Author: MONK Compiled by Tim, PANews Over the past year, crypto Twitter has been flooded with crypto natives lamenting the state of the industry and downplaying the value of innovation within our sector and asset class. While these criticisms do point to objective facts and often reflect the real challenges facing the crypto space, I believe this pessimism has gone too far, swerving into a doomsday narrative. In my view, crypto pessimism, while well-intentioned, is a dangerous and misguided mindset that has become rampant. This article will challenge this pessimism by examining the current stage of development, which shows that the reality is not as bleak as some have portrayed. First, let's establish some common ground: Most current tokens and token economics have design flaws The increasing number of low-quality project builders is diluting the value of real builders Fraud and money-making methods are emerging in an endless stream The truly valuable protocols in the entire crypto space only account for a very small proportion Tokens with investment value are rare Protocol governance is often inefficient The industry still has a lot of legacy issues that need to be resolved The root causes of these problems mainly lie in the following aspects: We are at a stage where the regulatory framework is still unclear Encryption technology has significantly lowered the threshold for asset creation and acquisition However, in the process of industry development, there has always been a phenomenon of making improper behaviors profitable. Fortunately, these problems can be solved, or are the inevitable product of the development of an open but immature industry. Deep down, I think we all understand this. I believe the real reason for the recent continued and escalating pessimism in the crypto market is that it is becoming increasingly difficult for market participants to achieve excess returns, leading to a kind of frustration and impatience that feels like a blunt knife cutting flesh. This pessimism has nothing to do with a lack of innovation, but rather stems entirely from the poor structure of crypto assets. Let’s review our achievements: I believe these crypto products have found product-market fit, or at least paved the way for crypto verticals to achieve product-market fit. While there aren't many of these products, with each construction cycle, as infrastructure improves and knowledge compounds, we're creating more products with real value. Some of you might see this chart and realize that good things come to those who wait, and that the actual trajectory isn't as bad as initially thought. On the other hand, some might dismiss it and say, "That's no big deal." For the latter, let me show you: You probably don't recognize them. These are vintage homepages from the early days of dot-coms. Of course, they were nothing like the internet we know and love today. The following are some examples of listed companies that have failed since the bursting of the Internet bubble (source: Wikipedia): Amazon's stock price plummeted from a high of $107 to a low of $7 in two years, a drop of more than 90%, and did not recover until 2010. The number of actual "failures" in venture capital is orders of magnitude higher. Thousands of companies have failed to IPO, potentially leaving venture capitalists with a significant portion of their profits. Fortunately, we finally found these benchmark companies: Amazon – Founded on July 5, 1994 Netflix – Founded on August 29, 1997 PayPal — Founded in December 1998 Google — Founded on September 4, 1998 Facebook — Founded on February 4, 2004 Likewise, AI deserves the spotlight as an innovative technology category and growth narrative, but I wouldn’t be surprised if we see the same power law survival dynamic a decade from now. These are the top AI startups that emerged from Israel in 2020. If 99.9% of speculators in the top tech categories fail, why is this phenomenon so painful in the crypto field? This is because we've turned nearly every project into a venture capital investment, slapping a publicly traded ticker symbol on every project. We've allowed any developer to launch viable, investable "startups" without due diligence, leading to a massive expansion in the number of investable "companies." This has exposed a large number of retail investors to the low-probability nature of investing in this asset class, only exacerbating the growing negative sentiment towards cryptocurrencies. Imagine if every internet entrepreneur could raise money directly from a group of enthusiastic retail investors with a semi-finished project, skipping the seed round, private placement, and IPO process. And imagine adding a platform like Pump.fun, eliminating the need for a product. Of course, our asset class will be filled with minefields, with stocks poised to plummet 90%. What achievements have we made? Today, Bitcoin is a $2 trillion asset, just 16 years after it was launched as a cypherpunk pipe dream by an unidentified founder. In the decade since we first had a programmable smart contract platform: We built a peer-to-peer internet that can withstand a World War III-level attack, protecting trillions of dollars in value. We’ve built an upgraded network that’s far superior to its predecessor, enabling permissionless asset creation with a single click and supporting billions of dollars in decentralized spot trading volume every day. We enable the world to hold tokenized dollars and transfer any amount to anyone, instantly, at near-zero cost. We bring basic financial functions such as lending and passive income into the on-chain world. We have built a transparent, borderless, and identity-free derivatives trading platform with trading volume comparable to Robinhood, and returns almost all of the revenue to token holders. We are reshaping the market structure, creating new models