After watching the a16z partner's speech: Is Crypto a Sisyphean rebellion?
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After watching the a16z partner's speech: Is Crypto a Sisyphean rebellion?
The night before dawn is always the darkest.
Navigating Web3 tides with focused insightsAuthor: Zeke, YBB Capital Researcher
Introduction
This article reflects my thoughts after watching a talk by a16z partner Chris Dixon on the topic "Is Web 3.0 Dead?" As an idealistic tech investor, Chris reviewed the evolution of the internet since the 1990s and concluded that crypto still holds immense potential. However, from today's perspective, I see internal chaos within Web3. This piece summarizes my recent reflections on crypto and extends ideas from my previous articles.
I. The Gambler’s Demand vs. the Hacker’s Vision
In his speech, Chris Dixon pointed out two dominant cultures in crypto: one speculative, resembling a “casino culture,” and the other focused on technological progress—the “computer culture.” I refer to them simply as “gambler culture” and “hacker culture.” These seemingly opposing forces have been united by a shared element: vision. It was this common vision that propelled crypto into the mainstream. Since Bitcoin, crypto’s ambitions have been grand—from a decentralized peer-to-peer payment system independent of individuals, institutions, or governments, to Vitalik’s idea of a “world computer,” permanent decentralized storage, reimagined IoT… On a smaller scale, there’s even my personal favorite: the 10k PFP projects—IPs co-created and pushed forward by thousands of community members. Unfortunately, most of these visions remain unfulfilled. “Cash” became “digital gold,” the dream of a “world computer” clashes with reality, and my favorite narrative has devolved into an inside joke among insiders. The gambler’s demand and the hacker’s vision won’t intersect forever. Once a gap emerges, decentralization, vision, and mission cease to matter. Much like Maslow’s hierarchy of needs, human motivations follow a sequence—from basic physiological needs to self-actualization. For most mainstream crypto users, the fundamental need is profit. When technological narratives fail, users flock to where the noise is loudest: battling in MEMEs; tapping to earn on Ton; or if all else fails, seeking liquidity in A-shares or U.S. equities. In reality, our attention has shifted from technical storytelling to Powell, ETFs, Trump, and whatever Western meme trends are hot today. Sometimes I wonder—aren’t these blonde-haired, blue-eyed figures the long-lost Satoshi Nakamoto? Still, it’s only natural for people to think about ideals after filling their stomachs.
The current consensus in the space often emphasizes moving beyond technical narratives, seeking new user growth, improving user experience, building consumer-grade applications, and focusing on high-performance heterogeneous chains. This consensus aims to realign gamblers and hackers. If successful, we’ll enter a new era of diversification, with both groups contributing to reshaping the internet. If not, we may revert to the original P2P vision and return to financial fundamentals (though I doubt this alone can sustain blockchain’s future growth). Regardless of which path we take, what matters most is meeting the value needs of ordinary users—providing real motivation. We often hear the term “falsification,” usually justified by token prices going to zero or high entry barriers. But let’s ask differently: where is the driving force? Last year, I wrote an article about decentralized AI computing power—a topic with very limited available information at the time. Yet I was deeply confident in its future, dedicating two chapters to exploring its potential. With GPT’s continuous updates and NVIDIA’s soaring stock price this year, AI has become a recurring hype. Today, compute-focused projects are no longer novel, but unfortunately, most lack any real incentive for users to adopt them. Even under suboptimal efficiency, they struggle to offer stability, low overhead, or affordability. Compared to most Telegram mini-games today, they differ little beyond appearances—both ultimately wait for exchange listings to exit liquidity. The only thing left to discuss remains the vision.
In today’s world where generative AI permeates every industry, Web3 struggles to excite gamblers due to its lack of intrinsic motivation. Ponzi schemes thrive on human greed; consumer applications thrive on value—emotional or practical. You must offer *some* value. A solid app, within crypto, could be evergreen DeFi protocols fulfilling users’ trading, arbitrage, and strategic gaming needs. Outside crypto, consider early ChatGPT: cumbersome payments, long queues, IP blocks, account bans—yet people rushed in regardless. Similarly, during the 2021 liquidity boom, twelve-word mnemonics couldn’t stop retail investors from chasing shitcoins. Same principle, different drivers. Entry barriers and UX do matter to average users—but less than dopamine and utility. After solving abstraction issues and lowering barriers, what will drive non-Web3 users to engage? For a non-speculative Web2 user, Web3 currently offers almost no practical utility beyond transfers and payments. So where will the imagined user growth come from?
