
Thanks zikky
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I stared where i used gpt brr
Yes man it will
Quite a good read from me
You’re welcome.
Thanks sola