The commercialization of cryptocurrencies may mean that the real opportunities are just beginning.

Written by: Jesse Walden, Co-founder of Variant Fund

Compiled by: 0xjs@Golden Finance

The first decade of smart contract blockchains was born out of Bitcoin’s original cypherpunk values: censorship resistance, open source, permissionless, and a new hope for a democratic/fair internet built on a shared world computer.

Today, these ideological values ​​are facing market pressure because the mainstream market values ​​different things: performance, cost, profitability, compliance.

Powerful technologies are rarely used the way their creators or early adopters intended. Look at Bitcoin (a “peer-to-peer electronic cash system”) versus a Bitcoin ETF or USDC.

As the original value of smart contract blockchain merges with mainstream market value, the next decade may develop in a different direction.

Many of the growing use cases for smart contract platforms (fiat stablecoins/RWAs, open finance, many DePIN networks) are neither decentralized, permissionless, nor censorship-resistant, but simply leverage the decentralization of the underlying blockchain to achieve openness, interoperability, and settlement. Applications are also increasingly abstracting L1 cryptocurrencies, which have historically been viewed as censorship-resistant "internet money," leading many to rethink the value proposition of the largest market cap tokens, including the base assets of the next generation of public chains.

For early adopters, this may be hard to accept. It's not what many in the industry were expecting. Does this mean it's over?

I don't think so. But this may just be the end of a prologue.

Cryptocurrencies are being commercialized in order to meet the market’s demands for their value. Commercialization, especially the commercialization of open/permissionless software, is the form factor that brings good ideas to the largest audience and thus has the greatest impact on the world.

Commercialization often involves compromise. The opportunity lies in shaping the nature of these compromises and thus the outcomes of commercial impact. To do this, you must abandon ideological dogma, adapt to the game of the field, compete, and try to steer things in the direction you want them to go.

For example, compromising on decentralization for the sake of scale (whether through Rollups or integrated architectures) could better serve the use case of getting wallets into people’s hands. If this works, the next opportunity is to improve decentralization — and then, teach more people to learn new things that lean toward the original ideology.

For me, it’s a personal thing. I care a lot about the original ideology; that pull brought me here. That being said, I care even more about influence. I learned this lesson in a different creative scene. I went to university in Montreal, which had an incredibly rich cultural scene at the time (Arcade Fire, Tiga, A-Trak, Chromeo, Grimes, Vice, American Apparel, etc.). What emerged from this local scene also quickly went global, spreading through the internet and merging with other hipster scenes, especially music blogs from 2004-2012 (Hype Machine, anyone?).

Soon, the scene merged with the mainstream market. This fusion was done primarily through stereotypical artists and brands that took the essence of the sound and culture, stripped away the nuances, and packaged it for retail in a popular but bland way. Meanwhile, the handful of artists and creatives who pioneered the original scene persisted and became fixtures in pop culture. To do so, they usually had to make enough compromises between the original movement and what was perceptible to the masses. This combination of determination and pragmatism is admirable because it has the greatest impact, thereby moving the culture forward the most.

So if you feel like the values ​​that got you into crypto are being diluted by the mainstream market — I hear that, but try to look at it from a different perspective — because the commercialization of crypto could mean that the real opportunity in terms of impact is just beginning. I’m going to try to write more concrete examples of what that opportunity might look like. I sketched this out in yesterday’s “only crypto”/”better with crypto” post, but there’s more to say.