Author: Jocy, Founder of IOSG

I believe everyone has seen many records from Consensus HK two weeks ago, so I won't repeat them. Most can be summarized as disappointment in the industry with no signs of a breakthrough, and the belief that we have entered a bear market. That week was also a feast for Pionex and KOLs. The impact of my trip to Hong Kong was the sense of rationality; those young talents and KOLs who work harder than funds and entrepreneurs deserve what they have. They are surrealist investors, always able to add a perfect punctuation mark to every trade. Many Pionex traders adhere to a trading principle of 90% in BTC and 10% in active Solana positions, maintaining PVP and sprinting at all times. Regardless of how much profit they make each time, they execute this position configuration. Due to the meme wave and attention economy, this became the most lively discussion in HK.

Kaito's victory has ushered in a golden age for KOLs, where attention is priced and can be quickly monetized. In stark contrast is the entire Ethereum ecosystem, lifeless and hollow, with no one following the idealistic horn. This is a harsh reality check. So-called value investors are deeply trapped, and long-term holders are starting to turn bearish on Ethereum, shifting towards Solana. Many fail to see the level of hunger among Ethereum entrepreneurs (in contrast, when a developer seeks to establish a connection with L2/Ethereum, it typically takes an average of two weeks, while the Solana Foundation can usually complete the connection and start communication in less than two days). This seems to be a deliberate act by the rulers of the crypto industry, discouraging long-term holders during this small cycle of the bull market while providing better returns to short-term traders. In my view, this reflects a lack of action or crisis awareness from industry leaders like Ethereum, and the market is sounding the alarm.

The Prevalence of Short-Termism: The Collapse of Industry Values

At the same time, as everyone sheds their disguises, wanting to cash in during the market's decline, many begin to lack ideals and beliefs, becoming ruthless arbitrage tools. No one cares about the industry's future; everyone just wants to make one last profit in this cycle. Exchanges, in order to support their project tokens and chains, may abandon listing standards to list some projects they have invested in; top-tier projects treat TGE as their last cash machine, and market makers become the consistent winners of this cycle, relying on BD and branding to obtain chips for free. In a declining overall VC market, the average mid-sized market maker can achieve nearly $40 million in net income. It seems that everything is shifting from long-termism to short-term bubbles and speculation, and the actions of these individuals are profoundly affecting those who persist in building.

This moment is very similar to 2018/2022, extremely quiet. Practitioners leave the industry due to a lack of hope and recognition. Everyone is trying every means to survive in the bear market. For teams still in the process of starting and doing things, this can be very painful; they need unwavering determination and values at all times. Trump influenced the core values of the entire United States, and after the Trump token, the crypto industry sparked a massive nihilistic investment trend. Practitioners and speculators believe this is a fast and short-term game, and everyone aims to take as much cash as possible before the money game button is pressed.

In summary, the trip to Hong Kong represents a significant collapse of industry values and a formal written judgment on Ethereum. As the most successful entrepreneur in the industry, has he grasped the helm of the industry, or is he leading it towards nihilism?

Challenges and Transformation of the Ethereum Ecosystem

For those who prefer a brief version: The founder of Denver infra is very bearish, but the founders of applications and AI are very bullish.

During the Denver trip, I witnessed many shocking scenes. Founders and developers who have steadily built for many years were suddenly told that the great Qing is about to perish, and they chose not to believe it. It seems that the Ethereum ecosystem has always had a culture of monopolization; they have been smoothly financing all along and have seen many projects inferior to theirs perform well in the speculative token market. They may have never thought that one day they would be unable to raise funds and that their issued tokens would also go to zero like other air tokens. It wasn't until their runway was down to the last 6-9 months that they slowly realized the need to create a product with real revenue and a user base, and began to seriously consider what the problems with Ethereum are. Of course, it is never too late; it just means they need to make drastic layoffs and completely deny their past selves, which is a huge challenge for founders because they are betting on an uncertain direction while risking everything they have. According to incomplete statistics, projects deeply rooted in and built on Ethereum and the EVM ecosystem have raised over hundreds of billions of dollars, with their total primary and secondary market valuations exceeding a trillion dollars. Therefore, the question facing these projects is whether to stay on Ethereum or leave. Even strong figures like Lido founder Konstantin, when he announced on Twitter that he would establish a second Ethereum Foundation, instantly received DMs from hundreds of founders in the Ethereum ecosystem, including Uniswap. This still poses significant challenges to consensus.

Additionally, I met a wave of Ethereum ecosystem entrepreneurs who have always been the backbone of the industry's technical faction. The technical products and solutions they developed have been widely adopted, whether TEE/zkTLS/rollup, they have dominated the field. However, these individuals are now tired of providing the best solutions for technical protocols that lack end users and demand, which does not bring them true entrepreneurial joy. What excites them now are the inspiring new papers emerging in the AI research field. To be honest, there are quite a few founders like this, and they are among the few in the industry who can truly delve deep and create viable solutions. If a large number of such founders choose to leave, I believe it will set back the entire Ethereum infrastructure by at least three to five years.

The Wonderful Energy of AI and Web3 Integration

Initially, everyone said that Denver infra had no hotspots or vitality, but after discussing 3-4 new AI*Web3 projects daily, we saw the Ethereum community's active embrace of emerging technologies like AI, as well as 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 harbingers; Paradigm led a $1 billion valuation investment in the Web3 LLM company Nous Research, Groq generated over $1 billion in revenue in the past year as an inference provider, Openmind collaborated with Yushu Technology to create RobotAI, and DePAI's open-source product debuted in Denver. Hyperbolic has also become one of the most supported inference networks for Web3 developers, along with open-source intelligence platforms like Open Gradient and Pluralis. At the Ethereum conference in Denver, smart developers and founders have begun to fully help Web3 embrace AI, brainstorming how to bring AI agents and more applications into Web3 scenarios. The industry never has a definitive end or stopping point; research and curiosity will always drive builders further.

