Sustainable Cryptocurrency Growth: The Need to Deliver Real Value

According to Binance Research, the longevity and resilience of a cryptocurrency project largely depends on its ability to provide real value to users. Short-term interest driven by narrative, emotion, and hype can drive initial engagement, but these factors alone are not enough for long-term growth, especially in bear markets.

Current situation

Many projects have successfully gained traction by leveraging popular trends such as AI and re-staking. However, some projects have struggled to maintain momentum as user interest wanes over time. Projects that rely heavily on external rewards, such as point systems or airdrop promises, often fail to foster long-term commitment. Once these incentives end, users typically migrate and have no intrinsic reason to stay.

This trend highlights the importance of providing real, tangible value to keep users engaged beyond the initial hype. Projects that focus on real value tend to perform better because they can maintain a baseline level of activity regardless of market conditions.

Focus on delivering real value

To achieve sustainable growth, projects must deliver real value through tangible benefits such as compelling use cases and sustainable revenue. This approach goes beyond initial hype to engage users and foster loyalty. According to the report, real value can be delivered in three main ways: real demand, real revenue, and real profits.

1. Actual demand

Real demand is evidenced by the willingness of users to use and pay for a product or service without relying on external rewards. Achieving strong product-market fit creates intrinsic demand, allowing the project to generate consistent revenue. Examples of sectors with real demand include decentralized exchanges (DEXs), liquid staking, money markets, and stablecoins.

2. Actual Revenue and Profit

Real revenue refers to the tangible income that a project generates, often from protocol fees. Combined with healthy token economics and low operating costs, a project can achieve operational profitability. Profitability is calculated by subtracting operating costs and token emissions from total revenue. Leading protocols in terms of profitability include Tron, Maker, and Uniswap.

3. Actual yield

Real yields are generated from tangible sources of income and do not rely solely on the emission of inflationary tokens. They function similarly to dividends in traditional finance, providing returns to token holders. Examples include DEXs that provide returns to liquidity providers derived from trading fees, and liquid staking protocols that distribute returns from staking rewards.

Projects that provide real value by demonstrating strong product-market fit, consistent revenue growth, and real profits are more likely to survive market cycles. On the other hand, projects driven by fleeting trends or speculative interest may experience rapid initial growth but often lack the fundamentals necessary for sustainability.

For more details, see the original report from Binance Research here.

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