In yesterday's article, I expressed the following viewpoint:

In cryptocurrency ecosystem investments, to achieve long-term, continuous, and stable returns, one ultimately needs to find projects that can consistently generate long-term, continuous, and stable cash flow.

Of course, if some investors believe that in the cryptocurrency ecosystem, there is no need to invest in other projects and that investing in Bitcoin alone is sufficient, then such investors naturally do not need to pay attention to this type of investment approach. This is similar to real life, where some investors think that investing in gold is enough and that other investments like stocks or equity are unnecessary; the reasoning is the same.

However, I do not think this way, so whether now or in the future, the vast majority of my energy and focus will definitely be on projects that can provide continuous returns; whereas investing in Bitcoin requires no thought or time, and one could even hold it for a lifetime without managing it.

In the views of Munger and Duan Yongping, they often say that when looking at a situation, it is often difficult for us to judge what is good or what is right, but conversely, it is relatively easy for us to judge what is bad or what is wrong.

This method can also be used to evaluate cryptocurrency projects.

In the cryptocurrency ecosystem, we may find it difficult to determine what a project with long-term, continuous, and stable cash flow looks like, but we can examine what a project without long-term, continuous, and stable cash flow would look like.

Take Ethereum as an example. In this market cycle, without a strong new ecosystem emerging, and the existing ecosystem failing to generate sufficiently strong and sustainable returns, Ethereum's price has continued to languish. Even if there is occasionally a surge, it is purely driven by emotions, lasting only a short time and lacking strength.

Looking at Solana, recently, as the enthusiasm for meme coins gradually wanes and no other ecosystems can take over to generate sufficiently strong returns and appeal, its price has also begun to decline.

The main chain is like this, and layer two expansions also struggle to stand out: Ethereum's once-popular layer two expansion, Scroll, received a total of $1.8 billion in venture capital during its funding phase, but now its token's fully diluted valuation is less than $400 million.

There are many reasons for their price decline, but in my view, they can ultimately be attributed to one point: the lack of long-term, continuous, and stable ecological returns, leading to either a persistent decline in the project token's price or a brief period of glory.

I remember in a previous article, I analyzed some well-known DeFi projects using traditional public company analysis methods, such as AAVE, and found that their token prices were significantly overvalued.

At that time, some believed that cryptocurrency projects should have such high valuations and that traditional analysis methods were not applicable to cryptocurrency projects.

In fact, I think this is self-deception; analysis methods do not differentiate between traditional and non-traditional. They should be the same across all fields and should return to simple common sense: Can it generate value? Can it produce continuous cash flow?

If investors continue to deceive themselves, believing that emotional value can replace the continuous cash flow value brought by real services and products when evaluating a project token, such "investments" will eventually fall into a pit. Once the tide recedes, they will inevitably be revealed for what they are.

Let’s look at these well-known DeFi projects; which of their token prices has reached the historical peak that was already achieved several years ago? This is the most genuine response from the market.

Now, looking back at these projects, from their inception to now, investing in these tokens has generally resulted in losses unless one can accurately judge the fluctuations in emotional value and precisely execute high selling and low buying.

Of course, if these projects find strong profit growth points in the future and can generate real cash flow like Nvidia or Apple, then not only can their token prices reach new highs, but creating miracles is also entirely possible.

However, some projects have already begun to recognize this common-sense issue and are trying various methods to address it.

The earlier movers were MakerDAO, and recently, AAVE has been quite active.

They are doing the same thing: trying to expand their business into the RWA (Real World Assets) sector, aiming to substantially increase revenue and generate more value.

Whether their expansion into the RWA sector is appropriate and whether their various practices during this process are reasonable is another matter.

But their direction of effort is definitely correct.

In Duan Yongping's words, they are "doing the right thing." As for whether they are "doing things right," that remains to be seen.

But I believe that as long as they persist in "doing the right thing," this exploration is valuable.

The project parties are returning to common sense, and as investors, we should also return to common sense, returning to the fundamentals of project value assessment.

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