GuShiio.com There is no magic. The only factor that distinguishes quality and ultimately determines success is demand.
Written by Andrey Didovskiy
Compilation: Vernacular blockchain
There is one universally applicable economic law that governs all markets: supply and demand. The same applies in the field of cryptocurrencies, and the supply of cryptocurrencies is extremely sufficient. A large number of new Tokens emerge every day with a wide variety of replaceable Tokens, non-replaceable Tokens, stablecoins, governance Tokens, memes, proofs of workload, and proofs of equity.
To better understand, there were approximately 10,000 crypto assets in 2017. By February 2025, there have been more than 11.5 million, and this growth seems to be accelerating. When supply exceeds demand, the market’s attention is distracted and liquidity is uneven, resulting in thin orders becoming weak and prices are extremely sensitive to selling pressure, triggering violent downward fluctuations (usually irreversible).
When demand exceeds supply and continues to hold on, we will see the emergence of Bitcoin. Through well-designed economic models, reasonable consideration of supply dynamics, and powerful and concise technology, these are highly consistent with social philosophy, can cultivate loyal communities, and promote the liquidity flywheel effect, allowing liquidity to continuously create real needs, and ultimately converge on real assets.
There is no magic. The only factor that distinguishes quality and ultimately determines success is demand, no doubt. What seems to be simple on the surface is actually a multi-dimensional principle that contains layers of interdependence and subtle differences. In other words, there are layers.
1. Demand domino effect
Demand usually flows evenly among various assets based on the fundamentals of the project, product or economy.
There are two basic types of needs: direct needs and indirect needs.
Direct demand refers to demand originating from a niche area. For example, if you want to use an application, you will generate a demand for the application Token, which will further translate into a demand for the network on which it relies, and ultimately lead to a demand for the network Token.
Indirect demand is demand driven by macro factors, such as currency printing, interest rates, government policies and political systems.
These two types of needs are interdependent. For example, monetary policy affects the amount of capital that flows freely in society, thereby determining the public’s risk appetite, which in turn affects which assets will attract capital inflows. Conversely, if high-risk assets start to rise without changes in basic capital, it means that mature investors in the market expect capital to flow into the hands of ordinary retail investors, and they are laying out ahead.
For cryptocurrencies, the fundamental driving force of demand comes from two basic human motivations: the pursuit of happiness and the avoidance of pain, both of which are driven by story and narrative.
The mainstream narrative behind these two motivations is “sovereignty”, which is to protect oneself from government interference or resistance to government control.
Narratives about pursuing happiness include things like Lamborghini, Rolex, luxury travel, attracting the attention of others, and gaining recognition from family and friends. This is people’s desire to pursue correctness and profit from it. We call this behavior “gambling.”
The narrative of avoiding pain means avoiding missed opportunities (FOMO). Seeing others make life-changing money through investment stimulates the emotion of not wanting to be considered a fool or being left behind. We call this behavior “surrender”(i.e. losing ourselves and rushing to empty your portfolio).
To understand how to drive demand, we first need to understand the source of the demand. Because demand is often measured through buying and selling pressure and liquidity, the key question in identifying the source of demand is: Who is driving it?
For simplicity’s sake, we can divide “who” into three categories:
1) Builders
This category includes individual developers who develop tools independently, companies that build products that generate real revenue, hackers who find system vulnerabilities, creators who create content and disseminate information, small teams that build decentralized trading platforms (DEX) and bridge protocols in garages, and of course developers of various smart contracts.
2) Retail investors
This category is the vast majority of the market, including respondents and KOL on crypto Twitter, memin investors, NFT enthusiasts, speculative apes and “100 times investors” who double their bets. These people are also often referred to as “backpackers” or “exiting mobility.” They are people who want to get higher returns through speculation, escape the usual framework, and integrate into the community.
3) Institutions
This category includes companies that incorporate cryptocurrencies into asset allocations, companies that deploy token-based debt instruments, and governments that turn volcanoes into bitcoin mines.
Here, we omit a large number of intermediate roles such as market makers, trading platforms, node infrastructure, and service providers such as Cloud Virtual Machine.
3. Demand driving factors
So, how is demand in cryptocurrencies driven? Obviously, by using internal liquidity to prop up a memecoin, getting endorsements from some influential figures, coupled with using “community” robots to swipe comments.……
Just kidding, in fact, the demand-driven approach in cryptocurrency is not much different from other fields, and the core is marketing.
We don’t intend to delve into the ethics of marketing, but we need to point out that marketing is essentially about achieving goals by influencing emotions.
In order to cater to human nature, marketing methods can be boiled down to two types: attraction and coercion.
Attraction is to gradually build trust by organically creating excellent products and communities. This takes a long time, but can have a lasting impact and ultimately form a self-driven, sustainable super system.
Coercion is to create the illusion that something is more valuable than it is through improper means. Although these methods are low-cost and short-lasting, they are extremely disruptive. The most typical examples can be found in Argentina’s memin and the numerous stories at Pump.fun
No matter which marketing method is used to drive demand, the key lies in the characteristics of the demand itself; here we discuss various factors that measure demand adoption.
1) Demand measurement
The most common and common mistake in measuring demand is through price. A slightly better way to measure it is through liquidity. Liquidity is the cornerstone of financial markets and the most important indicator when assessing the economic health of an asset or asset class. That is, liquidity represents buying pressure (the desire to have it) and selling pressure (the desire to not let go).
When the price of cryptocurrency rises, it will form a strong cycle in people’s psychology, making everyone feel that this cryptocurrency must be very valuable, and then become a self-fulfilling price growth prediction. Conversely, when prices fall, people often assume that there is no demand for the project.
Although this phenomenon has its rationality, it does not fully reflect the actual situation.
As a technology-first, pseudo-economic innovation, the demand for cryptocurrency is far more complex than we imagine, involving multiple dimensions of finance and technology. The following is an incomplete list:
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MAU (monthly active users)
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DAU (number of daily active users)
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Total number of addresses on the chain
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Total number of smart contracts
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total number of transactions
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Total number of developers
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hash rate
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Number of miners
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Total amount of tokens pledged
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number of nodes
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On-chain transaction volume
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TVL (Total Lock Value)
This list is very large, and there are many ways to interpret this data. The challenge remains: how to identify how much of these requirements are truly organic and combine them with other drivers to truly understand the current state of a project.
2) Behind the demand
No matter what ultimately drives demand, the most important question is always “why”. Although it is sometimes difficult to ignore the noise from the outside world, give yourself the opportunity to explore from the bottom of your heart and think deeply about the logical reasons behind it.
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Why would I want to buy this?
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Why do others find it valuable?
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Why would anyone want to sell it?
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Why would anyone want to have it?
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Why would anyone think that others would want it?
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Why would a project choose to build on this network?
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Why not choose another network?
Understandably, this path is not easy, especially when it is sometimes difficult to get rid of your own prejudices and avoid falling into the “analytical paralysis” of repeated reasoning, a cycle of constant self-questioning questions, which ultimately leaves you in decision-making difficulties.
But understand that when you are able to control your impulses and delve deeper into the question of “why” without emotion, you will eventually make informed decisions.
Getting up early is not always the best thing, nor is it about right or wrong. Ultimately, it is success that matters; and the key to success is a willingness to accept possible mistakes for profit.
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