Hail to the Degens, pioneers driving early adoption in the crypto industry
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Hail to the Degens, pioneers driving early adoption in the crypto industry
Without degens, we would never truly know how secure and scalable our infrastructure really is.
Navigating Web3 tides with focused insightsAuthor: Qiao Wang
Translation: TechFlow
A few months ago, I realized that in the world of crypto venture capital, "speculation" is the most frequently criticized idea—yet among crypto users, it's the most widely shared consensus.
I'm not talking about all crypto VCs, of course, but many of them are clearly disappointed with the current state of crypto, which is undeniably highly speculative. Some even treat it as a moral issue and openly mock the idea of speculation and those who engage in it.
I’m not sure where this condescending attitude comes from. I have some hypotheses. Maybe they come from upper-middle or upper-class families and never experienced financial stress during childhood, never had to hustle for money. Maybe they see their peers investing in artificial intelligence, nuclear fusion, and space, and feel unable to justify their own existence to themselves or their limited partners (LPs). Or perhaps they feel guilty for using degens as exit liquidity and are trying to rationalize their moral stance.
Whatever the reason, this attitude is either intellectually dishonest or entirely unfounded. Here’s why: “Degens” are synonymous with “early adopters.”
Crypto degens are fundamentally no different from early internet adopters who used the first email clients and bulletin boards before technologies like SSL were even developed. The only difference is that the internet was an information highway, while crypto is a financial highway. Therefore, it’s almost certain that the early adopters of cryptocurrency should be financial risk-takers willing to experiment with unproven products.
VCs want to see DeFi disrupt Wall Street. But who would be the first 100 users risking their hard-earned money on unproven financial protocols? Degens.
VCs want to see tokens drive global human progress. But who would be the first 100 people spending $1,000 on a Helium hotspot to earn volatile, illiquid tokens? Again, degens.
VCs want to see NFTs create new intellectual property capable of competing with Hollywood and Nintendo. But who were the first 100 buyers purchasing “useless” penguin NFTs before Pudgy World was ready for production? Once again, degens.
Would the average VC try these new things? No. They’re too risk-averse and face too high an opportunity cost.
So when you start mocking degens, you're actually mocking the first 100 users of the very system you philosophize about from your ivory tower.
In the early days of crypto, one of the most underappreciated outcomes of degen activity was that it helped test our blockchains, rollups, wallets, oracles, bridges, RPC nodes, and more. Without degens, we would have no idea how secure and scalable our infrastructure truly is. The fact that degens get hacked and pay exorbitant gas fees is precisely what drives our entire industry to focus on building safer, cheaper systems.
Now someone might say: “I get it—degens have done a lot for our industry—but now the whole sector has turned into a pure speculation casino.” I fully sympathize with this view. A world where the sole purpose of crypto is speculation isn’t the world I want to build. But the idea that speculation is the only use case for crypto is completely wrong.
This perception exists because speculation grabs all the attention. When a Nigerian teenager studying in Turkey uses USDT to send cross-border payments from home to his dorm room, nobody cares. Yet stories like this happen every day around the globe, growing at an incredible pace. I know this firsthand because I’ve spoken with around 50 revenue-generating, fast-growing crypto-native banks and remittance startups across Latin America, Africa, and Southeast Asia. According to Chainalysis’ latest report, India, Nigeria, and Vietnam are the top three countries in terms of crypto adoption. According to BH Digital’s latest report, $14 trillion worth of stablecoins settled on-chain in 2022—surpassing PayPal. I haven’t seen such strong product-market fit in crypto for a long time.
But here’s the thing: even stablecoins were driven by degens. One of the earliest use cases for USDT was arbitrage across exchanges, since stablecoin transfers settle orders of magnitude faster than fiat rails, significantly improving capital efficiency for arbitrageurs. One of the first use cases for DAI was leveraged trading—depositing ETH into Maker to mint DAI, then using it to buy more ETH. Without degens, stablecoin holders might never have reached critical mass, and we might still be searching today for crypto’s first non-speculative mainstream use case.
I enjoy being a degen on-chain. Partly because it satisfies my brain’s dopamine cravings. More importantly, it helps me intuitively understand the mindset of the first 100 users. But I also want to build an open, borderless, permissionless, transparent, composable, user-owned financial system and network. That’s why I got into crypto. These two visions aren’t contradictory. A decentralized utopia needs open-minded, risk-seeking, thrill-driven pioneers.
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