For those of us who wish to utilize crypto to improve the world, we must begin labeling this conduct for its true character: myopic, self-centered, unwelcome avarice, asserts VeChain co-founder Sunny Lu.
The initial chief worry is that increasingly fewer creators are seeking smart contract attestations, a point that has emerged repeatedly in my discussions with auditing firms (and is confirmed by Yearn’s recent smart contract failure). This is a customary primary step before any decentralized application (dApp) is released. It is not due to their contentment launching without one: it’s because the novel dApps are nonexistent. Builders—developers, originators aiming to launch applications users actually desire—are either awaiting environmental improvement or exiting the crypto space. They lack enthusiasm for developing what are, frankly, straightforward applications or for merely duplicating existing offerings—such as financial instruments, tokenized assets, etc.
Secondly, there is minimal incentive, backing, or capital from patrons for the utility applications that are considerably more difficult to construct and (typically) demand greater duration. Unless an application possesses the prospect of a 1000x return within a brief timeframe via some form of DeFi arrangement, it simply won’t secure funding or “backing,” which constrains the builders. Put differently: if you are a blockchain-aware founder with an excellent concept, you might confront an insurmountable initial obstacle.
Rather, the investments in our sector are presently concentrated on the pursuit of purely near-term gains, such as memecoins, manipulation based on private information, multi-tiered DeFi frameworks lacking sufficient clarity, and excessive borrowing. And where capital flows, awareness follows, which clarifies why we hear progressively less about blockchain-based products or applications. We are instead inundated with reports and talks concerning ETF inflows/outflows, DAT metrics, trading advice, etc. This merely serves to further mislead and confound retail participants who are acquiring into these misconceptions, which are not designed for novices, without grasping the deceptive conduct occurring behind the scenes.
Worst of all, this emphasis on profit-seeking over genuine blockchain-based uses is being sustained by many of our industry “pioneers.” They could be advocating for the migration of the entire worldwide financial structure onto the chain for augmented efficiency and transparency, or the utilization of blockchain and crypto to genuinely uplift our communities, such as encouraging sustainable activities or healthier habits. But instead, they are adopting (and promoting) a fresh, more perilous type of intermediary.
It is these intermediaries and their monetary products that have introduced damaging and deliberate intricacy and concealment into our once-clear markets. And by doing so, they have unleashed an unbelievable fresh degree of avarice and appropriation.
Think about the recent October 11th forced sale—we still haven’t learned the complete repercussions of that event, other than that retail investors continue to bear the consequences while those in authority arrange their own resolutions.
Cryptocurrency and blockchain were conceived to eradicate financial elites and broaden participation in a new epoch of the internet. Instead, we have permitted the reinvention of the manipulative intermediaries and welcomed them directly back, slightly altered, as the prospective ‘rescuers’ of Web3.
Web3 acquired its designation because blockchain is truly the subsequent generation of the Internet. Examining the fundamentals of the technology itself, blockchain stands as the pinnacle of humankind’s technological progress. Applied effectively, AI will boost our output, and blockchain will better the relationships of how disparate entities cooperate without impediments. Together, they might transform the world as much as, or more than, the internet did.
But instead, we’re observing DATs, ETFs, trading margins, and DeFi liquidations, and a small contingent is realizing disproportionate rewards from the misfortune and losses of millions of others. Crypto has yet to realize its aspiration of mirroring the sweeping transformation of the World Wide Web, with decentralized tenets at its heart.
As I’ve observed these preceding months, I am continually reminded of a scene from the film The Big Short. Investor Mark Baum, growing exasperated by the irrational and covetous actions of the market (and the actors within it), remarks: “What troubles me isn’t that deceit is unkind. Or that deceit is cruel. For fifteen thousand years, deceit and myopic planning have never, ever succeeded. Not once.”
He is correct. Every solitary cent of profit accrued from squeezing the crypto ecosystem only drives creators further away and stalls the advancement of this remarkable technology. In exchange for the prospect of a short-term return, these crypto intermediaries are dismantling the worth of the underlying asset they are speculating upon. But everyone in the sector will eventually account for that, including those who cherish this technology and believe in its capacity.
For those of us who wish to utilize crypto to improve the world, we must begin labeling this conduct for its true character: short-sighted, self-centered, unwelcome avarice. We need to take action to rescue our cherished industry, to concentrate on building more tangible utility and placing it at the focal point of constructing inventive applications for the next billion users, and the ventures and mechanisms that fulfill the undeniable potential of Web3.
Let us all embrace the struggle for utility, while there is still spirit left within us.
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