Author: Jocy, Founder of IOSG
I believe that everyone has seen many records of Consensus HK in the past two weeks. I will not repeat them. It can be summarized that most of them are disappointed with the industry and cannot see the prospect of breaking through, and think that it has reached a bear market. At the same time, that week was also a feast for P young players and KOL masters. The impact of the trip to Hong Kong on me was rationality. Those young players and masters who work harder than funds and entrepreneurs deserve so much, and they are surreal investors. They can always embellish every transaction with a perfect period. The trading principle of many P young players is 90% or BTC, and 10% active sol positions are always kept in PVP and sprint. No matter how much profit each time, they will execute such position configuration. Because of the meme wave and attention economy, this has become the most lively discussion in HK.
Kaito's victory has ushered in the golden age of KOLs, where attention is priced and can be quickly monetized. In sharp contrast, the entire Ethereum ecosystem is lifeless, with no one following the hollow idealistic horn. This is a heavy blow from reality. The so-called value investors are deeply trapped, and long-term holders are beginning to be short on Ethereum and are turning to Solana. Many people fail to see how hungry Ethereum entrepreneurs are (on the other hand, when a dev goes to L2/Ethereum to establish a connection, it takes an average of two weeks, while it usually takes less than two days to complete the connection, pull a group and start communication with the Sol Foundation). This seems to be deliberately done by the rulers of the crypto industry. In this small bull market cycle, long-term holders are not encouraged but short-term traders are given better returns. But in my opinion, this is a wake-up call for industry leaders such as Ethereum who are inactive or lack a sense of crisis.
Short-termism prevails: the collapse of industry values
At the same time, when everyone took off their disguises and wanted to make a fortune at the end of the bull market, many people began to lose their ideals/beliefs and became ruthless arbitrage tools. No one cared about the future of the industry. Everyone wanted to make the last money of this cycle. In order to support the price and chain of their own projects, exchanges can abandon the listing standards and list some projects they have invested in; the king-level projects regard tge as the last ATM, and market makers have become the ever-victorious generals of this cycle. Relying on BD and brand, they can always get chips for free and in the overall downward trend of VC coins, the average median size of mm can get a net income of nearly 40m; it seems that everything is moving from long-termism to short-term bubbles and speculation, and the practices of these people are having a more profound impact on some entrepreneurs who insist on building.
Such moments are very similar to those in 2018/2022. Practitioners leave because they see no hope and recognition in the industry. Everyone tries every possible way to survive in the bear market. It will be painful for teams that are still starting businesses and doing things. They need firmness and values all the time. Trump has affected the core values of the entire United States. After Trump token, the crypto industry has inspired huge nihilistic investmentism. When practitioners and speculators think this is a fast and short-term game, everyone also aims to take away as much cash as possible before the money game button is pressed.
To sum up the trip to Hong Kong, it was a major collapse of the industry and also a formal written trial of Ethereum. As the most successful entrepreneur in the industry, did he grasp the bow of the industry? Did he lead the industry towards nihilism?
Challenges and transformation of Ethereum ecosystem
TL;DR version: The founder of Denver infra is very bearish, but the founders of application and AI are both bullish.
The trip to Denver still saw many shocking scenes. Some of the founders and developers who had built their projects steadily for many years were suddenly told that the Qing Dynasty was going to fall. They chose not to believe it. It seemed that the Ethereum ecosystem had always had a culture of taking care of everything. They raised funds smoothly all the way, and saw many projects that were not as good as theirs perform well in the speculative market of tokens. They may never have thought that one day they would not be able to raise money and their own coins would return to zero like other air coins. When there were only 6 to 9 months left in the runway, they slowly realized that they had to really make a product with income and user base, and began to seriously think about what the problem of Ethereum was. Of course, it is never too late, but for them, they need to make drastic layoffs and completely deny their past selves. This is a huge challenge for the founder, because he is just betting on an uncertain direction, but he has to risk his entire fortune for this. According to incomplete statistics, the financing amount of projects that are deeply cultivated and built on the Ethereum and EVM ecosystems exceeds hundreds of billions of US dollars, and their overall primary and secondary market valuations add up to more than one trillion US dollars. Therefore, the question facing these projects is, should they stay in Ethereum or leave? As strong as Lido founder Konstantin, when he announced on Twitter that he would establish a second Ethereum Foundation, he instantly received DMs from hundreds of founders of Ethereum ecosystem DeFi (including Uniswap). Of course, this is still very challenging for consensus.
