Original Title: Crypto's Waning Ambition
Author: Ignas | DeFi, Co-founder of @PinkBrains_io DeFi Creator Studio
Translated by: Ashley, BlockBeats
Editor's Note: The crypto industry is entering a booming period of sustained price increases after undergoing several innovation cycles. However, behind the shiny surface lies hidden worries—the innovation engine is gradually slowing down, and risk aversion is gradually dissipating ambition and adventurous spirit. From DeFi, NFT to decentralized science (DeSci), past radical concepts are gradually being replaced by more prudent business models. This article deeply analyzes this phenomenon and explores the opportunities and risks that perhaps are the last 'bubble-like innovations.' In the face of a gradually maturing industry, can the crypto world still regain that fearless ambition of a newborn calf?
Below is the original content (for easier reading and understanding, the original content has been edited):
Shiny on the surface, weary inside
At first glance, the crypto industry seems to be thriving: after years of rejection, spot ETFs have finally launched, attracting record capital inflows for Bitcoin and Ethereum ETFs; Trump's election opened the door for the crypto industry to approach mainstream American society, and with increasing lobbying power, Gensler and other opponents face greater pressure; today, the crypto industry is recognized as an independent industry, with Bitcoin even regarded as a reserve asset by some countries.
In terms of price, I remain optimistic about the crypto market, with the main upward momentum coming from external macro factors. However, I believe that the innovation engine within the crypto industry is gradually slowing down.
As the industry matures, the speed of innovation naturally slows down, yet prices may continue to rise even in the face of this deceleration in innovation.
The real problem: the waning of ambition
But I dare say that the slowdown in innovation is not the root of the problem, but rather a symptom. The real problem is that our ambition is waning, and the industry's aversion to risk is increasing.
The crypto industry once rose due to radical ideas that could disrupt the world, but now seems satisfied with pursuing regulatory approval and institutional adoption.
Don't just take my word for it; see what Vitalik wrote in 2023 about 'Returning Ethereum to its Cyberpunk Spirit' in his blog:
Our purpose is not just to develop isolated tools and games, but to holistically promote a more free and open society and economy, allowing different parts of technology, society, and economy to integrate with each other.
Think carefully: what innovations have emerged in this cycle?
AI×Crypto can be considered one.
But AI is an external innovation; without it, this cycle might still be stuck in the hype of meme coins.
Personally, I do not like meme coins because their only true goal is to get rich quickly, rather than truly changing the world. The purpose of these projects is merely to make you rich enough to stop caring about the issues of the outside world.
Do you remember the phrase we often used in the last cycle?
[Project Name] is among the most equitable things we have seen, ambitious, and if successful, will truly change the social structure.
However, in contrast, we witnessed many radical innovations in the previous cycle:
DeFi
NFT
DeFi mining
P2E games like Axie Infinity
Metaverse
Between 2020 and 2021, innovations in token economics also reached their peak, such as:
Rebasing tokens (Ampleforth)
ve model token economics
(3,3) model
Liquidity mining
Using SNX as collateral for sUSD
Multi-algorithm stablecoins
Current projects and VC supporters are more inclined to adopt time-tested simple token economic models, favoring robust operations, as they often only have one opportunity for TGE.
$EIGEN (Subjective Objectivity Token) is a rare exception in the field of token economics models.
The ICO frenzy of 2017 can be said to be the peak of ambition, where various bold ideas attempted to decentralize everything. It was a bubble full of imagination, many ideas were too crazy to realize, most projects failed, and those that survived had to weaken their visions.
However, these wild concepts attracted a group of people longing for a vastly different world, including myself.
I recently read B. Hobart and T. Huber's (Boom: Bubbles and the End of Stagnation), where they explain that transformative progress comes from small groups with a unified vision, well-funded, yet requiring little accountability. They argue that while financial bubbles have a negative reputation, many past breakthroughs benefited from them, and future progress will also be driven by this.
Although we have not completely bid farewell to the era of 'lack of accountability,' with increasing regulation, industry risk aversion is rising, which may be the last bubble cycle that can bring about real innovation. I hope the bubble of AI combined with crypto can at least spawn one or two killer applications.
Projects with remaining ambition
It's not that there aren't ambitious crypto projects right now; here are some worth paying attention to:
Ethena: Merging DeFi, CeFi, and TradFi
Chainlink: Providing a bridge between tamper-proof smart contracts and real-world data
Pudgy Penguins: Expanding from Web3 IP brand to Web2
WorldCoin: Enabling on-chain identity for everyone through eye scanning, with potential AI-funded UBI
Liquity/RAI: The last decentralized stablecoin
Arweave/Filecoin: Permanent storage and anti-censorship
Farcaster/Lens: Redefining social media
Polymarket: A source of truth in the era of fake news
Bio Protocol (DeSci): Disrupting scientific research by changing incentive structures
Bitcoin: Revolutionary digital gold
You might think that WorldCoin's eye scanning is too radical, or that Liquity v2 and its stablecoin named $BOLD cannot succeed. But these are the very risks that ambitious protocols are willing to take. They are among the most equitable things we have seen, ambitious, and if successful, will truly change the social structure.
Ethereum clearly did not appear on this list. Perhaps I am being a bit harsh on ETH, but Vitalik's cyberpunk vision is almost imperceptible on Twitter. The upcoming fork will have some very minor updates, at least users won’t notice. It will abandon sharding technology and L1 scaling; the best part we could think of recently is to slightly increase the gas limit for blocks.
Ethereum seems to have outsourced execution and ambition to L2.
The North Star of ETH remains unseen. I hope to see Ethereum become great again and for radical new ideas to emerge. However, currently, Ethereum seems to have accepted the notion that modular blockchains cannot scale, while Solana has chosen a completely different path, sticking to a single-chain model, even though network scaling may ultimately prove Ethereum's approach correct.
Humans need new boundaries
The world, especially the West, seems to be in a state of stagnation.
Wage growth has stagnated, the new iPhone lacks innovation, and even music sounds repetitive. We constantly see the same movies being remade because launching new films carries higher risks than remaking classics. To some extent, we are even regressing. For example, due to the Concorde's retirement, the flight time from London to New York is now longer than in the 1970s.
However, crypto remains one of the fastest-growing and most innovative industries in the world, perhaps second only to AI. Yet, I still feel that our pace of innovation and ambition is declining.
Partly due to the inevitable result of industry maturation, but we also seem to be starting to accept many technical limitations.
DeFi and DAOs no longer being fully decentralized seems to have become an acceptable fact. Instead of making DeFi truly decentralized, we might as well rename it to on-chain finance, and the problem would be solved. It doesn't matter if Ethereum can't scale on L1; it doesn't matter if the token economics lack innovation.
The market cap gap between $LQTY and $ENA indicates that we no longer truly need decentralized stablecoins; high yields are more important.
Perhaps, with each passing cycle, our ambition to push boundaries is weakening, and as a result, the crypto industry is gradually becoming boring.
After all, if token prices are rising, why take risks? :)
