Core Event: Aevo co-founder Ken Chan publicly criticized the crypto industry for turning into a 'super casino', claiming he wasted eight years of his life, sparking intense discussion within the community.
Main Criticism Points:
- Industry incentive mechanisms are distorted, leading to excessive speculation, with a large influx of capital into overvalued public chains and projects lacking real users and revenue.
- Many applications (such as Meme coins and perpetual contracts) are essentially gambling tools, with practitioners chasing short-term arbitrage rather than technological iteration.
- The industry has instilled a sense of 'financial nihilism' in the younger generation, with cryptocurrencies becoming a speculative channel for Generation Z under pressures like high inflation.
Data supporting the industry's dilemma: The scale of on-chain daily active users is limited, with a huge gap compared to mainstream internet platforms, and the user base supporting the grand narrative is weak.
Voices of opposition and reflection:
- Critics argue that this is the negative sentiment of 'those who have made it,' overlooking the financial channels cryptocurrencies provide for ordinary people globally (like stablecoins combating inflation).
- It is pointed out that speculation (gambling) has always been a part of the crypto space, but this cannot negate its underlying progress: Bitcoin has become institutionalized, Ethereum technology has become standard, and DeFi protocols are generating real value.
- Industry transformation takes time; the current phase is a necessary painful period for eliminating subpar projects and squeezing out bubbles, while genuine construction continues.
Conclusion: This debate reflects the collective anxiety of the industry under liquidity exhaustion. Despite the presence of speculative bubbles, cryptocurrencies have demonstrated real value in building a new financial system and providing inclusive financial services, while the industry is undergoing cyclical cleansing and reshaping.
Reduced to a super casino? What happened to the crypto ecosystem?
"I wasted 8 years of my life in the crypto industry."
Aevo co-founder Ken Chan posted a scathing critique, stating that the crypto industry has transformed into a 'super casino.' This 'defensive article' has rapidly flooded communities both domestically and internationally. Behind the millions of views, community discussions have exploded. Supporters see it as a moment of awakening, piercing the bubble, while opponents argue that it's the established interests smashing the bowl they once benefited from.
Setting aside emotional venting, this debate reflects the collective anxiety and cyclical confusion of the current industry under liquidity exhaustion and narrative vacuum.
In this lengthy article, Ken Chan candidly admits that the past eight years have been a journey from idealism to disillusionment.
As a libertarian and programmer deeply influenced by Ayn Rand's works, he was a faithful believer in the cypherpunk spirit, viewing Bitcoin as a 'private bank for the wealthy.' However, after fully investing in this industry for eight years, he painfully admits that even though he made money, he still feels that those eight years of youth were utterly wasted.
The narrative that practitioners love to repeat is 'to completely replace the existing financial system with blockchain,' but this is just a promotional slogan; they are merely maintaining the world's largest casino that operates 24/7 with multiple users online. This cognitive dissonance stems from the complete distortion of the industry’s incentive mechanism. In reality, no one cares about true technological iteration. Market participants are blindly pouring funds into the next Layer 1 public chain, trying to bet on the next Solana. This speculative mentality supports a market cap in the hundreds of billions of dollars that is inflated.
In fact, there are numerous zombie public chains currently; even emerging high-performance chains that have raised tens of millions or even hundreds of millions of dollars cannot escape the cooling after the hype of airdrops and incentive subsidy activities, with very few real users. It’s akin to building countless highways in a desert, but there are no cities or factories along the roadside, just a group of speculators flipping land.
Data also corroborates a dilemma; according to DeFi Llama's data over the past 24 hours, only 15 chains have on-chain DEX trading volumes exceeding ten million, with only 4 meeting the million-level daily active addresses.
On this infrastructure-overloaded 'ghost town,' Ken states that whether it’s spot DEXs, perpetual contracts, prediction markets, or meme coin platforms, they are essentially gambling tools. For instance, the once organic MEME culture has been replaced by an industrialized 'token issuance assembly line,' turning it into an extreme PVP on-chain casino; and the frequent interactions of many applications are not driven by genuine demand but rather to grind points for airdrops. As Ken puts it, while VCs can write 5,000-word articles depicting grand visions, the reality is that these games are continuously consuming the capital of retail and institutional investors.
