Every weekday, at 9:00 am I disrupt my inner peace. I open Slack and all the other noisy apps and check the messages & notifications that scream for attention. It’s the same for millions of corporate workers. I bet they, too, feel a sense of stress and dread that moment — unless they are one of those people who absolutely love their job or middle managers whose only job is tagging people and shuffling work they are supposed to do to others (many such cases).
Obviously, this entire procedure isn’t new. What’s new is my lack of excitement for the space.
Just a few days ago, a copy-pasta made its rounds on CT. It went along the lines of “Crypto is over, this time is different, and we haven’t done anything useful for the world.”
Obviously, whoever started it started it as a gag — presumably hoping to mark the bottom with it. Unfortunately, though, I do entertain the same thoughts in all seriousness.
Is this time different?
I’ve been in crypto for now over 5 years. It’s not my first downturn, nor the first elongated crab season. I know it all happens in cycles, but maybe this time, it’s a little more depressing than it used to be.
Here are a few of my observations :
People are disillusioned
Myself included. The best word to describe me at this stage is despondent.
Plenty of the people I admire and respect in the industry share a similar sentiment. I think a lot of it comes down to the lack of meaning we might obtain from working in crypto. We’ve had this tech for over a decade and yet failed to make a meaningful dent in history.
We’ll be remembered for the epic scams we facilitated (FTX, Luna, Celsius etc..) and for enabling people to buy and sell access to their friends. We’ve also done our part to prop up North Korean GDP (thanks, Lazarus) and contributed to burning the oceans using NFTs as the vehicle.
It’s funny that not many speak about the amount of energy required to run all these LLMs, yet crypto is painted as the evil climate criminal. Maybe it’s because people consider the value they get out of ChatGPT and Midjourney to be worth that cost.
We set out to bank the unbanked, but so far, we’ve just managed to unbank people transferring money to crypto exchanges. Lol.
It makes you wonder, are we generating more bad than good at the current stage? It sure feels like we do a lot of non-sensical things at the expense of the initial values of the space. Or any moral values, for that matter.
We went from trying to build an alternative financial system that would allow people to transact without intermediaries to kissing up to big corporates — and maybe even worse — endorsing CBDCs.
What could be more amazing than when the government can track how you spend every single cent? Cash is freedom, they say. Crypto was supposed to be that.
It is fair to say that privacy and other cypherpunk values have been lost along the way. There are a few niche communities still holding them up — but they tend to get drowned out in the noise.
Those who came to crypto for that, naturally, will find their sense of belonging eroded.
Lot of noise, little imagination
2023 has been the year of Layer-2s, for better and worse. It’s great that we came up with fixes to a lack of scalability of an L-1 that was supposed to be a world computer.
But do we really need 100s of them? It seems that every other day now, someone is either building a new L-2 (faster, more private, better vibes) or pivoting their L-1 to an L-2. There aren’t close to enough users to warrant such an abundance. Or shall we say enough use cases that would make people jump through the hoops that is using an L2 or various?
It’s all iterative at best or simple copying.
I am not a fan of Solana, but at least they went all in on their “hardware is all you need” thesis, and they stuck with it. I respect the conviction. I also respect their idea of adding new features only when it’s required and customers are ready to pay for it — a notion of product-market fit that more chains should pay attention to instead of adding whatever is trending.
A token standard isn’t a moat. It’s just copy-pasta.
Whenever something successful comes around, like Friend Tech, it isn’t long until tens of forks will pop up. The prospect of free internet coins is to the modern-day crypto investor what the mesmerizing songs of the Sirens were to Odysseus and his crew.
Unlike Odysseus, though, few have the foresight to restrict their ability to engage with the Sirens of Wealth.
I wasn’t surprised that Stars Arena got exploited for $3 million. It’s more shocking that they were able to mess up a contract that was otherwise secure. And that the founder of the blockchain just went: “Whatever, shit happens.”
And the audacity of the team to call this exploit a “War on the little guy.” You know, the real enemy of the little guy is the people who take their attention and funds away from more important, meaningful endeavors.
Wherever you look, it’s all just copy-pasta. A few projects are still originals and focused on doing something new, but many just jump on the latest trend in an attempt to squeeze more money out of retail and/or VCS.
