Current situation of the Korean market: Projects are pouring in to seek exit liquidity, and airdrops are still the consensus

Soju mixed with beer becomes honey water, people on the dance floor sway to the DJs rhythm, Korean beef on the barbecue sizzles as its cooked to medium rare, and there are more than 300 side events... Korea Blockchain Week is so lively.

However, beneath the noise of music and alcohol lies a deep anxiety.

Project owners are anxious. The market is not liquid enough, there is a lack of new narratives, retail investors are not willing to buy, listing on top exchanges is becoming increasingly stringent, and investors are constantly asking, “WHEN LISTING?”

VCs are very anxious. Many of the projects they invested in are currently in a half-dead state. Projects that have already issued tokens are still locked up, and their market value is still declining every day. The funds life span is short, and fundraising is becoming increasingly difficult.

Entrepreneurs are very anxious. The primary market is cold. Many VCs only watch but do not invest. After months of talks, they still have not completed a new round of financing. Even if VCs are interested, they said they can only choose to follow the investment after confirming a strong lead investor.

The media and the community are anxious, being in the middle and lower reaches of the industry food chain, and needing the landlords to have surplus food to survive;

The exchanges are also very anxious. Trading volumes are shrinking and competition is intensifying. They can only comfort themselves that the situation is still better than that of the project owners.

The only way to relieve worries is a bull market.

Everyone is looking forward to a vigorous altcoin bull market, and many project owners are pinning their hopes on Q4, planning to list their tokens on exchanges in Q4.

However, waiting for the bull market is equivalent to waiting for death, so everyone began to focus on the Korean market to complete liquidity withdrawal.

Whether it is the project party or the VC, most of them come to Korea with the same mission and purpose: to find Korean exchanges to list their coins; to find Korean KOLs and communities for promotion.

At many events, the most common questions I heard were, Do you know anyone from Upbit and Bithumb? Can you introduce them to each other? Or, out of curiosity, How did XXXX and XXXXXX get on Upbit?

There is a growing awareness that Korean exchanges, especially Upbit, are the world’s leading altcoin trading market (liquidity exit venue), and Korean investors prefer trading on centralized exchanges rather than on-chain transactions.

There are four major exchanges in South Korea, Upbit, Bithumb, Coinone, and Korbit. Among them, Upbit is the absolute king, with a market share of 70%-80% in South Korea. In 2023, Upbit is the worlds second largest cryptocurrency spot market, second only to Binance.

Bithumb has long maintained its second position in the market, accounting for 15% to 20% of the total trading volume of the four major exchanges. Coinones market share is between 3% and 5%, and Korbits market share is less than 1%.

Therefore, listing on Upbit has become one of the long-term goals pursued by various project parties.

However, it is not easy to list on Upbit. Korean exchanges do not issue tokens for the first time, and Upbit’s listing standards have two requirements for token liquidity and listing exchanges:

Market demand:

Assess the trading liquidity and commercial viability of the proposed digital asset.

Review its known market capitalization, concentration of digital assets, number of wallets, or trading volume on other exchanges.

Listing status:

Review the current listing status of the proposed digital asset, including listings on other exchanges. Evaluate the reputation, jurisdiction, and AML/CFT practices of other exchanges.

A relatively open unspoken rule is that if you want to be listed on Upbit, you must first be listed on Binance/OKX, or at least Bybit.

The relatively closed Korean crypto market has also brought in many intermediaries or brokers who take advantage of information asymmetry to make profits. Some people help overseas projects do GTM in Korea. For example, SEI\SAGA and other projects are implemented by individuals rather than institutions in the Korean market; some people do KOL recommendation and management; some people provide guidance on listing coins on Korean exchanges...

There are many intermediaries, and the quality varies. A member of a local Korean institution told TechFlow that the Upbit listing process is very standard. If someone tells you that he can guarantee listing on Upbit, he is most likely a scammer. If you want to withdraw liquidity, you not only need to list on the exchange, but also need retail investors to buy. Finding Korean communities and KOLs to promote and bring goods has also become a rigid demand.

A local Korean marketing consulting agency said that their business volume this year is several times that of last year.

Once upon a time, many people knew that Korean cryptocurrency investors were concentrated on the local chat software Kakao, but the reality is that most crypto investors, especially young people, now gather on Telegram.

Statistics show that in 2023, the top 10 most forwarded channels among the top 110 Telegram channels in the Korean crypto market.

The channel with the most reposts was 코인같이투자(WeCryptoTogether), with 168,765 reposts, which was about 34% higher than the second place 취미생활방(EnjoyMyHobby) with 125,919 reposts.

The third to tenth places are @kkeongsmemo, @emperorcoin, @centurywhale, @mujammin 123, @masrshallog, @airdropAScenter, @seaotterbtc, and @kookookoob.

What information do Korean investors pay most attention to?

We can still find out more from the viewing and forwarding data of 110 Telegram channels.

Looking at the most viewed information in the Korean cryptocurrency community in 2023, three themes stand out.

1. Legal and regulatory issues in the Korean cryptocurrency industry. Content related to negative issues in the industry, such as privacy leaks, money laundering, and financial crimes, topped the list of views.

Second, new token investment opportunities, such as information about Sui token sales ranked fourth, which shows that Korean investors are very sensitive to new projects and profit opportunities;

Finally, ranked third are content related to macroeconomic indicators (such as CPI). This year, the trend of Bitcoins market is mainly affected by macroeconomic data.

Looking at the ranking of the most forwarded information in the Korean crypto community in 2023, we found that everyone is paying attention to the same topic - airdrops.

The most forwarded message was the “Summary of Airdrop Workflow” posted on the “Coinmap Hack” channel on March 20. This message detailed how to participate in airdrops from major projects such as Starknet, zkSync, and LayerZero. It was forwarded more than 2,600 times, ranking first.

Most of the messages ranked second to tenth are also about zero-cost information, such as how to obtain airdrops and free NFTs from projects such as zkSync and Starknet.

It seems that airdrops are a consensus that transcends nationality and culture and is familiar and recognized by all cryptocurrency investors.

As more and more projects are entering the Korean market, Korean KOLs/community managers are becoming more cautious about projects. The head of the local Korean community said that they prefer to cooperate with projects endorsed by well-known investment institutions, especially those with investment from Binance Labs.

Another piece of information that is difficult to fully verify is that Korean investors currently do not like Korean founders and investment institutions. If this is true, it is quite similar to the Chinese market. When I left Seoul, I asked several VCs and project practitioners, How did you gain from your trip to Korea? Most of them said not much, more fun/medical beauty, and some even felt embarrassed that they were wasting the companys money.

This may also be a reflection of the current situation of the Korean market. It looks beautiful, but it is not easy to withdraw liquidity in the Korean market.