Why Most Crypto Projects Fail: Insights from Founders and Analysts

Key industry figures suggest that many crypto projects fail due to early founder wealth and centralized token control, with experts advocating for using established assets over new tokens controlled by insiders.

In a recent commentary that has sparked interest across the investment community, AngelList founder, a seasoned crypto investor, shared insights into why numerous crypto projects ultimately fail. The discussion points to one prominent issue: founders of these projects often achieve substantial financial gains too quickly, which can undermine long-term commitment and development.

Aaron Jacobson, marketing lead at Platform X, expanded on this by suggesting that many crypto projects struggle because they issue their own tokens with limited decentralization. According to Jacobson, projects relying on their own tokens rather than established decentralized assets like Bitcoin lack sustainability.

Supporting this view, trader Mike van Rossum noted that the tokenomics of many new projects are designed primarily to benefit early investors and venture capitalists, particularly during token generation events. These token distributions often leave minimal value or incentive for retail investors and other participants, which can stymie project growth and lead to eventual failure.

Industry leaders advise crypto founders to adopt a more decentralized approach, encouraging the use of established cryptocurrencies and greater community governance to ensure that project goals remain aligned with those of their user base.

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