Web3 in 2025: Replaying the Millennium Internet Bubble

In 2000, China.com went public on NASDAQ, with its market capitalization soaring to $5 billion on the first day, thanks to a portal website and the concept of “Chinese Internet.” They had no clear profit model, no core technological barriers, and even a stable user growth was out of the question. But that didn’t matter – investors weren’t buying a business; they were purchasing a ticket to “not miss out on the Chinese Internet.”

In the same year, AOL acquired Time Warner for $164 billion, creating the myth of the “merger of the century.” The market capitalization of a dial-up internet service provider surprisingly surpassed that of a media empire with tangible assets like CNN and Warner Bros. The logic behind this deal is simple: the internet represents the future, and traditional media must embrace change. As for how to make money? That's a matter for the future.

These two cases share a common script: first tell a sufficiently sexy story, secure a massive amount of financing, and then quickly go public to cash out. China.com relies on the “Chinese concept,” while AOL relies on the “internet portal.” Actual business profitability? That's not the focus. The focus is on making investors believe that missing this opportunity is equivalent to missing the next era.

Today, 25 years later, Web3 is precisely replicating this script.

A typical Web3 project is born like this: the team builds an official website, publishes a white paper full of technical jargon, and creates a few conceptual demos to showcase the possibilities of “decentralization” or “on-chain governance”. Then they start a roadshow, painting a grand vision for investors - it could be “reconstructing the internet value system”, or “allowing users to truly own data sovereignty”, or even “disrupting traditional finance”.

These narratives sound wonderful, just as inspiring as “the internet will change everything” back in the day. Investors are driven by FOMO (fear of missing out) and are pouring money in. Series A, Series B, Series C, valuations soar. After the project side gets the money, they continue to refine the narrative, expand the community, and generate buzz.

The next key step is to list on a cryptocurrency exchange. This is equivalent to an IPO listing in the past and is the ultimate cash-out phase of the entire game. On the day of the token issuance, early investors and the project party sell off to take profits, while retail investors take over. The market capitalization may surge to several billion dollars in a short period, but there is still no actual profit support behind it.

It's hard to say that these projects are complete scams. China.com did indeed create a portal site, and AOL did provide dial-up services, but these businesses simply cannot support that valuation. Similarly, many Web3 projects are indeed engaged in technical development, but they are still a long way from real commercial value. However, in the bubble, no one cares about this — what everyone cares about is when the next buyer will get on board.

The irony is that even the ways of failure are strikingly similar.

In 2001, the internet bubble burst, and the stock price of China.com fell to a few cents, eventually delisting. The merger of AOL and Time Warner was dubbed the “worst merger in history,” resulting in a $200 billion market capitalization evaporation. The reason these companies failed was not due to poor technology, but because their business models were flawed from the very beginning. When the tide goes out, all the glamorous concepts turn into jokes.

Web3 is also going through the same cycle. During a bull market, every project tells a story of changing the world, with valuations reaching hundreds of millions of dollars. When the bear market arrives, Token prices plunge by 90%, teams disband, communities disappear, and what was once considered “revolutionary innovation” turns into an unmaintained code repository on GitHub. Most projects have never generated real revenue and never will.

This is not to say that Web3 technology has no value. Just as the internet truly changed the world, technologies like blockchain, smart contracts, and decentralization may also create real business value in the future. The problem is that the current Web3 industry is obsessed with repeating the financing games of the millennium, rather than solidly addressing real issues.

Technology can innovate, but the essence of the business model has not changed: telling stories, raising funds, and going public to cash out. It was once called “internet concept,” now it is called “Web3 narrative”; it was listed on NASDAQ back then, now it is listed on Binance and Coinbase. The form has changed, but the core remains the same.

History does not simply repeat itself, but it is always astonishingly similar. Investors in 2000 believed that “the Internet equals the future,” while investors in 2025 believe that “Web3 equals the future.” They are both half right—technology does represent the future, but the vast majority of companies chasing trends are doomed to become the casualties of the bubble.

