On June 9th, Jin10 data reported that currently more than 180 ETFs have a daily trading volume of less than one million yuan, with some ETFs even having a daily trading volume of less than ten thousand yuan, indicating that liquidity is on the brink of exhaustion. Looking at past developments, whenever popular indices are released, numerous fund companies rush to position themselves, but the Matthew effect of ETFs is very pronounced; leading ETFs have scales exceeding 100 billion yuan, while trailing products struggle on the “death line.” Behind the “ice and fire” dichotomy lies a dual dilemma of homogeneous competition and lack of innovation. For the ETF market with a total scale exceeding 40 trillion yuan, how to use differentiated innovation to break the homogeneous competition is worth considering.