The Degenerate Age of Native Cryptocurrency
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The Degenerate Age of Native Cryptocurrency
We need a native on-chain stablecoin, de-financialization, and the next wave—we don't want to live in a Web3 that just sells traffic.
Navigating Web3 tides with focused insightsAuthor: YBB Capital Researcher Zeke
1. Bowing to Compliance
How did crypto move from niche to mainstream? Over the past decade, decentralized blockchain provided a regulatory wilderness for the world. Satoshi's peer-to-peer electronic cash system didn't succeed, but it opened the door to a parallel universe. Law, government, society, and even religion could not constrain this internet existing across countless nodes.
Operating outside regulation was almost the sole driver of the industry’s success—every development from ICO-based asset issuance and its endless variations, to UNI-fueled DeFi, and today’s so-called super-app stablecoins, was built upon this very foundation. Only by removing the frictions of TradFi did this industry reach where it is today.
Ironically, after the failed exploration of a new continent during the digital gold rush era, people have started abandoning sailboats and returning to the old world. Perhaps since the approval of BTC ETFs, or maybe since Trump’s election victory, native crypto has entered its degenerate age. The industry now seeks compliance and aims to fulfill TradFi demands. Stablecoins, RWA, and payments are becoming the mainstream drivers of progress. Beyond that, we’re left only with pure asset issuance—a picture, a story, a CA address—as daily conversation topics. "Dirt dog chains" are no longer a derogatory term.
How did we get here? I’ve analyzed this extensively in articles over the past two years, but ultimately, blockchain still lacks effective mechanisms to curb malicious behavior behind addresses. We can only ensure honest nodes and intermediary-free DeFi. Beyond that, we cannot prevent anything from happening in this dark forest. Many things fading into obscurity is simply inevitable. NFT, GameFi, SocialFi—all heavily rely on real-world entities behind projects. Blockchain excels at fundraising, but who ensures these teams use funds responsibly and turn narratives into real products?
The vision of non-financialization cannot be achieved merely by improving infrastructure performance. If centralized servers fail at these tasks, how can we expect blockchains to succeed? We cannot implement proof-of-work on project teams. Now, bowing to compliance might mark the beginning of future non-financialization—an ironic yet unavoidable reality.
Crypto is indeed becoming a subset of tradition. Control over this ledger is being taken by the establishment. Bottom-up innovation is dwindling, opportunities shrinking—we are entering an era of on-chain hegemony.
2. Stablecoins
What is on-chain hegemony? I see it from two angles: first, stablecoins; second, the repetition of traditional internet narratives.
Let’s start with the former. Today’s stablecoin landscape is dominated by fiat-backed stablecoins and yield-bearing stablecoins (YBS). Recently, a major event occurred regarding fiat-backed stablecoins—the passage of the "Genius Act." Here's a brief summary:
Definition and Issuance Restrictions: Defines “payment stablecoins” as digital assets used for payment or settlement, which must be 1:1 backed by USD or high-liquidity assets (e.g., short-term Treasuries).
Only licensed issuers (registered and regulated) may legally issue stablecoins. Unauthorized individuals or entities are prohibited from issuing.
Reserve and Transparency Requirements: Issuers must hold reserve assets equivalent in value to issued stablecoins (e.g., USD or high-quality liquid assets) to ensure stability and solvency.
Regular public disclosure of reserves is required. Issuers with market caps exceeding $50 billion must undergo annual financial audits and comply with anti-money laundering (AML) and counter-terrorism financing (CFT) regulations.
Regulation and Compliance: Establishes a clear regulatory framework. Stablecoins are not considered securities and fall under banking-style regulation rather than SEC oversight.
Licensing procedures regulate issuing institutions, enforcing AML, asset freezing, and destruction mechanisms.
Promoting Innovation and Financial Inclusion: Aims to foster stablecoin industry growth in the U.S. through a clear legal framework, enhance financial inclusion, and maintain the dollar’s dominance in the digital economy.
Restricting Big Tech: Prohibits large technology companies from issuing stablecoins without regulatory approval, preventing market monopolization.
The long-standing fear of a Tether collapse has finally become obsolete. Mainstream adoption of downstream payments is now just a matter of time. Blockchain mass adoption is finally getting on track. But what will stablecoins look like under regulatory frameworks? How will other countries respond to such moves? Why stablecoins succeeded hardly needs reiteration.
The passage of this act means the U.S. has formally taken control of on-chain transaction mediums. American private enterprises enjoy Treasury yield benefits, and with monetary control comes immense power over the chain. Without even discussing the extension of dollar hegemony, how should one imagine a scenario where all stablecoins in a DeFi protocol are suddenly frozen?