for buying and selling long and short assets, and pioneering new asset classes such as prediction markets and perpetual contracts. We make six-figure JPEG digital archives a reality. We’ve fostered absurd and vibrant online communities, where meme tokens are valued higher than publicly traded companies. We have pioneered new capital formation models such as ICO and bonding curves. We are exploring innovative ways to achieve financial and monetary privacy. As I often say, we have given anyone with internet access an emerging alternative to the financial system they are forced to accept based on their nationality. Our alternative is young, but it is freer, more open, and more fun. Every year, we provide the market with opportunities to invest in groundbreaking technologies at rock-bottom valuations. Investors simply need to sift through the deluge of information. We at Syncracy believe that the "FAANG" of crypto is beginning to emerge, and new viable competitors will emerge every year or two. I often use this quote to help us examine this industry: "Our intuition about the future is linear. But the reality of information technology is exponential, and that makes a world of difference. If I take 30 steps linearly, I only get to 30. If I take 30 steps exponentially, I get to a billion." - Ray Kurzweil, The Singularity Is Near: When Humans Transcend Biology We expect linear incremental progress in crypto every year and throw our money at a bunch of worthless hype, hoping this year will be more fruitful than previous years. This will ultimately lead to disappointment and losses for many. Even so, the constant doomsaying and criticism of project development is unjustified when every so-called "real" technology project goes through the same growing pains. It's just that in crypto, these pains are more acute because we all have a stake in them. Looking ahead ten years, none of us can accurately predict the trajectory of development, and I don't believe innovation will proceed along the timeline we envision. Some years may be uneventful, while others will be explosive. It's entirely possible that in three years, there will be 20 agreements that have achieved product-market fit, not just seven. To understand how the story of the internet pioneers ended, see the chart below. It took us 15 years to fully recover. But as we all know, what has happened since then is: Yet, just as the older generation, Wall Street elites, and senior members of the U.S. government are finally starting to pay attention and recognize cryptocurrency as a legitimate industry, many of us early adopters seem to be wavering in our belief in this mission. I strongly disagree. Bitcoin is still digital gold, and we are still building new financial cornerstones to make the world a better and more interesting place. For some of us, excess returns can still be achieved through a variety of investment channels. Choose crypto-optimism.Author: MONK Compiled by Tim, PANews Over the past year, crypto Twitter has been flooded with crypto natives lamenting the state of the industry and downplaying the value of innovation within our sector and asset class. While these criticisms do point to objective facts and often reflect the real challenges facing the crypto space, I believe this pessimism has gone too far, swerving into a doomsday narrative. In my view, crypto pessimism, while well-intentioned, is a dangerous and misguided mindset that has become rampant. This article will challenge this pessimism by examining the current stage of development, which shows that the reality is not as bleak as some have portrayed. First, let's establish some common ground: Most current tokens and token economics have design flaws The increasing number of low-quality project builders is diluting the value of real builders Fraud and money-making methods are emerging in an endless stream The truly valuable protocols in the entire crypto space only account for a very small proportion Tokens with investment value are rare Protocol governance is often inefficient The industry still has a lot of legacy issues that need to be resolved The root causes of these problems mainly lie in the following aspects: We are at a stage where the regulatory framework is still unclear Encryption technology has significantly lowered the threshold for asset creation and acquisition However, in the process of industry development, there has always been a phenomenon of making improper behaviors profitable. Fortunately, these problems can be solved, or are the inevitable product of the development of an open but immature industry. Deep down, I think we all understand this. I believe the real reason for the recent continued and escalating pessimism in the crypto market is that it is becoming increasingly difficult for market participants to achieve excess returns, leading to a kind of frustration and impatience that feels like a blunt knife cutting flesh. This pessimism has nothing to do with a lack of innovation, but rather stems entirely from the poor structure of crypto assets. Let’s review our achievements: I believe these crypto products have found product-market fit, or at least paved the way for crypto verticals to achieve product-market fit. While there aren't many of these products, with each construction cycle, as infrastructure improves and knowledge compounds, we're creating more products with real value. Some of you might see this chart and realize that good things come to those who wait, and that the actual trajectory isn't as bad as initially thought. On the other hand, some might dismiss it and say, "That's no big deal." For the latter, let me show you: You probably don't recognize them. These are vintage homepages from the early days of dot-coms. Of course, they were nothing like the internet we know and love today. The following are some examples of listed