Openmind collaborated with Yushu Technology to create RobotAI, and DePAI's open-source product debuted in Denver.

Macro Benefits Easing, Crypto Keeping Up with the Times

However, after dealing with most American institutions, the scene is completely different from Asia. Everyone maintains a very optimistic confidence in the crypto policy and the loose environment of the bull market. The U.S. banking policy regarding the acceptance of crypto asset custody has been passed, and soon banks will gradually allow BTC/ETH to be used as collateral, and may even expand to mining equipment. Here we can see a clear trend that a crypto interest rate cut environment is about to form, adjusting from the previous industry lending rate of 10% to around 3-4%, and even reaching negative interest rates in Japan. This will bring liquidity back to the industry. Additionally, we have recently seen a series of favorable crypto policies in the U.S. Uniswap and Coinbase are both considering designing tokenized securities models to allow traditional industry investors to better assess and purchase tokens. The regulatory benefits released in this cycle will far exceed our expectations, so I am very optimistic about the macro environment in the market over the next two years. Many people say this round of the bull market has ended, but I don't see it that way. Every bull market not only has the cooperation of the macro market but also the self-innovation and emergence of new applications within the crypto market. In this cycle, we have yet to see true innovation; if there is none, it will be a false bull market. In the next two years, we can expect more traditional companies and even national governments to settle in L2 networks, issuing their own decentralized networks, which will drive the growth and value capture of Ethereum L1 through the prosperity of L2 commerce.

Restructuring Ethereum Governance: Moving Towards Mainstream and Commercialization

On the third day in Denver, I attended Pragma organized by ETHGlobal and met several core EF developers. They revealed that Ethereum is about to undergo a new organizational restructuring. Interestingly, @dannyryan, who has a well-known reputation and voice in the Ethereum core developer circle, is involved. The newly established @Etherealize will also shoulder the mission of a new era for Consensys, helping Ethereum move towards the mainstream world and commercialization. Additionally, the two Co-EDs of the foundation, Hsiao-Wei @hwwonx, have been deeply involved in Ethereum for many years, following Vitalik on various missions since 2016 (the person sitting next to Vitalik in the attached photo from the 2019 Ethereum hackathon selection day in Beijing), and Tomasz @tkstanczak, as the founder of Nethermind, is very familiar with the entire Ethereum ecosystem. As a third-party dev shop, they understand the more sustainable business logic for survival, which can help Ethereum find a balance in its infrastructure and commercialization paths.

Attached is a photo from the Ethereum hackathon selection day in Beijing in 2019, and the person sitting next to Vitalik is Co-EDs Hsiao-Wei @hwwonx.

In fact, the problems Vitalik faces are the same as those of all entrepreneurs: as the team grows, it becomes harder to manage. Friends who understand personality traits can try to analyze Vitalik's journey, from the Milady meme profile picture to his disappointment with crypto OGs, to adopting the half-human, half-bird Druid image from World of Warcraft. This also represents his inner reconciliation with the community's voice, as he officially announced the new team structure for Ethereum the next day. Ethereum may be the first truly decentralized organization and economy in history, and we should show more tolerance towards this man who has just turned thirty. He indeed has not shown particularly outstanding performance in organizational management and the commercialization of Ethereum applications, but who else could lead this organization to create more brilliance and results? Perhaps Ethereum could learn from Elon Musk and establish a DOGE committee specifically responsible for dismissing irresponsible developers and phantom positions. How to measure contribution value and KPIs is an important question before Vitalik. Additionally, providing internal core developers with clearer value propositions and development needs, and giving the management team a more specific roadmap and management time constraints, would better allow Ethereum to return to community and democratically elected governance. As the cornerstone of Web3, Ethereum is also actively exploring Layer 2 solutions and technological upgrades to meet the growing application demands.

There is no savior; Vitalik needs to encourage more application entrepreneurs

For Ethereum, is technical research and development that important right now? Perhaps it was important in 2017, 2020, and 2022, but now applications should be more important than technology. The next most important milestone for Ethereum, which will give ecological builders the greatest confidence, will be whether Ethereum, as a world computer, can produce epoch-making super application products.

Many people regard Vitalik as the savior of Ethereum, and Ethereum as the savior of the industry, but there has never been a savior. Everyone should be a savior. In my last tweet, I called for all organizations that have gained substantial capital accumulation and stable business income in this industry to contribute to the future of the industry. They can donate to some open-source organizations of Ethereum or create better opportunities for young people in the industry. Additionally, aside from supporting with grants, many entrepreneurs still need financing support. In this wave of bloodshed among industry altcoins, it has dealt a heavy blow to the already shaky Asian funds, with many funds beginning to cease operations or transition to secondary markets. The entrepreneurial environment in Asia is tough; if we lose Asian institutional VC investments, the industry will become even thinner. I still call for the early venture capital support to be indispensable in the Ethereum ecosystem organizations. I suggest that all exchanges allocate 1-2% of their revenue each year 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. It is the most successful decentralized organization in the Web3 industry, and we should not let it fail. Its failure would mean that the hundreds of billions to trillions of talents and project assets built on the Ethereum commercial empire would need to start over, plunging the entire industry into a 5-10 year regression, meaning many OGs would exit the stage.

Please cherish your Ethereum. If you consider a ten-year dimension, when you look back at what happened from 2020 to 2030 in 2030, you may find that the doubts and noise of 2025 were actually trivial. How to judge value and innovation from a ten-year perspective is an even more worthy priority to contemplate.

Optimists are often correct; in times of difficulty and fluctuation, we should maintain confidence and optimism.

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