Web3 Investment Path Analysis: From Primary Market to Structured Products

Recently, in addition to the overall volatility in the crypto market, a significant piece of news has attracted widespread attention: a well-known institution announced the cessation of new project investments and the suspension of its second-phase fund raising plan, shifting its focus to strategic incubation and secondary market allocation. This trend reflects the challenges faced by current crypto venture capital and has sparked thoughts on new paths for Web3 investment.

In fact, as early as the end of last year, many analyses pointed out that the Primary Market has become difficult to profit from, with most venture capital facing losses. Against this backdrop, how new investors choose the appropriate participation path has become a noteworthy issue. This article will systematically sort out the main investment methods and participation mechanisms in the Web3 industry to provide references for investors.

Primary Market Path

Primary Market investment refers to participating in early financing rounds of Web3 projects through crypto funds, focusing primarily on token assets investment.

Funding Demand

The usual minimum investment threshold is above $100,000, while top-tier funds may require a million-dollar level. The fund lock-up period is generally 3-5 years.

Exit Cycle

Medium to long-term, averaging 1-3 years, relying on the project token to exit through the Secondary Market after launch. A bear market may lead to an extended exit period.

Strategic Proactivity

Very low for LP, completely reliant on the fund management team.

Revenue Model

High risk, high return, capturing Alpha by entering at an early low valuation. However, there may be significant drawdowns during a bear market.

Compliance Notice

More offshore structures are used, and attention should be paid to fundraising compliance and custody arrangements to avoid legal risks.

Typical Case

Notable institutions such as Paradigm and Multicoin Capital.

Suitable Audience

High net worth investors who pursue early projects Alpha and can accept liquidity lock-up.

Secondary Market Path

The secondary market path refers to the buying and selling of listed tokens through public trading markets, as well as market making and other operations.

funding needs

Extremely flexible, ranging from tens of thousands to millions of dollars. However, mature strategies and risk control systems are required.

Exit Cycle

Assets can be traded at any time, with complete liquidity. However, the volatility is high, and risks should be closely monitored.

Strategic Proactivity

Extremely high, requiring proactive construction and adjustment of strategy combinations.

Revenue Model

Mainly derived from volatility arbitrage, trend capture, and event-driven strategies. High volatility, considerable returns but also high risks.

Compliance Reminder

It is necessary to use compliant trading platforms, paying attention to tax compliance and cross-border trading risks.

Typical Case

Leading institutions such as Amber Group and Wintermute.

Suitable Audience

Investors with strategy design and market monitoring capabilities, or high-net-worth individuals who participate indirectly through quantitative products.

Incubation Path

Incubation-type investment focuses on the combination of strategic collaboration and capital injection, deeply participating in project development.

funding demand

Relatively flexible, ranging from tens of thousands to millions of dollars. In addition to funds, non-financial resources are also required.

Exit Cycle

Medium, generally 6 months to 2 years, depending on the project's development progress.

Strategic Proactivity

Extremely high, requiring deep involvement in project operation and ecosystem construction.

Revenue Model

Achieve high returns through early large amounts of Tokens or equity, but the execution risk is relatively high.

Compliance Notice

Pay attention to compliance issues such as the place of Token issuance and the design of the equity structure.

Typical Case

A well-known exchange's laboratory, Alliance DAO, etc.

Suitable Audience

High-net-worth investors or industrial capital with industry resources, willing to deeply participate in projects.

Structured Investment Path

Achieve one-stop investment management through professional platforms for asset portfolio allocation and strategy execution.

Funding Demand

The minimum investment threshold is usually between $50,000 and $500,000, depending on the complexity of the product.

Exit Cycle

In the short to medium term, most have flexible adjustment windows.

Strategic Proactivity

Medium to low, relying on a professional team to execute, investors can adjust direction based on risk preference.

Revenue Model

Achieve relatively stable returns through diversified allocation and risk management.

Compliance Reminder

Ensure platform compliance and pay attention to cross-border tax issues.

Typical Case

Institutions such as Matrixport and HashKey Capital.

Suitable Audience

High net worth investors who wish to entrust a professional team to manage and focus on long-term stable returns.

With the changes in the market, the Web3 investment ecosystem is developing in a more flexible and diverse direction. Investors should choose the appropriate path based on their own resources, risk preferences, and goals, while closely monitoring industry trends and cyclical logic.