I also saw a wave of Ethereum ecosystem entrepreneurs. In the past, they have always been the backbone of the industry's technical faction. The technical products and solutions they have made have always been widely adopted. Whether it is TEE/zkTLS/rollup, they are the only one. But these people are tired of providing solutions for technical protocols that have no end users and needs, which cannot bring them real entrepreneurial fun. What excites them now are the exciting new papers in the field of AI research. To be honest, there are quite a few such founders, and they are the few founders who can really dig deep in the industry and make feasible solutions. If a large number of such founders choose to leave, I think the impact on the entire Ethereum infrastructure will at least set back three to five years.
The magical power of the fusion of AI and Web3
At first, everyone was saying that Denver infra had no hot spots and no vitality, but as we talked about 3 to 4 new AI*Web3 projects on average every day, we saw the Ethereum community's active embrace of emerging technologies such as AI, as well as innovative attempts in areas such as DeTraning/Inference/DePIN. Ethereum is actively adapting to new technological trends and exploring new application scenarios. Capital and entrepreneurs have become the industry's prophets. Paradigm led the investment in Web3 LLM company Nous research with a valuation of $1 billion. Groq, as an Inference, has generated more than $1 billion in revenue in the past year. Openmind and Yushu Technology have made RobotAI. DePAI's open source products have debuted in Denver. Hyperbolic has also become one of the inference networks with the highest integration support among web3 developers. There are also open source Intelligence platforms such as Open Gradient and Pluralis. At Ethereum conferences such as Denver, smart developers and founders have begun to fully help Web3 embrace AI. Everyone is Brainstorming how to make AI agents and more applications appear in Web3 scenarios. The industry never ends or stops, and research and curiosity will always drive builders further and further.
Openmind and Yushu Technology jointly created RobotAI, and DePAI's open source product was unveiled in Denver
Macroeconomic favorable conditions are gradually released, and Crypto keeps pace with the times
However, after dealing with most of the US institutions, the situation is completely different from that in Asia. Everyone is very optimistic about the loose environment of the crypto bull market. The US bank's policy on accepting crypto asset custody has been passed, and banks will soon gradually allow BTC/ETH to be mortgaged, and even expand to mining equipment. Here we can see a clear trend that the crypto interest rate reduction environment is about to take shape. The original 10% lending rate in the industry can be adjusted to about 3-4%, and even Japan can reach negative interest rates, which will bring liquidity back to the industry. In addition, we have recently seen favorable crypto policies in the United States. Uniswap and Coinbase are considering designing a tokenized securities model so that traditional industry investors can better evaluate and purchase tokens. The benefits of regulatory release will far exceed our imagination in this cycle, so I am very optimistic that the market will usher in a very good macro environment in the next two years. Many people say that this round of bull market is over, but I don't think so. Each round of bull market not only has the cooperation of the macro market, but also the self-innovation and new applications of the crypto endogenous market. We haven't seen real innovation in this round of cycle. If there is no innovation, it will be a false bull market. In the next two years, we can expect more traditional companies/even national governments to enter the L2 network and issue their own decentralized networks. The prosperity of L2 business will once again drive the growth and value capture of Ethereum L1.
