Web3’s current cycle bears many hallmarks of the late-1990s dot-com bust, defined by a flood of supply-driven narratives and a dearth of practical demand-side applications. Advocates point to infrastructure growth and token ecosystems, yet user adoption remains sparse beyond a handful of DeFi leaders and meme platforms. Examples in the sector include ZKsyn, Optimism, and Sei, where daily revenues are modest relative to market capitalizations, yielding eye-popping price-to-earnings ratios such as 1,052, 285, and 327 respectively, and if we followed traditional stock-market logic, the first three projects would require centuries to break even. There’s also Blast, which reports a daily income of -$6.
Although these ecosystems don’t rely on on-chain revenue to recoup costs and generate profits, for token holders it’s a nightmare. What are some Web3 applications? Metaverse, blockchain games, inscriptions, social networking, and perhaps other applications we can’t yet recall are now almost never mentioned. Besides DeFi and real-world assets (RWA), the only platforms with users are memes, prediction markets, and Perp DEX, and those activities are often driven by airdrop expectations.
Therefore, what is truly indulging in wishful thinking on the supply side while lacking any real progress on the demand side is not AI, but Web3. The stock market players in the US mirror those from 26 years ago, and investors and Wall Street are deliberately avoiding a repeat of history. There is a bubble in AI, but it differs from the dot-com bubble of 2000. In contrast, in the younger Web3 field, capital is speculating on technology on the supply side while there are not many truly practical products on the demand side, repeating the dot-com bubble of 2000.
Just as in the dot-com era, altcoins may undergo a prolonged shakeout, with a harsh process of eliminating fakes and retaining genuine projects. This process may take longer than I imagined. The overall decline in counterfeit goods has lasted for about 15 months since the end of 2024, but this is not the end. Don’t believe the claim that counterfeiting has reached its limit; some counterfeiting has reached its limit, but others have no limit.
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