II. Why Don’t We Talk About Decentralization Anymore?
I know temporary popularity doesn’t mean centralized heterogeneous chains are right in the long run. But judging solely by this cycle’s altcoin market frenzy, heterogeneous chains are gaining so much momentum they’re nearly drowning out Ethereum. Criticism of Ethereum has grown so intense that even Vitalik has called for realignment across its fragmented ecosystem. Across multiple dimensions, Ethereum remains the Apple of Web3—largest ecosystem, highest TVL, second only to Bitcoin in decentralization and security. But today, it resembles more the Apple Steve Jobs handed over to Tim Cook—less cool, no longer celebrated for innovation. At least for now, decentralized public chains no longer equate directly with success.
From a technological development standpoint, decentralization and security should be rare qualities built over long periods—like gold, impossible to artificially replicate. Yet Vitalik and Mustafa Al-Bassam have already conceptualized how to reproduce them. Today, decentralization resembles lab-grown diamonds from Zhengzhou: from top-tier Ethereum to cost-effective Near DA, dozens of vendors now sell it. Will Ton or Solana eventually become Layer2s? I believe yes—though due to factional reasons, neither can operate as an L2 on Ethereum. But it’s not just Ethereum experiencing massive spillover of decentralization and security. Bitcoin surpasses Ethereum in security, decentralization, social consensus, and recognition of its consensus mechanism—and BTC has no factions. Even under a 1:1 fork model, if sufficiently native DA solutions emerge in the future, could Ethereum’s proudest assets—decentralization and security—become bullets fired back at itself? How will Ethereum defenders criticize heterogeneous chains built atop BTC?
From the ZK technology perspective, if we can have ZK Rollups upward, we can also develop coprocessors, ZKML, and more downward. As off-chain computation for high-performance apps matures, achieving balance among scalability, decentralization, and security on Layer1 may not be entirely impossible. Thus, setting aside the old trilemma debate, prioritizing ecosystem and experience first isn't unreasonable.
III. Is Web3 Repeating Web2’s Path?
Tokenomics is always an interesting topic. We’ve seen countless complex economic designs, yet long-term success through tokenomics is mostly limited to service-oriented projects—CEXs, Layer1s, various DeFi protocols. The simplest reason? Real demand and revenue exist primarily around these projects. From infancy to today’s mainstream era, tokens played a crucial intermediary role in helping these projects and communities grow into giants. Positive feedback loops deepened their moats. On the flip side, many 10k PFP projects in 2022 tried staking and token burning to save themselves when near death—but without strong underlying demand, reducing supply meant nothing.
Another persistent problem with token incentives is Sybil attacks. Sybils are the bane of token design, causing many grassroots-driven projects to collapse. Previously, KYC was the only semi-effective solution—centralized platforms and compliant projects could somewhat avoid Sybils using KYC. But for pure on-chain projects, the issue is far more complicated. Although Vitalik proposed SBTs (Soulbound Tokens) akin to World of Warcraft’s soulbound items, clear logical flaws remain. Using iris scans like Worldcoin is even less practical. Today, the most effective anti-Sybil method has shifted to Points systems. While Sybils can generate countless addresses and spam transactions, money cannot be forged—just like PoW hashpower. If you can’t fake spending, then address count becomes irrelevant; simply set deposit size as the maximum or sole weight in Point allocation. This benefits project teams greatly—Points represent soft commitments, with final control retained by the team. But for Web3’s development, this trend leads us in a worse direction. Only whales benefit from such activities—not genuine users, nor those outside Web3. After the token ends, all that remains is wreckage.
Fixing one problem while creating another is common in this space. So why not ditch tokens altogether? Earlier this year, I repeatedly praised tokenless projects for outperforming most competitors across multiple metrics. They avoid dying from Ponzi dynamics and sidestep issues like Sybils, token price volatility, and utility debates. By focusing resources on marketing and ecosystem growth, they precisely attract value-driven users and expand their ecosystems.
But here’s what troubles me: does this become Web2-like? Web3 oligarchs like Base provide excellent services and profit continuously, yet communities cannot share in the upside. How is this different from today’s Web2? Coinbase single-handedly controls everything from construction to deployment, even developing flagship protocol Farcaster internally—while pushing out Friend.tech. Is this truly embodying decentralization? We must admit our trajectory increasingly mirrors Web2. The 1990s internet vision was to return rights and wealth to users. In Web 1.0, media was controlled by TV and radio stations; in Web 2.0, by Nasdaq’s seven tech giants. Now, Web3.0’s oligarchs are testing boundaries. Are bottom-up success stories ending? I don’t know. But I’m certain—we’re standing at a crossroads.