Restructuring Ethereum Governance: Towards Mainstreaming and Commercialization
On the third day in Denver, I attended the Pragma held by ETHGlobal and met several core EF developers, who revealed the upcoming new organizational structure adjustment of Ethereum. The more interesting one here is @dannyryan, whose reputation and popularity in the Ethereum core developer circle in the past are obvious to all. The newly established @Etherealize will also shoulder the mission of the new era Consensys to help Ethereum move towards the mainstream world and commercialization; in addition, the two Co-EDs of the foundation, Hsiao-Wei @hwwonx, have also been deeply involved in Ethereum for many years and have followed Vitalik to fight north and south since 2016 (see the picture of the 2019 Ethereum hackathon selection day in Beijing, the one sitting next to Vitalik is him), and Tomasz @tkstanczak, as the founder of Nethermind, is very familiar with the entire Ethereum ecological project, and as a third-party dev shop, they are well versed in more sustainable survival business logic, which can help Ethereum find a balance between infra and commercialization paths.
The picture shows the 2019 Ethereum hackathon selection day in Beijing. The person sitting next to Vitalik is Co-EDs Hsiao-Wei @hwwonx
In fact, the problem Vitalik encountered is the same as that of all entrepreneurs. The team is too big and it is difficult to lead. Friends who know how to study personal characteristics can try to analyze V God's mental journey. From the Twitter avatar of Milady emoji to the disappointment with crypto OG, he changed to the half-man, half-bird image of Druid in World of Warcraft, which also represents his inner reconciliation with the community's voice. On the second day, he officially announced the new team structure of Ethereum. Ethereum may be the first truly decentralized organization and economy in history. We should be more tolerant of this man who has just turned thirty. He does not have a particularly outstanding performance in organizational structure management and Ethereum application commercialization, but who can lead this organization to create more glory and results? Perhaps Ethereum can also learn from Elon Musk to create a DOGE Discipline Inspection Commission, which is responsible for the elimination of some irresponsible devs and virtual positions. How to measure the contribution value and KPI is an important issue facing V God. In addition, give internal core developers clearer value propositions and development needs, and give the management team more specific roadmaps and management time limit requirements, so that Ethereum can better return to the community and democratic governance. As the cornerstone of Web3, Ethereum is also actively exploring Layer2 solutions and technology upgrades to meet the growing application needs.
There has never been a savior, Vitalik needs to encourage more application entrepreneurs
Is technology research and development so important to Ethereum? Maybe it was important in 2017, 2020, or 2022, but applications should be more important than technology now. The next most important milestone for Ethereum and the greatest confidence for ecosystem builders will be whether Ethereum, as the world's computer, can produce a cross-era super application product.
Many people regard Vitalik as the savior of Ethereum. Ethereum is the savior of the industry, but there has never been a savior. Everyone should be a savior. I called for all organizations that have accumulated good capital and stable business income in this industry to contribute to the future of this industry. They can donate to some open source organizations of Ethereum and create better opportunities for young people in the industry. In addition to using Grants to support, many entrepreneurs still need financing support. In this wave of bloodbath of industry altcoins, it also dealt a heavy blow to the already shaky Asian funds. Many funds began to shut down or transform into secondary funds. The entrepreneurial environment in Asia is difficult. If Asian institutions lose VC investment, the industry will be even weaker. Here I still call for the support of early venture capital in the ecological organization of Ethereum. It is recommended that all exchanges can take out 1-2% of their income each year to support the development and innovation of the Ethereum open source ecosystem.
Will Ethereum die in the next bull-bear cycle? I think not. This is the most successful decentralized organization in the Web3 industry. We should not let it fail. Its failure means that hundreds of billions to trillions of talents and project assets built on the Ethereum business empire will need to start over. The entire industry will fall into a major setback of 5 to 10 years, which means that many OGs will leave.
Please be reluctant to sell your Ethereum. If you use a 10-year dimension and look back at what happened from 2020 to 2030 in 2030, you may find that the doubts and noise in 2025 were actually insignificant. How to judge value and innovation in a 10-year dimension is a priority worth thinking about.
Optimists are often right. The more difficult and ups and downs the stage is, the more we should maintain confidence and optimism.
