Liquid Capital founder suggests improving crypto VC exit mechanisms to activate capital and promote industry innovation

Gate News: On March 10, Liquid Capital founder Yi Lihua posted on X platform, pointing out that the encryption industry has faced innovation decline in recent years, mainly due to two reasons: first, the tightening of U.S. crypto policies during the previous administration, which is expected to be addressed with the passage of the Crypto Structure Act; second, some exchanges require projects to implement a 1+3 year lock-up mechanism for crypto VCs. Yi Lihua stated that the lock-up mechanism was originally intended to cultivate long-term investment thinking, but the actual result is that project teams, market makers, and exchanges prioritize liquidity exit, while VCs face zeroing risks during the long unlocking period. VCs should bear the greatest risks in the primary market but also face the latest exit risks, which contradicts traditional investment market principles, leading to the collective demise of crypto VCs, difficulties for high-quality entrepreneurs to raise funds, and reduced industry innovation. Yi Lihua recommends providing better exit mechanisms for crypto VCs to activate VC capital, which is beneficial for industry innovation and also advantageous for exchanges to list high-quality assets.