Stick to the Web 3.0 dream and don’t become Fintech 2.0

Don't go to Fintech 2.0

Crypto is doing payment, Fintech is doing stable currency.

In the past year, the development of the cryptocurrency industry has been a two-way run with traditional financial companies, Web 2.0 giants and global politicians. Trump's air coin is the end of crypto liquidity, and peace has just begun.

Pakistan's consultants, Bhutan's crypto mines and the sky-high financing in the Middle East have finally become the last straw that overwhelmed retail investors. Then go to the wishing well and be cuckolds, maybe you can still get some love.

The Age of Crypto Stagnation

Humans are very strange creatures. They used to pursue freedom when they were traditional, and now they pursue tradition when they are free.

The only lesson humans have learned is that they can’t learn any lessons.

I still remember that when the Bitcoin Spot ETF was passed, everyone thought that Bitcoin would change the world. Of course, now everyone thinks that Bitcoin is just a mapped asset of M2. It can neither reduce inflation nor preserve value. After being removed from the ETF, it cannot serve as a fuel for the engine of the bull market in the currency circle. One-track mind has become a double blockage.

The only lesson humans have learned is that they can’t learn any lessons +1.

When Trump descended on his loyal cryptocurrency circle with air coins, the silence after the surge was not surprising. PumpFun’s self-rescue, Binance Wallet’s attack, or whether Boop is Binance CXO or not have all become farces themselves, and they still can’t make money.

There is nothing new under the sun, and there is only stagnation in cryptocurrency.

First, Ethereum, an "innovation at the level of human civilization", could not withstand the decline from 4,000 to 1,500, and had to use Risc-V to return to the L1 battle. If EVM can be transformed, it is better to change PoS to PoW in one step. Can Ethereum's bet on L1 and the newly added Risc-V really save itself?

Being commanded by the enemy is the most stupid behavior. Unfortunately, Solana is the commander this time. Solana bet on L1 before and after FTX.

In essence, SVM L2 or the extension layer is also a bloodsucking behavior for Solana, a carp on the whale, not intentionally by the whale, but ETH L2 is a barnacle on Ethereum, and Ethereum has invited it.

The market paradigm we used to be familiar with is gone forever, ETH is not Money, Stablecoin is Money.

Secondly, invalid information is infecting the entire market. KOL Summer will quickly become KOL Agency Summer, and then CEX Summer. If you don’t believe it, take a look at the grand occasion of this Dubai Music Festival. Project parties, KOLs and exchanges are ultimately transaction-oriented. The exchange itself is the receiving point of transaction behavior. This is an unsolvable situation.

This is not a criticism of KOL, but a recognition of market rules. From the earliest three o'clock community AMA, the community-based Bihu, to the past of the thousand-media war, the peak of KOL's popularity is also the end. Guiding transactions is the moment of clearing trust and influence.

However, there are also new differentiation trends in this cycle. Although they are all invalid information, they are generally divided into two categories:

1. 1. Garbage orders and sinking markets

2. 2. Old money platforms and propaganda of existence

Once again, it is the collapse and persistence of VC. Relying on US dollar capital, Silicon Valley, Middle East and European VCs are all planning for the next stage, while the lonely Chinese VCs are constantly tortured by LPs and ROI. They have nothing to do with innovation and are rapidly becoming market makers. Anyway, they all lead to transactions, so it is better to save steps and do it yourself.

Real innovation was in Huaqing Jiayuan in the past, and will be in Shenzhen Science Park in the future. Chinese founders have to find money in Silicon Valley and Wall Street, but projects that truly meet the next stage of the market will not be recognized by investors according to the existing framework.

The currency circle does not need FA, and Meme cannot be shorted.

The reason is simple. The transaction path is too short. The exchange is eyeing it covetously, staring at any traffic. It would rather waste the net than miss the wind. The only beneficiary has become the former big factory'er who escaped from the Internet to CEX. Not only ByteDance is beating, but also the troughs of cattle and horses.

In 2018, the average working time of Toutiao was only 4 months, while in 2024, the average working time of ByteDance has risen to 7-8 months, but more people will still be sent to society. The big companies in the cryptocurrency circle only look at the top CEX.

Today's violent theory: VC beneficiaries are students from top schools, and CEX beneficiaries are eliminated by big companies. They bring not only professionalism and beautiful resumes, but also more hierarchical and in-depth operating standards, as well as the decline in capital efficiency after the increase in intermediary costs.

The era and people in the cryptocurrency circle, where everything was thriving and everything was focused on making money, are gone forever.

Continuous institutionalization has become a curse for the cryptocurrency industry. The cryptocurrency industry is more like the Internet, and the Internet is more like XXX.

