A staggering 99% of Web3 projects fail to generate cash revenue, relying instead on tokens and external funding to cover costs, according to recent findings. Despite lacking cash flow, many projects continue to spend heavily on marketing and events, often at the expense of product competitiveness. This reliance on investor losses rather than business profitability highlights systemic flaws within the Web3 ecosystem. The market's distorted cycle allows early token generation events (TGEs) to enable founders to exit with profits, regardless of project success. This has led to inflated valuations based on visions rather than tangible products, with only 1% of projects demonstrating substantial revenue and reasonable price-to-earnings ratios. As the market matures, investors are increasingly wary, demanding proven revenue capabilities from projects to avoid rapid sell-offs and exits. The current Web3 landscape favors short-term hype over long-term development, with many projects unable to justify their high valuations. This environment has created a "dilemma trap" where projects either focus on unsustainable marketing or face dwindling market attention. Ultimately, the burden of these failures falls on investors, as the majority of projects struggle to validate their business models.