In a surprising turn, it seems the crypto VC world is undergoing a significant shift. Forget high-risk bets; the new mantra is stability and, believe it or not, meme coins. Yes, you heard that right! Even the big players are changing their tune.

VCs aren’t exactly known for their adventurous spirit these days. In the Web2 world, they’re playing it safe, often just following government-backed funds. And in Web3, those seed rounds everyone talks about? They’re more hype than actual funding. VCs and financial advisors are practically merging, all aiming to get in good graces with Binance’s ecosystem. Insights and memos are just currency to get noticed.

Looking at the bigger picture, major VCs are increasingly jumping in after projects launch their tokens on exchanges – a sort of second-hand approach to primary investment. This is different from the old days of equity investments, initial coin offerings (ICOs), or even hybrid models. The market’s maturing fast, and it looks like smaller VCs might be the ones to get squeezed out.

CZ, the Binance boss, is back in the game with a focus on investments, education (or so he says), and constant Twitter updates. And his main play? Going all-in on BNB Chain meme coins. Binance Labs rebranded to YZi Labs on January 23rd, giving off a strong “family office” vibe – think ultra-conservative, focused on preserving wealth.

This aversion to risk and preference for stable investments isn’t just about investing in late-stage, established projects. It’s also about a noticeable lack of interest in truly innovative, experimental ideas. Take YZi Labs as an example. By looking at their recent investment moves, we can get a sneak peek into how the crypto-rich are shifting their strategies – a valuable lesson for anyone dreaming of crypto wealth.

Data Source: Decentralised Co., Chart by @zuoyeweb3

Normally, you’d expect tons of seed rounds and fewer, but larger, later-stage rounds. But recent data shows seed rounds aren’t dominating in number, and the funding amounts are surprisingly close to A, B, and C rounds. The crypto funding ladder is disappearing. Those who can get a little funding will keep getting it, and those who can’t? Well, they’ll likely stay in the cold.

From Cooling AI to Hot Meme Coins

Remember all the AI hype? In both Web2 and Web3, it’s cooled off a bit. But CZ seems to think it needs to cool off even more before the real builders emerge – only the most dedicated believers, please!

Image description: YZi Investment Targets

YZi is still investing in AI-related projects. Honestly, most projects can somehow connect themselves to AI these days. You can roughly categorize them as “using crypto for AI,” like Vana and Tensorplex Labs, or “using AI for crypto,” such as Plume Network, Blum, and Opinion Labs.

But let’s be real, these are just broad categories. In the age of “AI-powered everything,” maybe we shouldn’t overthink the actual necessity of AI in every single project.

Let’s break down some of YZi’s recent investments chronologically and see what makes them tick:

1. Opinion Labs: Kaito + Polymarket?

Opinion Labs is all about “human opinion-driven prediction markets.” Think prediction markets, but fueled by social media buzz, especially from crypto Twitter influencers. It could tap into the “InfoFi” trend (information finance) while also having that classic trading appeal. Versatile, right?

2. Plume Network: RWA All the Things!

Real World Assets (RWA) aren’t new, but Plume Network’s journey is quite something. They snagged a cool $30 million from big names like Galaxy Digital, then launched an initial exchange offering (IEO) on Gate.io before getting investment from YZi. And guess what? The token price jumped after the YZi news.

That’s crypto for you – stay flexible, get your token out there first, and then worry about traditional fundraising. It’s a unique opportunity this space offers.

3. Tensorplex Labs: LSD + AI?

Decentralized AI? Skeptics say it’s an oxymoron. Tensorplex Labs aims to use LSDfi (Liquid Staking Derivatives in DeFi) to decentralize the training and datasets for Large Language Models (LLMs). Whether this actually boosts productivity is debatable. But hey, with investors like OKX and YZi, even giants like Tether (ADA? typo, likely USDT) or Ripple (XRP) might feel a twinge of envy.

4. Vana: The Cross-Cycle AI Play

Vana is positioned as an “AI concept coin” for all market cycles. Bold prediction time: could the next bull run be… this year?

5. Blum: The Seed Round Gem (and Trading Focused)

Blum screams “classic Binance Labs investment.” It’s all about trading, pure and simple. Interestingly, it’s a rare seed-round pick for YZi. Even more surprising? OKX and YZi co-invested. Talk about “brothers in arms,” navigating the crypto world together!

Let’s be honest, deep dives into tokenomics and project mechanisms? Probably not crucial here. What is the fundamental value of a meme coin anyway? What’s the real difference between a “community” and just a bunch of crypto traders in a group? And how much does tokenomics actually matter in the meme coin world? These are some of crypto’s great unsolved mysteries.

The “Family Office” Aesthetic: Stability Above All

YZi Labs is a prime example, especially since many in the crypto space are familiar with CZ’s family office, Maelstrom. Maelstrom’s funds come directly from CZ, and it even partnered with OKX for IEO promotions, generating significant revenue.

CZ clearly prioritizes stability. Think about Binance restricting withdrawals or strategically capturing OKX’s DEX market share.

While CZ has had some impressive wins – early investments in projects like BTC (Bitcoin?), $TRUMP (a meme coin?), and $TRON (TRX) – his overall investment strategy is still evolving.

Currently, YZi’s moves, like cooling down on AI and embracing BNB Chain meme coins like $Trump, suggest they aren’t entirely abandoning traditional sectors. Binance’s main exchange remains a key advantage for Binance Labs’ portfolio projects.

While YZi has made some recent moves, and Maelstrom focuses on infrastructure and community support, challenges remain:

• Funding Pressure: YZi faces funding pressures, naturally.
• Increased Competition: The market is dynamic and competitive.
• Reputation Risks: Past events create ongoing reputational challenges.

In short, YZi needs to keep sharpening its skills and refining its strategy to navigate these challenges successfully.

Conclusion

The crypto world of yesterday is gone.

Crypto VC truly took off in the ICO era, peaking before the FTX collapse (yes, SBF always gets a mention!). Now, it’s mostly about wrapping up existing investments.

Just endure the retail investor criticism, and try to distribute all the tokens.

There was never really “crypto VC” to begin with.

Just too many investments made, and now it’s called “risk.”

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