I believe everyone has already seen the records of the first two weeks of Consensus HK, I will not repeat it, and I can summarize that most of it is about the disappointment in the industry and the lack of prospects for a breakthrough, and they believe that the bear market has arrived. That week was also a feast for the P-warriors and the KOL gods. The impact of the Hong Kong trip on me is rationality. Those little warriors and gods who work harder than fund managers and entrepreneurs, they deserve to get so much, and they are surrealist investors. They can always put a perfect ending to every trade. The trading principle of many P-warriors is 90% or BTC, 10% active SOL position, always maintaining PVP and sprinting, no matter how much they profit each time, they will execute this position allocation. Because of the meme wave and the attention economy, this has become the hottest discussion in HK.
Kaito's victory has ushered in the golden age of KOLs, with attention being priced and quickly monetized. In stark contrast, the entire Ethereum ecosystem is lifeless, and the idealized trumpet has no one to follow, a real blow. The so-called value investors are deeply trapped, and long-term holders are starting to be bearish on Ethereum, turning to Solana. Many people don't see the hunger of Ethereum's entrepreneurs (in contrast, when a dev goes to L2/Ethereum to request a connection, it takes an average of two weeks, while with the Solana Foundation it can usually be done in less than two days). This seems to be deliberately done by the dominators of the crypto industry. In this bull market mini-cycle, long-term holders are not encouraged, but short-term traders are rewarded better. But in my view, this is sounding the alarm for the industry leaders like Ethereum who are not doing enough or lack crisis awareness.
Prevalence of Short-termism: The Collapse of Industry Values
At the same time, when everyone has shed their disguise and wants to cash in big when the bull market ends, many people have lost their ideals/beliefs and have become ruthless arbitrage tools. No one cares about the future of the industry, everyone just wants to make the last buck of this cycle. Exchanges can abandon listing standards to list some of their own invested projects in order to support the prices of their own project tokens; top-tier projects are treating TGE as the final ATM, and market makers have also become the champions of this cycle, able to get free chips through BD and branding, and in the overall VC token downtrend, the average medium-sized MM can get a net income of close to $40 million; it seems that everything is moving from long-term to short-term bubble and speculation, and the actions of these people are having a more far-reaching impact on some entrepreneurs who are sticking to building.
This moment is very similar to 2018/2022, very quiet, with practitioners leaving the industry because they see no hope and identity in the industry. Everyone is trying every means to survive the bear market. For the teams that are still entrepreneurial and doing things, this will be very painful, they need unwavering faith and values. Trump has influenced the core values of the entire United States, and after the TRON token, the crypto industry has sparked a huge nihilistic investment mentality. When practitioners and speculators all think this is a fast and short-term game, everyone also aims to take as much cash as possible before the "money game button" is pressed.
In summary, the Hong Kong trip was a major collapse of industry values, and also a formal written judgment on Ethereum. As the most successful entrepreneur in the industry, has he not grasped the helm of the industry well, and is he leading the industry towards nihilism?
Challenges and Transformation of the Ethereum Ecosystem
TL;DR version: The founder of Denver infra is very bearish, but the founders of applications and AI are bullish.
The Denver trip still saw many shocking scenes, where some founders and developers who have been steadily building for many years were suddenly told that the great Qing dynasty was about to end, and they chose not to believe it. It seems that the Ethereum ecosystem has always had a culture of being taken care of, and they have had smooth fundraising all along, and they have also seen many projects that are not as good as them perform well in the token speculation market, perhaps they have never thought that one day they would not be able to raise money and their own tokens would go to zero like other air coins. It was not until their runway was down to the last 6-9 months that they gradually realized they needed to really build a product with revenue and user base, and also started to seriously think about what the problems with Ethereum are.
Of course, there is never a time that is too late, it's just that for them it requires drastic layoffs and a complete denial of their past, which is a huge challenge for the founders, because they are just betting on an uncertain direction, but have to risk their entire fortune for it. According to incomplete statistics, the total financing of projects deeply rooted in and built on the Ethereum and EVM ecosystem exceeds hundreds of billions of dollars, and their total first and second market valuation exceeds trillions of dollars. Therefore, the problem facing these projects is whether to stay in Ethereum or leave? Even as strong as the founder of Lido, Konstantin, when he tweeted about establishing a second Ethereum foundation, he immediately received DMs from hundreds of Ethereum ecosystem DeFi founders, which is still a big challenge for consensus.
Additionally, I met a group of Ethereum ecosystem entrepreneurs who have always been the technical pillars of the industry, and the technical products and solutions they have produced have always been widely adopted, whether it's TEE/zkTLS/rollup, they have been dominant. But these people are also tired of providing ever better solutions for technical protocols without end-user demand and needs, and what now excites them is the inspiring new papers emerging in the field of AI research. To be honest, this type of founder is not uncommon, and they are one of the few founders who can really dig deep and come up with viable solutions in the industry. If a large number of such founders choose to leave, I think the impact on the entire Ethereum infrastructure will set it back by three to five years.