What makes Ken Chan uncomfortable is the disruption of business common sense in this industry. Here, making money through issuing tokens, market-making, and harvesting is far easier than refining products. The market is flooded with tokens that have 'high FDV, low circulation,' and projects with no real income are valued at billions of dollars, while governance tokens are merely liquidity tools for exit. This environment where bad money drives out good has not only led practitioners to lose the ability to identify sustainable businesses but has also instilled highly toxic 'financial nihilism' in the younger generation.
In light of traditional assets being out of reach, Generation Z has its own 'financial rebellion.' According to a recent article by the Financial Times, the deteriorating housing affordability in the U.S. is profoundly changing the financial and consumption behaviors of Generation Z, even pushing some young people towards crypto speculation and generating economic nihilism. Besides cryptocurrencies, trendy stocks, collectibles, leveraged ETFs, and prediction markets are all part of the financial trends among the youth.
Ken Chan's accusations resonate significantly, for instance, Tangent founder Jason Choi lamented that we already have countless low-cost/fast blockchains, a loose regulatory framework, massive oversaturation in funding since 2017, and thousands of developers delivering smart contracts over the past decade, yet an AI company is about to IPO at a valuation exceeding the total market cap of all cryptocurrencies except Bitcoin and stablecoins.
Santiago Roel Santos, founder of Inversion Capital, points out that this is a sobering reality check for the entire industry. Today, the crypto industry's monthly active users (MAU) are only around 40 million, while Facebook had 845 million MAU at its IPO with a market value of about $100 billion; OpenAI currently has around 800 million MAU, with its latest valuation at $500 billion. To want a $10 trillion asset class, we need at least a billion users.
Crypto KOL YQ referenced an old article indicating that many crypto OGs have chosen to exit after questioning their initial beliefs. In the current cycle, projects with strong speculative characteristics such as memes, perpetuals, and prediction markets remain resilient, while many infrastructure and social projects find it increasingly difficult to prove their value. For startups, VCs, traders, and users, this is undoubtedly the toughest stage, with the market flooded with 'pump and dump' schemes relying on leverage to manipulate small caps or legacy coins. In such an environment, one must acknowledge the facts and accept reality. Whether VCs or entrepreneurs, the only way to survive is to continually adjust direction and consistently deliver products.
Crossing through the emotional cycles of crypto, 'forests need to be cleared of deadwood.'
Many practitioners believe that Ken Chan's negative sentiment is essentially a typical 'pulling up the ladder after reaching the shore' mentality.
As an established interest, he has made enough money in the crypto market, yet he turns around to criticize that the ladder to wealth is dirty. At the same time, his disdain for financial nihilism overlooks that for countless ordinary people worldwide, this bubble-filled market remains one of the few channels for social mobility. Moreover, the price of AEVO has dropped over 98% from its historical peak.
Regarding the current development dilemma of the crypto market, Ken believes the industry is just idling, but in the eyes of many builders, this is merely a necessary painful period for technological development. We cannot dismiss the entire financial new city that is rising just because we see people losing money in the casino.
If we look towards high-inflation countries like Argentina, Turkey, and Nigeria, we find that stablecoins like USDT and USDC have become de facto 'hard currency.' Locals rely on them to protect their meager savings from being devoured by hyperinflation, and this financial system has effectively served tens of millions.
Meanwhile, Bitcoin is no longer just a toy for geeks; it is becoming part of sovereign wealth funds, national government reserves (such as El Salvador, Bhutan), and the balance sheets of top hedge funds; the technical components of Ethereum have been established as global public chain standards and have gained recognition from Wall Street capital.
Furthermore, as assets like stocks, bonds, and real estate accelerate onto the blockchain, financial efficiency is achieving significant leaps. On the technical front, countless developers are making breakthroughs in cutting-edge fields like zero-knowledge proofs (ZK), anti-censorship networks, and quantum resistance. These are the real undercurrents behind the noisy crypto market.