Invention is the mother of demand

I don't FUD cryptocurrency. A more accurate mentality is "Confidence in the crypto industry, but worry about my future". This is no longer a niche industry full of opportunities to get rich quickly. Practitioners are being replaced by the Internet and financial industries. Crypto OGs and local promoters will either go to jail, or become younger brothers, or go to jail and become younger brothers of big bosses. Baby will fight tigers tonight.

Complain too much and you will break your heart. We should not continue to discuss VC and exchanges. We should either start from scratch like Ethereum or explore a new ecosystem. In every crisis in the crypto industry, new asset issuance methods will be born, such as ERC-20 supporting DeFi, NFT supporting BAYC, and now we have come to the stablecoin stage.

Please note that the core of the last round of on-chain activities was Ethereum and lending, the "Lego-style" amplification of capital efficiency, while the current round of Ethereum and pledge mode did not replicate the miracle. In our timeline, Tencent did not invent WeChat, but Xiaomi Mi Chat rose.

Interest-bearing stablecoins (YBS) have become a new invention, and they will create new demands, not because everyone's demand for stablecoins cannot be met, and USDT is alive and well, but because YBS can be done this way, Ethena was invented.

YBS will become a new form of asset issuance. This is an expectation. Following the psychological history, I have three predictions for the future, pointing to different futures:

1. 1. YBS becomes a new way of asset issuance, and Ethereum successfully changes its "core".ETH replaces BTC as the new encryption engine, and Restaking ETH becomes real Money;

2. 2. YBS becomes a new way of asset issuance, and Ethereum falls into silence. YBS will be swallowed up by US dollar assets such as national debt, Fintech 2.0 will come true, and Web 3.0 will become a pipe dream;

3. 3. YBS will not become a new way of issuing assets, and Ethereum will die silently. Then the blockchain will "de-coin and store the chain", Fintech 1.0 is Paypal's replacement for banks, Stripe is an electronic innovation in acquiring, and the coinless blockchain is at most Fintech 1.5.

To sum up, Fintech 2.0 is a financial blockchain, and Fintech 1.5 is a coinless blockchain technology.

Stablecoins are becoming a new asset issuance model, which is something that no VC research report has ever predicted, and even Ethena itself has never thought about it. If we believe that the market itself is the optimal solution, the biggest problem for VCs and exchanges is not to learn from Vitalik and indulge in technical narratives, but to not respect market laws.

In the existing currency circle, exchanges, stablecoins and public chains are actually the three dominant players. Binance, USDT and Ethereum constitute the protagonists, and the others are suppliers and distribution channels around the three. Exchanges and public chains are relatively stable. Now the war is focused on stablecoins. Not only USDC, BlackRock, etc. are advancing, but the answer given on the chain is YBS, which is related to the overall situation and has no shirking responsibility.

PS, exchange stability refers to the dominance of Binance, and public chain stability refers to the revitalization of Ethereum, and Solana’s replacement is still on the way.

In today's market structure, Ethereum and Tron are the only two dominant players, but Solana has not given up catching up, especially Ethereum has not been completely defeated. We always hear about Solana DEX The news that the transaction volume has surpassed the Ethereum ecosystem, but in terms of the actual asset issuance, ETH+ERC-20 USDT still ranks first.

This is also the main reason why I think there is no problem with the fundamentals of Ethereum. Everyone expects the price of ETH to be 10,000, and the expectation for SOL is 1,000, which is completely different.

Especially by comparing the growth rates of each chain, we can find that they are basically in the same frequency. Except for Solana which is close to death in 2022, the rest of the time everyone is consistent with Ethereum. We can believe that in terms of correlation, the stablecoins of each chain have not developed an independent market trend and are still an overflow of Ethereum.

Accordingly, the importance of pairing Ethereum and stablecoins is explained, and the importance of YBS lies in anchor exchange. With a stablecoin market value of 230 billion, USDe and YBS are still just others.

Again, YBS must become a new way of issuing assets in order to transmit the asset attributes of ETH to the monetary level, otherwise, the spring of RWA will be the winter of the currency circle.

Conclusion

Ethereum only has technical narratives, and users only embrace stablecoins.

We hope that users will embrace YBS, not USDT. This is the current situation and the difference between us and the market.

It is very common to pursue niche, just look at the through-type taillights and LABUBU all over the world. Let me briefly mention blockchain payment. There is nothing wrong with payment, but before YBS supported by crypto-native assets becomes mainstream, pushing blockchain payment is "the result is earlier than the cause", that is, payment should be the direction of YBS.

Cryptocurrency should not become Fintech 2.0, the road cannot become narrower and narrower.