The Wonderful Energy of the Fusion of AI and Web3
At first, everyone was saying that Denver infra was completely devoid of hotspots and vitality, but as we chatted about 3-4 new AI*Web3 projects per day on average, we saw the Ethereum community's active embrace of emerging technologies like AI, and their innovative attempts in areas like DeTraining/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 a $100 million investment in the Web3 LLM company Nous Research at a $1 billion valuation, Groq has generated over $100 million in revenue in the past year in the Inference field, Openmind has collaborated with Unichain to create RobotAI, the open-source product of DePAI debuted in Denver, Hyperbolic has become one of the inference networks with the highest integration support for Web3 developers, and there are also open-source Intelligence platforms like Open Gradient and Pluralis. At the Ethereum conference like Denver, smart developers and founders have already started to fully help Web3 embrace AI, and everyone is brainstorming how to bring AI agents and more applications into Web3 scenarios. The industry has never had a stopping point, and research and curiosity will always drive those builders to go further.
Macro Positive Factors Ease, Crypto Keeps Pace with the Times
But after dealing with most American institutions, the scene is completely different from Asia, as everyone remains very optimistic and confident about the crypto policy bull market environment, the policy of US banks accepting crypto asset custody has been passed, and banks will soon gradually allow BTC/ETH to be used as collateral, and even expand to mining equipment, here we can see a clear trend that the crypto interest rate environment is about to form, from the original industry 10% lending rate can be adjusted to around 3-4% or even negative interest rates in Japan, which will bring back liquidity to the industry.
In addition, we have recently seen a series of crypto-friendly policies in the US, Uniswap and Coinbase are both considering designing tokenized securities models to allow traditional industry investors to better evaluate and purchase tokens. The positive regulatory release in this cycle will far exceed our expectations, so I am very optimistic about the excellent macro environment that the market will welcome in the next two years.
Many people say that this round of bull market has already ended, 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 native market, in this round of cycle we have not yet seen real innovation, if there is no innovation, this will be a false bull market. In the next two years, we can expect more traditional companies/even national regimes to settle in 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.
Reconstructing Ethereum Governance: Towards Mainstream and Commercialization
On the third day in Denver, I attended the Pragma hosted by ETHGlobal, where I met several core EF developers, who revealed the upcoming new organizational structure adjustments for Ethereum. What's more interesting here is @dannyryan, whose reputation and voice in the Ethereum core developer circle have been well-known, and the newly established @Etherealize will also shoulder the mission of the new era of Consensys, helping Ethereum move towards the mainstream world and commercialization; In addition, the two Co-EDs of the Foundation, Hsiao-Wei
@hwwonx has also been deeply involved in Ethereum for many years, following Vitalik since 2016 (attached photo 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 ecosystem projects, and as a third-party dev shops, they have a deep understanding of a more sustainable business logic, which can help Ethereum find a balance in the infra and commercialization path.
In fact, the problems Vitalik is facing are the same as those faced by all entrepreneurs, the team has become too big and difficult to manage. Friends who understand the study of personal characteristics can try to analyze V's inner journey, from the Milady emoji Twitter avatar to the disappointment with the crypto OGs, replacing it with the half-human half-bird Druid image of World of Warcraft, which also represents his reconciliation with the community's call, and 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 is just thirty years old, he indeed has not performed particularly brilliantly in organizational structure management and Ethereum application commercialization, but who can lead this organization to create more brilliance and results?
Perhaps Ethereum can also learn from Elon Musk and create a DOGE Discipline Committee, specifically responsible for dismissing some irresponsible devs and sinecures, how to measure the value contribution and KPI is an important issue facing V. In addition, provide clearer value propositions and development needs for internal core developers, and give the management team more specific roadmaps and management time limit requirements, so that Ethereum can better return to community and democratic governance. As the cornerstone of Web3, Ethereum is also actively exploring Layer2 solutions and technical upgrades to meet the growing application needs.
There Has Never Been a Savior, V Needs to Encourage More Application Entrepreneurs
For Ethereum, is technical R&D so important now? Perhaps in 2017 it was important, in 2020 it was important, in 2022 it was important, but now applications should be more important than technology. The most important milestone for Ethereum and the greatest confidence for ecosystem builders will be whether Ethereum, as the world's computer, can produce groundbreaking super-app products.
Many people have seen Vitalik as the savior of Ethereum, Ethereum as the savior of the industry, but there has never been any savior. Everyone should be the savior, I have appealed in a previous tweet, all organizations that have accumulated generous capital and stable business income in this industry should actually contribute to the future of this industry, they can donate to some Ethereum open source organizations, or 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 Altcoin bloodbath, it has also dealt a heavy blow to the already shaky Asian funds, many funds have started to shut down or transform into secondary markets, the Asian entrepreneurial environment is difficult, if we lose the support of Asian institutional investment VCs, the industry will also become more thin. Here I still call for, in the Ethereum ecosystem organizations, early-stage venture capital support must not be missing, I suggest that all exchanges can allocate 1-2% of their annual revenue to support the development and innovation of the Ethereum open source ecosystem.
Will Ethereum perish in the next bull-bear cycle? I don't think so, this is the most successful decentralized organization in the Web3 industry, we should not let it fail, its failure means that the hundreds of billions to trillions of talents and project assets built on the Ethereum business empire will have to start over, the entire industry will be in a 5-10 year major setback, meaning that many OGs will leave the field.
Please cherish your Ethereum, if you take a 10-year perspective, when you look back on the events of 2020-2030 in 2030, you may find that the doubts and clamor of 2025 were actually trivial, how to judge value and innovation on a 10-year dimension, this is an issue worthy of deeper consideration.
Optimists are often right, in the most difficult and turbulent stages, we should maintain confidence and optimism.
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