Author: Jocy, founder of IOSG
I believe everyone has already seen many records of the first two weeks of Consensus HK, so I will not repeat them. The majority can be summarized as disappointment with the industry and no prospect of a breakthrough, and it is believed that the bear market has arrived. That week was also a feast for the P-warriors and 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 deserve so much, and they are surrealist investors who 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. Due to the meme wave and 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, with the idealized trumpet of hollow dreams followed by no one, a harsh reality. The so-called value investors are deeply trapped, and long-term holders are starting to be bearish on Ethereum, turning to Solana instead. Many people cannot 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 a deliberate act by the dominators of the crypto industry, who in this bull market cycle do not encourage long-term holders but rather reward short-term traders, but in my view this is sounding the alarm for the industry leaders like Ethereum who are not doing enough or lack a sense of crisis.
Prevalence of Short-termism: The Collapse of Industry Values
At the same time, when everyone has shed their disguise and wants to make a big profit when the bull market ends, many people start to have no ideals/beliefs and 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 the listing standards to list some of their own invested projects in order to support the prices of their own project tokens; top-tier projects treat TGE as the last cash machine, and market makers have also become the champions of this cycle, relying on BD and brand to get free chips and earn a net income of nearly $40 million on average in the overall VC coin downturn. 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 persist in building.
This moment is very similar to 2018/2022, with a very cold atmosphere, and practitioners leaving the industry because they see no hope and identity in it. Everyone is trying their best to survive the bear market. For the teams that are still entrepreneurial and doing things, it will be very painful for them, they need unwavering faith and values at all times. Trump has influenced the core values of the entire United States, and after the Trump token, the crypto industry has sparked a huge nihilistic investment mentality. When practitioners and speculators all think this is a quick 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 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 also 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 will not be able to raise money and their own tokens will 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 late time, 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 betting on an uncertain direction, but have to risk their entire fortune for it. According to incomplete statistics, the total financing amount of projects deeply rooted and established in the Ethereum and EVM ecosystem exceeds hundreds of billions of dollars, and the total valuation of the primary and secondary markets exceeds trillions of dollars. Therefore, the problem facing these projects is whether to stay in Ethereum or leave? As strong as Lido founder Konstantin, when he tweeted about establishing a second Ethereum Foundation, he immediately received DMs from hundreds of Ethereum ecosystem DeFi founders (including Uniswap), of course, this still poses a great challenge to the consensus.
I also 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 developed have 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 it does not bring them real entrepreneurial joy. What excites them now are the inspiring new papers emerging in the field of AI research. To be honest, there are not a few such founders, and they are among the few in the industry who can really dig deep and come up with viable solutions. 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 at least.
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 after we talked about 3-4 new AI*Web3 projects on average every day, 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, with Paradigm leading a $100 million investment in Web3 LLM company Nous Research at a $1 billion valuation, Groq generating over $100 million in revenue in the past year in Inference, Openmind and Yuanmu Technology creating RobotAI, DePAI's open-source products debuting in Denver, Hyperbolic becoming one of the web3 developer integration support networks with the highest Inference, as well as open-source Intelligence platforms like Open Gradient and Pluralis. At Ethereum conferences like Denver, smart developers and founders have already started to fully help Web3 embrace AI, and everyone is brainstorming how to get 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.
Openmind has collaborated with Yutree Technology to create RobotAI, and the open-source product DePAI was unveiled in Denver.
Macro Positive Factors Gradually Released, Crypto Keeps Pace with the Times
However, after dealing with most American institutions, the scene is completely different from Asia, and everyone is very optimistic and confident about the crypto policy's bull market loose environment. The policy of U.S. 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. We can see a clear trend that a crypto interest rate cut environment is about to form, from the original industry-internal 10% lending rate 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 positive crypto policies in the U.S., with Uniswap and Coinbase 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 in the next two years. Many people say this round of the bull market has already ended, but I don't think so. Each round of the 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 cycle, we have not yet seen true innovation, and if that continues, it will be a false bull market. In the next two years, we can expect more traditional companies/even national regimes to settle in L2 networks and issue their own decentralized networks, which will drive the growth and value capture of the Ethereum L1 again.
Reconstructing Ethereum Governance: Towards Mainstream and Commercialization
On the third day in Denver, I attended the Pragma event hosted by ETHGlobal and met several core EF developers, who revealed the upcoming new organizational structure adjustments for Ethereum. What's interesting here is that @dannyryan, who has a well-known reputation in the Ethereum core developer circle, 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, have been deeply involved in Ethereum for many years, following Vitalik since 2016 (the person sitting next to Vitalik in the image from the 2019 Ethereum hackathon in Beijing). Tomasz @tkstanczak, as the founder of Nethermind, is very familiar with the entire Ethereum ecosystem projects and, as a third-party dev shop, he understands the more sustainable business logic, which can help Ethereum find a balance in infrastructure and commercialization.
The person sitting next to Vitalik in the image from the 2019 Ethereum hackathon in Beijing is Co-EDs Hsiao-Wei @hwwonx.
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 from World of Warcraft, which also represents his reconciliation with the community's calls. 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, and we should be more tolerant of this 30-year-old man. 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 to dismiss some irresponsible devs and sinecures. How to measure contribution value and KPIs is an important issue facing V. In addition, providing clearer value propositions and development needs for internal core developers, and more specific roadmaps and management time limits for the management team, will better allow Ethereum to 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 demands.
There Has Never Been a Savior, V Needs to Encourage More Application Entrepreneurs
For Ethereum, is technical R&D currently that important? 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's next step and the greatest confidence for ecosystem builders will be whether Ethereum, as the world's computer, can produce groundbreaking super-applications.
Many people have treated Vitalik as the savior of Ethereum, and Ethereum as the savior of the industry, but there has never been any savior. Everyone should be a savior. I have appealed in a previous tweet that all organizations that have accumulated generous capital and stable business income in this industry should contribute to the future of this industry, either by donating to Ethereum's open-source organizations or creating 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, the already shaky Asian funds have also suffered a heavy blow, with many funds starting to shut down or transform into secondary markets. The Asian entrepreneurial environment is difficult, and if we lose the support of Asian institutional VC investors, the industry will become even more thin. Here I still call for, in the Ethereum ecosystem organizations, the 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, and 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, and the entire industry will fall into a 5-10 year major setback, meaning that many OGs will leave the market.
Please cherish your Ethereum. If you look at it from 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 insignificant. How to judge value and innovation from a 10-year perspective is an issue worthy of deeper consideration.
Optimists are often right. In the most difficult and turbulent stages, we should maintain confidence and optimism.