On the other hand, there's YBS stablecoins. Ethena’s concept was promising—offering UST-level yields during bull markets while achieving far greater stability than algorithmic stablecoins. As mentioned in my previous articles, native on-chain stablecoins might eventually emerge via delta-neutral hedging strategies, such as the more complex f(x)Protocol, or Resolv hedging on Hyperliquid. Yet curiously, everyone is now rushing into YBS stablecoins—first traditional hedge funds, then market makers like DWF, and now exchanges want a piece too. They may never become another Tether, but they’re determined to grab a slice of ENA’s pie. This ideal spreads virally.
This pathological YBS stablecoin frenzy has clearly deviated from its original purpose. Using initial capital and increasingly aggressive strategies to seize market share brutally suppresses genuinely innovative projects. Barriers for startups keep rising. Indeed, technical brilliance and ingenuity no longer matter—decentralization itself is irrelevant. Innovative projects like f(x)Protocol receive little attention. Now, the winning formula is CEXs combined with elite quant teams. In this war, APY and convenience rule everything.
While preferable to losing ETH for some random image or bizarre narrative, the fact that YBS stablecoins represent the sole innovation this cycle reflects that most prior paths were wrong.
3. Asset Issuance
Public blockchains are the largest platforms for asset issuance. ICOs marked the beginning of this game. Everything since has been a variant. At least earlier forms spurred new narratives and pushed industry progress forward—but now everything is converging toward traditional internet models. Base and Pump’s profit models are nearly indistinguishable from Web2, offering almost zero backflow to communities—falling short even compared to CEXs. Web3 was meant to democratize everything, enabling co-creation and shared prosperity, but the meaning has twisted. That’s just the first point. Now every oligarch is studying how to build asset issuance platforms—what constitutes innovative asset issuance?
Launchpads are now the only fertile ground where native crypto users can get rich, yet they too are diseased. Beyond paying fees to platforms and GMGN-like tools, participants endure experiences akin to trench warfare. Asset issuance has become recursive, even evolving off-chain. Fine—while NFTs and GameFi weren’t fully decentralized either, at least they involved on-chain components, drove infra development, and brought the industry into broader awareness.
Since early this year, completely off-chain projects can now issue tokens—even functioning themselves as off-chain issuance platforms. Extreme speculation continuously lowers the industry’s ethical floor. What is the point of all this?
CZ and Vitalik struggled to understand memes, giving rise to DeSci—let speculators speculate, let science innovate. It seemed like a meeting point, but how could mouse experiments or classical mechanics compete in appeal with today’s internet memes or strange AI-generated content? That narrative burned bright briefly. After AI and DeSci cooled down, celebrity tokens took over—from North America’s President Trump to South America’s President Milei, liquidity was thoroughly drained.
When markets cool and narratives stall, Ponzi schemes dominate asset issuance. Virtuals combined Binance Launchpool with Alpha mechanics—stake for points, points for new token allocations, then stake those new tokens again—and sure enough, the token price skyrocketed. Hmm, so blatant and direct, yet it fails to spark any interest in me. What’s next? Believe (an internet capital market concept)?
I’m unsure. Yet in the last cycle, amid flywheels, Ponzis, and narratives, DeFi emerged as a treasure trove, generating numerous fresh ideas. What can this phase of speculation create? I only see ever-simplifying issuance barriers, accompanied by increasing malicious incidents. Do we need a new set of rules?
4. Attention
In the past, a project rose through narrative and technology, erupting after consensus formed. Today, we buy attention—Blurs using points to purchase it, or exchanges spending real money to form KOL-driven MCNs. The PDD + Douyin live-stream selling combo dominates marketing tactics within the space. Compared to founders attending conferences preaching tech, this method seems far more direct and effective.
Attention is undoubtedly one of the most valuable assets of our time—yet also one of the hardest to measure. Kaito attempts to quantify it, though "Yap-to-Earn" isn’t particularly novel—it existed in ancient SocialFi eras. Kaito’s biggest innovation lies in AI-driven systems claiming to identify information “value,” using AI to assess promotional effectiveness. Still, this model clearly fails to capture long-term value. Tokens are turning into “fast-moving consumer goods.”
The flaws of the three-pronged points system are already deeply felt by all. I’ve reviewed Blur’s impact on the community in past articles. If future projects rely solely on purchased attention, I hesitate to judge whether this is right or wrong. Marketing efforts aren’t inherently sinful, but the ecosystem shows a worrying trend toward universal pump mentality. The old crypto era has truly ended. Monetizing influence has become a mature business—from U.S. presidents to Binance to today’s KOLs—no project thrives from it. Everyone simply takes what they need.
Conclusion
Stablecoins will go global. Blockchain payments are inevitable. But native dwellers here may not need them. We want native on-chain stablecoins, non-financialization, and the next wave. We don’t want to live in a Web3 where traffic trading defines everything.
Time is proving some BTC OGs were right all along. Yet I still hope they’ll be wrong in the future.
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