IV. Scarcity is a Double-Edged Sword
Prior to the collapse of the Bretton Woods system, gold played a key role in human monetary history. It had one great advantage: scarcity. And one fatal flaw: scarcity. From seashells to gold, decentralized money has existed throughout history. Before humanity entered the steam age, scarcity protected people from arbitrary wealth confiscation by dictators, enabling societal stability. But during periods of rapid technological advancement, scarcity hinders humanity’s journey to the stars. Former U.S. President George W. Bush once said in a 2002 speech: “Of all the gifts of history, the most precious is not dazzling technology, nor the masterpieces of great thinkers, nor politicians' eloquent speeches—but the taming of rulers, the realization of locking them in cages. That is exactly what I am doing now—speaking to you from inside the cage.” Locking power in cages is humanity’s only way to embrace fiat currency. Money unbacked by precious metals is undoubtedly the largest Ponzi scheme in human history—but it has contributed immensely to modern society.
Scarcity is both a feature and the source of value in blockchains. We constantly emphasize its importance. Yet sometimes I wonder—does excessive scarcity hinder our progress? For example, if Bitcoin had emerged in an isolated country, could its vision have been realized quickly? The 10k PFP phenomenon serves as an even better microcosm. Bored Ape, Azuki, Pudgy—all highly successful NFT projects. To be precise, at least the first two were successful in the past. At critical junctures, they chose divergent paths: games, animation, merchandise. The latter’s pragmatic approach allowed it to turn the tide. Yet creating games, animations, or even entire IP universes feels incredibly cool to me—but scarcity ensures such endeavors cannot succeed. As I mentioned when discussing GameFi, the cost of developing a AAA game is unimaginable. Fixed-supply NFTs exclude participants; de facto NFT inflation exploits the community. This mirrors a dictator’s economic control—community influence is far weaker than perceived. Ultimately, both Bored Ape and Azuki collapsed under the weight of endlessly inflating sub-series. Looking back, I feel a sense of acceptance.
Of course, the other edge of this sword is evident on Ethereum—a topic we covered in depth in a prior article, so I won’t elaborate here. Returning to the core question: when a decentralized project grows massive and enters the mainstream, how should it handle deflation and inflation? Should it rely solely on simple code rules, decisions made by a handful of core developers, or charismatic leaders? Oh right—we also have governance tokens. But governance tokens are meaningless until the Sybil problem is solved. Democratic voting cannot truly reflect community will when a16z can use just a few wallets to override broad community support. What’s the point of voting then?
V. Business Logic Cannot Close the Loop
While writing the Babylon research report, I asked myself: how many projects in Web3 actually achieve closed-loop business logic? I believe at least 95% fail. In most cases, closure exists only in whitepapers. People design perfect basins—but when asked where the water comes from, they turn overly idealistic. Ideally, Babylon and Eigenlayer could mobilize Bitcoin’s dormant wallets and Ethereum’s staked tokens, eliminating LST bubbles and providing security for long-tail chains, protocols, and new projects. At the time, I found this vision inspiring. But one doubt shattered my illusion: to attract BTC whales en masse, how much annual yield must be paid to secure trillions in assets? How much of that pool can long-tail projects actually rent? And where will the funding gap come from? Probably, again, tokens.
This issue permeates every corner of Web3. Even today’s trending Ton-based mini-games face the same fate. Top projects like Catizen will soon prove whether they have real paying users post-airdrop. Most other mini-games will quickly die out—it’s inevitable. In many African and Asian countries, crypto is beginning to shine in payments and remittances. A significant portion of Ton’s user base comes from these regions. My hope is that based on these users’ real needs, the next giant might emerge from Mini Apps.
VI. The Story Shouldn’t End on Wall Street
Nietzsche said: “There are no facts, only interpretations.” My view stems from pragmatism; idealists might disagree. But I believe neither of us is wrong. After all, there is no absolute truth—we must learn to see new perspectives through differing views. Embracing “opposition” brings us closer to truth than clinging to singular beliefs. Every project I support is one I genuinely love. And between the two camps, there’s at least one shared belief: we want Web3 to stand alongside generative AI in advancing human progress. Crypto’s story shouldn’t end on Wall Street.
VII. Sisyphus
When choosing a title for this article, I thought of a fitting Greek mythological figure: Sisyphus. In the *Iliad*, Sisyphus was famed for his cunning intelligence, which he used to accumulate great wealth. Whenever he sensed Death approaching, he would trick Death into wearing handcuffs, leaving no one able to enter the underworld. As divine punishment, he was condemned to roll a boulder up a steep mountain—an endless, futile task. Each time he neared the summit, the stone slipped from his grasp, forcing him to start over. In Western culture, “Sisyphean” describes a never-ending, laborious effort. But in Camus’ philosophical essay *The Myth of Sisyphus*, Sisyphus’ relentless climb symbolizes human optimism and resistance. The duality of this myth—futility versus perseverance—mirrors Web3’s current state perfectly. The darkest hour is always before dawn.
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