Editor's Note: The crypto industry is experiencing a prosperous period of sustained price increases after undergoing multiple innovation cycles. However, behind the shiny surface lies hidden concerns— the innovation engine is gradually slowing down, and risk aversion is gradually eroding ambition and adventurous spirit. From DeFi, NFT to decentralized science (DeSci), past radical ideas are increasingly being replaced by more prudent business models. This article deeply analyzes this phenomenon and explores the opportunities and risks that perhaps the last 'bubble innovation' brings. In the face of an increasingly mature industry, can the crypto world regain its initial fearless ambition?
The following is the original content (for readability, the original content has been edited):
Surface glitz, inner fatigue
At first glance, the crypto industry seems to be thriving: after years of rejection, spot ETFs have finally launched, attracting record inflows for Bitcoin and Ethereum ETFs; Trump's election opened the door for the crypto industry to approach mainstream American society, and with increased lobbying power, Gensler and other opponents are facing greater pressure. Now, the crypto industry is recognized as an independent sector, and Bitcoin is even regarded by some countries as a reserve asset.
In terms of price, I remain optimistic about the crypto market, with the main upward momentum coming from external macroeconomic factors. However, I believe the innovation engine within the crypto industry is gradually slowing down.
As the industry matures, the speed of innovation naturally slows down; nevertheless, prices may continue to rise even in the face of a slowdown in innovation.
Source: LikeFolo
The real issue: the retreat of ambition
But I dare say that the slowdown of innovation is not the root of the problem, but a symptom. The real problem is that our ambition is fading, 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 content to pursue regulatory approval and institutional adoption.
Source: X
Don't just take my word for it; see how Vitalik wrote in his 2023 blog about 'bringing Ethereum back to its cyberpunk spirit':
'Our purpose is not only to develop isolated tools and games but to holistically drive a freer and more open society and economy, allowing different parts of technology, society, and economy to merge.'
Think carefully: what innovations are there in this cycle?
AI×Crypto counts as one.
But AI is an external innovation; without it, this cycle might still be stuck in the hype of meme coins.
Personally, I don't like meme coins because their only real goal is to get rich quickly, rather than truly change the world. The purpose of these projects is simply to make you wealthy enough to no longer care about the problems of the outside world.
Do you remember that phrase we often used in the previous cycle?
'[Project Name] is one of the most equitable things we have seen; ambitious, and if successful, will truly change the social structure.'
However, in contrast, we witnessed various radical innovations in the previous cycle:
DeFi
NFT
DeFi mining
P2E games like Axie Infinity
Metaverse
Source: X
The innovation of token economic models peaked between 2020-2021, for example:
Rebasing tokens (Ampleforth)
ve model token economics
(3,3) model
Liquidity mining
Using SNX as collateral for sUSD
Multiple algorithmic stablecoins
Current projects and VC supporters tend 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 token economic model industry.
The ICO frenzy of 2017 can be said to be the peak period of ambition, when all kinds of bold ideas attempted to decentralize everything. It was a bubble full of imagination, many ideas were too crazy to be realized, most projects failed, and the surviving projects had to dilute their visions.
Source: TimoElliott.com
However, these wild concepts attracted a group of people longing for a radically different world, including myself.
I recently read (Boom: Bubbles and the End of Stagnation) by B. Hobart and T. Huber, which explains that transformative progress comes from small groups with a unified vision who are well-funded but bear little responsibility. They argue that although financial bubbles have a negative reputation, many past breakthroughs benefited from them, and future progress will also be driven by this.
While we have not completely bid farewell to the era of 'lack of responsibility,' with the strengthening of regulations, the industry's risk aversion is increasing, and this might be the last big bubble cycle capable of bringing real innovation. I hope the bubble of AI combined with crypto can at least give birth to one or two killer applications.
Projects with remaining ambition
It's not to say that there are no ambitious crypto projects currently; here are some worth watching:
Ethena: Integrating DeFi, CeFi, and TradFi
Chainlink: Providing a bridge between tamper-proof smart contracts and real-world data
Pudgy Penguins: Expanding Web3 IP brands to Web2 industries
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 systems
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 precisely the risks ambitious protocols are willing to take. They are some of the most equitable things we have seen, ambitious, and if successful, will truly change the social structure.
Ethereum is obviously not on this list, and perhaps I am a bit harsh on Ether, but Vitalik's cyberpunk vision is almost undetectable on Twitter. The upcoming fork will have some very minor updates, which users might not even notice. It will abandon sharding technology and L1 scalability, and the best part we've recently thought of is a slight increase in the gas limit of blocks.
Ethereum seems to have outsourced execution and ambition to L2. The North Star of Ether is still not visible. I hope to see Ethereum greatness again and hope radical new ideas emerge. However, currently, Ethereum seems to have accepted the view that modular blockchains cannot scale, while Solana has chosen a completely different path, sticking to a single chain model, although network scalability may ultimately prove Ethereum's approach correct.
Humans need new boundaries
The world, especially the West, seems to be stagnating. Wage growth is stagnant, the new iPhone has lost its novelty, and even music sounds repetitive. We keep seeing the same movies remade because launching new movies is riskier than remaking classics. To some extent, we are even regressing. For instance, due to the retirement of the Concorde, 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. But I still feel that our speed of innovation and ambition is declining.
Part of this is an inevitable result of industry maturity, but we also seem to be starting to accept many technical limitations.
Source: imgflip.com
DeFi and DAOs are no longer fully decentralized, which seems to have become an acceptable reality. Rather than making DeFi truly decentralized, we might as well rename it on-chain finance, and the problem is solved. It's fine if Ethereum can't scale on L1; it doesn't matter if the token economic model lacks innovation.
$LQTY and $ENA's market cap gap indicates that we no longer truly need decentralized stablecoins; high yield is more important.
Perhaps with each passing cycle, our ambitions to push boundaries are weakening, leading to a gradually boring crypto industry.
Source: X
After all, if the token price is rising, why take risks? 🙂
This article is reprinted with permission from: (BlockBeats)
Original author: Ignas
'The crypto industry is becoming increasingly boring! Researchers are concerned about the slowdown of innovation; where are the ambitious projects?' This article was first published in 'Crypto City'
