The ‘WAGMI’ mentality is weakening crypto.

In the year By 2021, it looks like 10 new Disneys – and the next 20 Picassos – will emerge from the blockchain and various collections of non-fungible tokens (NFT).

The inflated NFT values ​​that year showed strong confidence in many projects. But two years later, those “next Disneys” offered little. The situation has created a lot of market frustration and disappointment among investors and fans.

Project failures are often the founders. However, the greed, anxiety, and irrationality prevalent among Web3 participants also played an important role in the ecosystem.

Related: 3 Things Driving Ethereum and Bitcoin in the Next Bull Market

We are in a complex environment where even the most skilled and visionary innovators find it challenging to navigate the dynamics of the market. This often leaves unfinished projects and unfulfilled expectations, further eroding confidence in the sector.

The harmful effect of greed

Imagine a party sold out with $100 tickets. Someone eager to engage with friends will lose the first sale. Turning to the secondary market, they pay $500 for a ticket.

Since the event is intended to provide a $100 experience, the potential for disappointment is high. At $500 a ticket, expectations are inevitably high, which often means the experience doesn't match the reality.

In the crypto market, this greed-induced frenzy can be seen. Initially, you can pay 20 Ether (ETH) for NFT sold for 0.5 ETH, but it is important to balance your expectations with the price of 0.5 ETH. (This is especially true considering how Web3 royalties have declined, which has prevented founders from reaping the benefits of high-value secondary sales.)

Placing your mental emphasis on the initial value you see for an object—rather than considering the entire context—is known as bias, and initial information strongly influences later decisions and perceptions. That is, buyers view the NFTs they buy as an “anchor” to their expectations regarding the high value of the utility, leading to a cycle of disappointment.

Anxiety also creates problems

Developing a quality product takes time. But the market often expects unrealistically fast growth.

That expectation puts a lot of pressure on developers and founders who find themselves in a cycle of constant announcements to satisfy the community's need for constant stimulation and improvement.

In the last cycle, large gaming projects presented an example of this phenomenon. Some individuals believed that ambitious AAA games – built on Unreal Engine 5 – could be delivered within months, although they typically require three to five years of development.

When you know it's going to take longer, you feel like a year is 10, so when you're addicted to change, drop the sign.

In some cases, making the construction process open to the public is a blessing that Web3 has made possible. However, it can create a toxic climate that negatively affects the mindset and well-being of project founders.

The role of irrationality

Studies show that approximately 75% of venture-backed startups fail.

Like startups, NFT clusters operate in risky, experimental environments. However, the market often ignores the risk, instead waiting for indefinite success and growth.

This is largely driven by confirmation bias, a psychological phenomenon that involves ignoring evidence to the contrary and focusing on information that is consistent with one's existing beliefs and preferences.

During the previous bull run, this was typified by “WAGMI,” a nickname for “we all do it.”

But in a market driven by buying and selling, some participants must lose in order for others to win.

That, unfortunately, means no WAGMI – especially in an environment where financial literacy is low and stress abounds. This combination can be particularly dangerous as it leads to decisions driven by emotion rather than rational analysis.

Related: History tells us we're in a strong bull market.

Since 2021, the ecosystem has improved a lot. Good projects that have been able to adapt to market changes and market conditions have become more prominent, and greater human maturity has also been observed.

Many founders become “CEOs” overnight, which is the equivalent of turning a car tire at 100 miles per hour – 24 hours a day, seven days a week. Almost three years later and some pivots later, many of these CEOs and teams are more mature, prepared and focused on delivering something worthwhile.

And while success largely depends on them, it also depends on the maturity of the Web3 community. Good bosses will not be enough to fix the game if it is corrupted by excessive greed, anxiety and irrationality. Investors should keep this in mind — and try to improve financially and personally — as we head into the next bull run.

This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.