companies that have failed since the bursting of the Internet bubble (source: Wikipedia): Amazon's stock price plummeted from a high of $107 to a low of $7 in two years, a drop of more than 90%, and did not recover until 2010. The number of actual "failures" in venture capital is orders of magnitude higher. Thousands of companies have failed to IPO, potentially leaving venture capitalists with a significant portion of their profits. Fortunately, we finally found these benchmark companies: Amazon – Founded on July 5, 1994 Netflix – Founded on August 29, 1997 PayPal — Founded in December 1998 Google — Founded on September 4, 1998 Facebook — Founded on February 4, 2004 Likewise, AI deserves the spotlight as an innovative technology category and growth narrative, but I wouldn’t be surprised if we see the same power law survival dynamic a decade from now. These are the top AI startups that emerged from Israel in 2020. If 99.9% of speculators in the top tech categories fail, why is this phenomenon so painful in the crypto field? This is because we've turned nearly every project into a venture capital investment, slapping a publicly traded ticker symbol on every project. We've allowed any developer to launch viable, investable "startups" without due diligence, leading to a massive expansion in the number of investable "companies." This has exposed a large number of retail investors to the low-probability nature of investing in this asset class, only exacerbating the growing negative sentiment towards cryptocurrencies. Imagine if every internet entrepreneur could raise money directly from a group of enthusiastic retail investors with a semi-finished project, skipping the seed round, private placement, and IPO process. And imagine adding a platform like Pump.fun, eliminating the need for a product. Of course, our asset class will be filled with minefields, with stocks poised to plummet 90%. What achievements have we made? Today, Bitcoin is a $2 trillion asset, just 16 years after it was launched as a cypherpunk pipe dream by an unidentified founder. In the decade since we first had a programmable smart contract platform: We built a peer-to-peer internet that can withstand a World War III-level attack, protecting trillions of dollars in value. We’ve built an upgraded network that’s far superior to its predecessor, enabling permissionless asset creation with a single click and supporting billions of dollars in decentralized spot trading volume every day. We enable the world to hold tokenized dollars and transfer any amount to anyone, instantly, at near-zero cost. We bring basic financial functions such as lending and passive income into the on-chain world. We have built a transparent, borderless, and identity-free derivatives trading platform with trading volume comparable to Robinhood, and returns almost all of the revenue to token holders. We are reshaping the market structure, creating new models for buying and selling long and short assets, and pioneering new asset classes such as prediction markets and perpetual contracts. We make six-figure JPEG digital archives a reality. We’ve fostered absurd and vibrant online communities, where meme tokens are valued higher than publicly traded companies. We have pioneered new capital formation models such as ICO and bonding curves. We are exploring innovative ways to achieve financial and monetary privacy. As I often say, we have given anyone with internet access an emerging alternative to the financial system they are forced to accept based on their nationality. Our alternative is young, but it is freer, more open, and more fun. Every year, we provide the market with opportunities to invest in groundbreaking technologies at rock-bottom valuations. Investors simply need to sift through the deluge of information. We at Syncracy believe that the "FAANG" of crypto is beginning to emerge, and new viable competitors will emerge every year or two. I often use this quote to help us examine this industry: "Our intuition about the future is linear. But the reality of information technology is exponential, and that makes a world of difference. If I take 30 steps linearly, I only get to 30. If I take 30 steps exponentially, I get to a billion." - Ray Kurzweil, The Singularity Is Near: When Humans Transcend Biology We expect linear incremental progress in crypto every year and throw our money at a bunch of worthless hype, hoping this year will be more fruitful than previous years. This will ultimately lead to disappointment and losses for many. Even so, the constant doomsaying and criticism of project development is unjustified when every so-called "real" technology project goes through the same growing pains. It's just that in crypto, these pains are more acute because we all have a stake in them. Looking ahead ten years, none of us can accurately predict the trajectory of development, and I don't believe innovation will proceed along the timeline we envision. Some years may be uneventful, while others will be explosive. It's entirely possible that in three years, there will be 20 agreements that have achieved product-market fit, not just seven. To understand how the story of the internet pioneers ended, see the chart below. It took us 15 years to fully recover. But as we all know, what has happened since then is: Yet, just as the older generation, Wall Street elites, and senior members of the U.S. government are finally starting to pay attention and recognize cryptocurrency as a legitimate industry, many of us early adopters seem to be wavering in our belief in this mission. I strongly disagree. Bitcoin is still digital gold, and we are still building new financial cornerstones to make the world a better and more interesting place. For some of us, excess returns can still be achieved through a variety of investment channels. Choose crypto-optimism.