In response to the 'casino theory,' Haseeb, a partner at Dragonfly, pointed out that the crypto space has never lacked casinos. The first hit application on Bitcoin was Satoshi Dice (2012). The first hit smart contract on Ethereum was King of the Ether Throne (2015), which was essentially a Ponzi scheme. Once programmable money was available, the first things people did were always to bet and play games; it’s human nature.
There have always been hot casinos in the crypto world; ICOs, DeFi, NFTs, and now MEME coins—the forms change, but the essence remains the same. Although casinos are glamorous and attract attention on social media, if you only focus on the superficiality of the casino, you will miss out on the more important stories. He further points out that cryptocurrencies are becoming a superior financial vehicle, reshaping the essence of money while quietly changing the power dynamics between individuals and governments.
Bitcoin has begun to challenge national sovereignty, with governments incorporating it into their balance sheets; stablecoins are influencing monetary policy, and central banks around the world are busy responding; meanwhile, the scale and value of permissionless financial protocols like Uniswap and AAVE have surpassed many unicorn fintech companies. The world is undergoing a profound shift around cryptocurrencies.
"This transformation is slower than many expected, but technological diffusion has always been like this," Haseeb stated. After three years since the launch of ChatGPT, generative AI has yet to manifest in GDP or employment data; the industrial revolution took 50 years to truly influence productivity; the internet took over 20 years for widespread adoption. Expecting to replace the world's most stringently regulated financial system within just five years is unrealistic. If you feel frustrated for not getting rich from participating in a certain MEME project, take a deep breath; the industry owes no one wealth. In fact, the prevailing pessimism and 'spiritual surrender' on the timeline may not necessarily be a bad thing.
Mason Nystrom, a partner at Pantera Capital, similarly believes that the pessimistic view of cryptocurrencies and their social value is misguided. Although there are speculative and abusive behaviors in the crypto space, the casino truly exists and is vast, with many losing money at the tables, it also contains substantial, overlooked positive social value.
He explains that Bitcoin has become a global non-sovereign asset that anyone with internet access can hold. It provides a veto/exit mechanism for global citizens, shifting economic control from nations to individuals. Stablecoins provide more efficient and safer financial services for people worldwide, with quicker transfers, higher yields, and lower costs. Banks do not give depositors returns, cross-border remittance fees are high, and e-commerce transactions incur a 2.9% fee, all being reshaped by stablecoins, which bring tangible social value.
Lending platforms like Aave and Morpho allow people from all over the world to access over-collateralized loans. The low-collateral lending market will further release enormous social benefits, reduce capital costs, and create vast positive externalities. Additionally, blockchain will enable global users to access financial products that were previously restricted, such as stocks, bonds, insurance, and credit. Permissionless financing allows any good idea to gain support based on its inherent value. A more transparent, efficient, and low-cost market itself elevates society.
Mason Nystrom also stated that cryptocurrencies are building a whole new financial system; some will build casinos, some will build payment networks, some will build speculative tools, and some will build inclusive credit infrastructure. The new financial system will not be perfect, but it will far surpass the current situation. If one only sees the casino aspect of crypto, perhaps it's time to step back and view the comprehensive benefits that cryptocurrencies have already brought and will continue to bring to society.
The current crypto industry is in a state of emotional low, and Ken's short essay is more of an emotional venting after entrepreneurial setbacks rather than true reflection. There are actually many projects like Aevo that are in trouble, which is precisely the survival of the fittest that the industry is experiencing. Over the past few years, too many projects lacking real value and unable to deliver products have accumulated in the circle; essentially, it is a case of oversupply. The current pain is to squeeze out the previously accumulated bubble.
Forests need regular clearing of deadwood, otherwise decay will spread; the same goes for the crypto industry.
Let those who feel burnt out, lost, or come only for speculation exit naturally, and the air will become clearer. Either change your mindset and face the future anew, or make way for those who are still building. This journey has just begun and is far from over.
This article is a collaborative reprint from: (PANews)
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