This lack of imagination is distressing for those who came in to empower and enable humans to do things differently and in bigger pursuits. The lack of creativity goes beyond the businesses spun up and includes marketing or events run.
Recent conferences I’ve been to were boring affairs at best. For some reason, the organizers assumed that just putting all the people in a room and hosting a bunch of talks with titles that have been discussed millions of times before would be enough.
It wasn’t.
Token Price Maximization
Thanks to the FTX trials, we learn how, with a little bit of due diligence, the VCs that pumped millions of dollars facilitating the wood nymphs crew around Sam could have spotted the huge holes in their asset management.
Instead, they were blinded by Sam playing League of Legends while on a VC call — apparently a sign of a genius founder. Or maybe this is just the story they created around it to make it less about the money.
I don’t blame VCs for wanting to make a return. That is kinda their business model.
However, not doing enough due diligence is blatant neglect. I also do see some fault in them pushing founders to issue tokens so that they can exit quicker. I don’t even believe everything needs its own token, but since it’s a good vehicle to liquidate before an IPO or buy-out, it seems beneficial for investors looking for faster returns.
On that note, I can recommend reading Evil Tokenomics. it’s a fun little book, and while it generalizes quite a bit, it still hits the nail on the head with its assessment of how you can run your project to make yourself and VCs (if you so choose) quick money at the expense of retail.
It’s not just VCs and other investors that are about the money; many projects become so fixated on the token price that they forget about whatever they set out to achieve in the first place. Things start being evaluated not by the value they create for users but by their impact on price. Tokenomics are structured heavily on the supply side because things like “burn” and scarcity make prices go up, while little thought goes into the demand side.
Maximizing token price is the equivalent of Shareholder Value Maximization in the traditional economy, a principle that even Wall Street realized wasn’t smart.
Who the hell gets inspired by an industry that is seemingly only about money? I guess, people who really like money — but that’s not the kind you want to hang out with too much.
A little hope
is left.
The positive in this situation is that it has confronted me more with what I actually care about and why I am in this space. I didn’t stay in crypto to get rich quickly (I still am not, so there is that), nor to shill new tech for the sake of it.
Tech is a means to an end. Ultimately, our focus should be on serving humans, not being a horseman of capitalism on drugs. There is room for stablecoins and DeFi to enable widespread access, but often, speculation takes away from that and might discourage those who need it most from participating.
For now, I’d bet that 80% of people working in crypto use a lot more web2 apps and tools than web3. I use AI way more than crypto. Because I am obsessed with image generation, and ChatGPT is great at summarizing boring articles.
It frees up time for other pursuits. A huge value-add.
The only crypto app I check daily is Warpcast, a social app. You won’t see anyone shill tokens on there. It’s quite a wholesome space with the people who came here to enable creative pursuits, empower people, and allow them to connect across borders in a permissionless way.
Not all the “value generated” has to be financial. It can be social. It can also be fun or learning something.
Unlonely’s Love on Leverage is a stellar example of entertainment that draws people in with its quirky interface and the ability to bet on the outcome of data. Another big part of it is the chat in which the audience discusses how the live-streamed dates are going. It’s like having a watch party with friends + hilarious live commentary from the host, Brian.
The value can also be in community experiences.
Metalabels’ Lonley Writers Club brought together people identifying as lonely writers, providing a safe space to share one's struggles and ambitions and simply be heard and understood. That’s very rare in web3. I still do one of the exercises once in a while mentally — it grounds me in the present moment.
I believe we do have the tech to build tools and spaces for humans to better coordinate, be creative together, and enjoy community outside of web2, which has become an unhealthy constant stream of information overloading our brains.
If only this industry could be a bit more human-focused, I’d feel much better about it.
Disclaimer: This is not to make you depressed; it’s just my thoughts on what I observe. Obviously, some things are generalized and dramatized. Also, not that this is psychological advice, but if you got this far and feel similar about the space, go for a long walk in nature without a phone. Spend time with your thoughts. Reflect. It works wonders. If you walk around the world with open eyes, you might find a lot to marvel at.
And in autumn, you can collect a lot of nature’s airdrops, from beautiful leaves to chestnuts.