But to be fair, Web3 has indeed left some real things.

Blockchain networks process millions of real transactions every day. Although most of these are speculative in nature, the underlying technology is indeed functioning. Smart contracts allow agreements to be executed between strangers without the need for trust, which theoretically has its value. Some DeFi protocols do provide decentralized financial services, although the users are primarily cryptocurrency players. NFTs allow the ownership of digital assets to be verified and traded, even though 99% of NFT projects have gone to zero.

These technological innovations do exist, but the problems they currently solve are not really needed by most people. Until the real world begins to create real demands in a brutal way.

The world in 2025 is experiencing unprecedented turbulence.

Frequent geopolitical conflicts have made trade wars and financial wars a norm in national games. After Russia was kicked out of the SWIFT system in 2022, millions of ordinary people's cross-border payments and savings were instantly frozen. Countries like Argentina, Turkey, and Lebanon saw their currencies depreciate sharply, causing people's life savings to evaporate in inflation. Some countries have suffered financial sanctions due to geopolitical reasons, leading to a decoupling of their banking systems from the global system, and companies are unable to conduct normal international trade settlements.

These disasters reveal a harsh reality: in the traditional financial system, individual wealth and trading freedom completely depend on national credit and international political relations. When conflicts arise between nations, ordinary people become the first victims. Your deposits may be inaccessible due to sanctions, your cross-border remittances may be rejected for political reasons, and your local currency assets may become worthless overnight due to currency wars.

These are not theoretical deductions, but rather facts that are happening. It is these disasters that stimulate the most essential demand for Web3 - borderless, permissionless, decentralized financial services.

This demand is completely different from the speculation and hype in the Web3 space over the past few years. It's not about “getting rich overnight by trading contracts with 100x leverage,” nor is it about “buying a certain meme coin and waiting for a pump,” but rather arises from the most fundamental desire in the real world: to preserve one's wealth and allow money to flow freely without becoming a victim of disputes between countries.

A small business owner in Argentina wants to convert income into stablecoins to avoid the depreciation of the peso. A freelancer from a sanctioned country wants to receive payments from overseas clients through cryptocurrency. An immigrant worker wants to send remittances to relatives back home at a lower cost, instead of being charged high fees by traditional remittance agencies. These needs are simple, real, and urgent, yet difficult to meet within the traditional financial system.

Web3's decentralized financial services can precisely bypass these obstacles. It does not require bank approval, does not need state permission, and is not affected by geopolitical influences. As long as there is a network, value transfer and storage can occur. This is not a hyped-up false demand, but a real demand forced by the realities of the world.

Ironically, all Web3 projects have been talking about “inclusive finance” over the past few years, but the real users are not the speculators chasing financial freedom in developed countries, but ordinary people in troubled regions seeking basic financial services. The former cares about how many times the Token can rise, while the latter cares about whether the money for tomorrow's meals will disappear due to currency collapse.

If Web3 really has a future, it might not come from the star projects in Silicon Valley that have raised hundreds of millions of dollars, but rather from the applications quietly providing services in Argentina, Turkey, Lebanon, and Nigeria. They do not need fancy white papers, do not need to be featured on Binance headlines, they just need to enable an ordinary person to safely store 100 dollars or smoothly transfer 50 dollars to family in another country.

This is the real growth point of Web3 decentralized inclusive financial services—not providing more speculative tools for the rich, but offering the most basic financial services to those who have been abandoned or harmed by traditional financial systems. As global situations become more turbulent, this demand becomes more intense.

Perhaps in another ten years, when the infrastructure matures, when real demand continues to rise, and when those projects that are grounded in solving problems gradually grow, we will find that Web3 has indeed left some valuable legacies. Just like after the internet bubble, e-commerce, social networks, and cloud computing eventually changed the world.

But that value will not come from the current crazy financing and hype projects. It will come from the few survivors who persist during the bear market and quietly build when no one is paying attention. And before that, we will have to witness the collapse of more Zhongguo Wang and AOL, to wait for the real Web3 era - if it indeed comes.