According to PANews, the current state of the crypto industry mirrors the challenges faced in the third and fourth quarters of 2019. During that period, the industry was engulfed in speculative activities such as Fomo3D, EOS gambling Dapps, and high-leverage perpetual contracts, leading to a loss of faith and confidence among participants. The notion that 'crypto equals Ponzi' gained traction, and smaller centralized exchanges introduced multi-level commission ambassador programs to attract users.
Despite the bleak outlook, the DeFi Summer emerged just nine months later, transforming the industry with disruptive innovations and highlighting the potential of the 'value internet.' However, the crypto market appears to be in a similar predicament once again. The disappointing performance of some high-profile project tokens post-TGE has led to unprecedented skepticism and disdain towards venture capital narratives. The concept of 'value coins' has become a target for ridicule and criticism, with irrationality, fragmentation, and noise dominating the market.
Some prominent venture capitalists have embraced the 'Meme is King' mantra, capitalizing on the irrational market structure to extract liquidity and profits. Although some voices within the VC community argue that memes are not the essence of crypto, they face backlash from retail investors. The meme frenzy on Solana is seen as a strategic move to capture Ethereum's long-tail asset liquidity, while the meme explosion on the Base chain is viewed as Ethereum's response to the competition.
The ongoing competition between the Ethereum and Solana ecosystems has diverted market attention and liquidity. In addition to this liquidity battle, Solana has introduced new primitives like ZK Compression and Blinks to compete with Ethereum in scalability and Web3 social domains. This intense competition has overshadowed other paradigm-shifting innovations at the edges of the crypto industry, such as Dapp Rollup, chain abstraction, AI Oracle, AI Dapp, Consumer Chain, ZK coprocessor networks, and the Bitcoin ecosystem. These innovations are expected to disrupt and reshape the industry in the next innovation cycle, similar to how DeFi transformed the market previously.
Crypto and Web3, as emerging technologies, follow the Gartner Hype Cycle, experiencing phases like the technology trigger, peak of inflated expectations, trough of disillusionment, slope of enlightenment, and plateau of productivity. It is crucial to maintain rationality during both the peak of expectations and the trough of disillusionment. Recently, a tweet by Ethereum Foundation leader Peter, expressing regret about his career choice, went viral. He compared the value of SpaceX's engine iterations to Web3's technological advancements, criticizing the industry for lacking value creation and focusing on value transfer. While his perspective is valid, it may not fully resonate with those in non-free market environments, where BTC and Web3 value networks are seen as the only path to redemption for the current generation.
