Is Web3 innovation at a ceiling? From tokenization to the financing market, where is the future value of crypto assets?

Market observer @MiyaHedge published a long article today titled “the vision,” emphasizing that alts have fallen into a structural deadlock, DeFi innovations have reached a bottleneck, and VCs are also withdrawing from this gradually depleted land. He believes that the future of crypto assets no longer belongs to on-chain products, but rather that we need to think about how to apply its financing and tokenization technologies to the Web2 domain.

Miya points out three fundamental flaws: the altcoin season will not come again.

Miya believes that the market has already reached a consensus on whether altcoin season comes and goes:

Alts are structurally flawed, and their value proposition is not attractive to most investors.

Web3 lacks genuine innovation, and venture capital firms are turning to invest in AI or defense technology startups, rather than the next L1.

The value disconnect between equity and tokens can only choose one between maximizing team value and maximizing token holder value.

He pointed out that these three main reasons also constitute the “innovation ceiling” of the crypto market:

This is why there is no altcoin season; the market weakness is not due to a lack of funds, but because the value narrative has completely collapsed.

The main reason for the innovation bottleneck in Decentralized Finance is that VC is gradually distancing itself.

Miya also admitted that when the encryption field stagnates, VC funding has flocked to areas that can generate real value, such as AI, defense technology, autonomous robotics, and regenerative agriculture.

In recent years, only technologies such as zero-knowledge proofs and on-chain abstraction are worth praising; most other new inventions are incremental improvements, and VC firms will not invest in such products as their valuations have an upper limit.

He also criticized: “We waste capital on unproductive casino tokens instead of helping entrepreneurs who can truly change the world, and then reap excessive rewards from early participation.”

For him, the problem with DeFi today is not speculation, but rather the inability to create any sustainable value and economic growth.

Retail investors are getting smarter: repetitive narratives and harvesting have numbed the market.

Miya also sharply criticized the current project culture: “If a founder has to desperately seek practicality to support a billion-dollar valuation for their project, then you are done.”

He bluntly stated that giving utility to tokens is merely a speculative excuse, harvesting retail investors through almost non-existent governance and hollow, repetitive narratives, which has gradually turned the market to favor shorting high FDV new coins, as even retail investors know that these tokens do not create any value.

New Vision: Reshaping Web2 Financing with Web3 Technology

In this regard, Miya proposed a more promising entry point, which is “to use encryption technology for the tokenization of Web2 companies.”

OpenAI, SpaceX, and Anthropic have long maintained a privatized or even non-profit model. When a privately held company urgently needs funds, it can leverage the transparency of Crypto Assets to raise capital, attract users, and create liquidity.

He referred to it as the “Digital Innovation Winner Revolution (Digital Shark Tank Revolution),” a new model that allows unlisted companies to obtain valuation and investment through the token market.

( Citigroup teams up with Swiss SDX to target the $75 billion Pre-IPO market, promoting the tokenization of “unlisted equities” )

Starting from ERC-S: Rebinding tokens to equity

Miya pointed out that this core breakthrough lies in the new token standard ERC-S. This is an open-source protocol that binds tokens to company equity, allowing tokens to have intrinsic value, no longer just being emotion-driven speculative chips:

I believe that cryptocurrencies will undergo fundamental changes due to this invention, and future tokens will be less related to blockchain applications, but will serve as tools for the circulation of global equity.

He emphasized that as this model matures, it will simultaneously disrupt the roles of IPOs and traditional accelerators like YC(, and unleash the true value of Crypto Assets: “fundraising capability, attention capture, and global liquidity.”

Is this article suggesting that Web3 innovation has reached a ceiling? From tokenization to the financing market, where is the future value of Crypto Assets? First appeared in Chain News ABMedia.