Cryptocurrency Project Error Rate: Why Can't It Be Completed in 18 Months

Currently, strange phenomena are occurring in the cryptocurrency industry. Founders are constantly chasing new trends, shifting strategies from NFTs to DeFi, then to AI agents, and prediction markets one after another. At first glance, this adaptability seems wise, but it actually conceals a serious problem of high error rates. In other words, strategic shifts aimed at short-term capital inflows are structurally hindering long-term value creation.

Shortened Product Cycles and the Expansion of Error Rates

The development cycle of cryptocurrencies used to be 3 to 4 years. However, now this cycle has been dramatically shortened, even in the best cases to 18 months. By Q2 2025, crypto venture capital funding had decreased by nearly 60%. This rapid fluctuation of funds causes founders to lose the time needed to mature their projects before the next trend forces them to pivot.

True infrastructure development requires at least 3 to 5 years. Achieving product-market fit (PMF) involves continuous improvement over many years, not just a few quarters of iteration. Building something meaningful in 18 months is nearly impossible, and this time constraint is a major factor increasing the overall error rate in the industry.

The Sunk Cost Fallacy: The Psychological Mechanism Behind Strategic Shifts

Traditional business theory recommends early withdrawal from failed projects to avoid the “sunk cost fallacy.” However, the crypto industry has completely reversed this logic. Here, the sunk cost fallacy becomes a survival strategy, and long-term perspectives are penalized.

In reality, founders constantly face this trade-off: continue developing existing products and aim for success in 2-3 years, or shift to the current hot story, raise funds quickly, showcase paper profits, and withdraw before anyone notices the failure. Statistically, projects that choose the latter strategy are overwhelmingly more common. This high error rate reflects the market’s short-term incentive structure.

Why Nearly Complete Products Keep Emerging

Very few crypto projects are delivering results according to their roadmaps. Most projects remain in a state of “almost complete.” They are always missing just one feature needed to achieve product-market fit, and this state persists indefinitely.

When market sentiment suddenly shifts, the completion of DeFi protocols becomes meaningless overnight, and everyone starts talking about AI. As a result, true completion is never reached. The market’s tendency to sharply evaluate finished products stems from the fact that they have known limitations, whereas “almost complete” products hold infinite storytelling potential. This asymmetry in evaluation is a fundamental mechanism that continues to elevate the error rate.

Capital Chases Attention, Not Finished Products

In the crypto world, a new story can raise $50 million even without a product. Conversely, if a story is well-established and a product is available, raising $5 million becomes difficult. Moreover, if the story is outdated and there are existing products and active users, fundraising becomes nearly impossible.

Venture capitalists invest not in actual products but in the ability to attract attention. Many recent teams are optimized for “maximizing stories,” and “what they are actually building” is no longer important. The completion of a project limits founders, while abandonment offers more options. This error rate is an inherent flaw in the capital allocation mechanism itself.

Team Attrition and the Attention Error Rate

When a new story emerges, talented developers are poached by new projects offering double salaries. Marketing leaders move to companies that have just raised $100 million. Teams chasing stories that lost attention six months ago cannot compete.

No one wants to join boring, stable projects. They seek chaotic, well-funded projects with the potential for tenfold profits, even if there is a risk of failure. This talent allocation error rate significantly hampers overall industry productivity.

User Churn and the Vicious Cycle of Unsustainable Growth

Crypto users tend to use a product simply because it is “new,” “talked about,” or “might have airdrops.” But when the hype shifts, they leave immediately. Even if the product is later improved or features users wanted are added, they rarely return.

Building sustainable products for unsustainable users is impossible. In fact, some crypto founders have repeatedly shifted strategies so many times that they forget their original vision: from decentralized social networks to NFT marketplaces, then DeFi aggregators, gaming infrastructure, AI agents, and prediction markets. Transformation has become less of a strategy and more of a business model itself.

The Infrastructure Paradox: The Reversal of Pioneers and Followers

In the crypto world, projects established before the hype cycle tend to survive longer. Bitcoin was born before VC funding and ICOs existed. Ethereum was created before the ICO boom and before the future of smart contracts was foreseen.

Most projects born during the hype cycle disappear with its end, but those established before the cycle are more likely to succeed. However, due to lack of funding, attention, and exit liquidity, few founders can build stories before the hype cycle. This high error rate reveals a structural contradiction in the market.

Structural Contradiction: Why Transformation Never Stops

Breaking this vicious cycle is extremely difficult for several reasons:

First, token-based incentives create liquidity-driven exit opportunities. If founders and investors could exit before the product matures, they would.

Second, information and emotions spread much faster than construction. By the time a project is completed, everyone already knows its limitations.

Third, the overall value proposition of the crypto industry is rapidly evolving. Demanding long-term development means deviating from the ideal state of crypto assets.

In other words, even if a product takes three years to develop, someone can copy it in three months with poor code and excellent marketing, and win.

Because crypto is fundamentally at odds with long-term thinking, everyone is forced to compromise. Founders can refuse to pivot, stay true to their original vision, and spend years on development. But the higher likelihood is that they will go bankrupt, be forgotten, and ultimately be replaced by competitors who have pivoted multiple times.

The market values continuous creation of new things over completeness. Perhaps the true innovation in the crypto industry lies not in the technology itself but in how to generate maximum value with minimal investment. This high error rate is the biggest obstacle to the industry’s development.