Author: Nancy, PANews
"I have wasted 8 years of my life in the crypto industry."
Ken Chan, co-founder of Aevo, published a post harshly criticizing the crypto industry for having devolved into a "super casino." This "defensive article" quickly went viral in both domestic and international communities. Behind the millions of views, community discussions exploded. Supporters see it as a moment of awakening that pierces the bubble, while opponents believe it is a case of vested interests smashing their own pots.
Setting aside the emotional outburst, this debate reflects the collective anxiety and cyclical confusion in the current industry amid liquidity exhaustion and a narrative vacuum.
Reduced to a Super Casino? What Happened to the Crypto Ecosystem
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 once a staunch believer in the cypherpunk spirit, viewing Bitcoin as "a private bank for the rich." However, after dedicating eight years full-time to this industry, he painfully acknowledges that even though he made money, he still feels that those eight years of youth were completely wasted.
The narrative that practitioners love to repeat is "completely replacing the existing financial system with blockchain," but this is merely a promotional slogan; they are just maintaining the world's largest casino that operates 24/7 with many players online. This cognitive dissonance stems from the complete distortion of the industry's incentive mechanisms. In reality, no one cares about genuine 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 inflated market valuations in the hundreds of billions of dollars.
In fact, there are no longer a few zombie public chains; even emerging high-performance chains that have raised tens of millions or even hundreds of millions of dollars struggle to escape the aftermath of airdrop frenzies and incentive subsidy activities, with very few real users. It's akin to building countless highways in a desert, but with no cities or factories along the way, only a group of speculators flipping land.
Data also corroborates this predicament. According to DeFiLlama, in the past 24 hours, only 15 chains had on-chain DEX trading volumes exceeding ten million, and only four met the criteria of having a million daily active addresses.
On this oversupplied "ghost town" of infrastructure, 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 vibrant MEME culture has been replaced by an industrialized "token issuance assembly line," becoming an extreme PVP on-chain casino; and the frequent interactions of numerous applications are not driven by genuine demand but rather to farm points for airdrops. As Ken puts it, although VCs can write 5,000-word essays depicting grand visions, the reality is that these games are continuously consuming the existing funds of retail and institutional investors.
What makes Ken Chan even more uncomfortable is the industry's subversion of business common sense. Here, making money through token issuance, market making, and harvesting is far easier than refining products. The market is flooded with tokens that have "high FDV and low circulation," and projects with no real income boast valuations in the billions of dollars, while so-called governance tokens are merely liquidity tools for investors to exit. This environment of bad money driving out good not only deprives practitioners of the ability to identify sustainable businesses but also instills a highly toxic "financial nihilism" in the younger generation.
In the current context where traditional assets are out of reach, Generation Z has its own "financial rebellion." According to a recent article in the Financial Times, the worsening housing affordability in the U.S. is profoundly changing the financial and consumption behaviors of Generation Z, even pushing some young people towards cryptocurrency speculation and fostering economic nihilism. Besides cryptocurrencies, trendy stocks, collectible toys, leveraged ETFs, and prediction markets are all part of the financial trends among the youth.
Ken Chan's accusations resonate with many, such as Jason Choi, founder of Tangent, who lamented that we already have countless low-cost/fast blockchains, a loose regulatory framework, massive oversupply of financing since 2017, and thousands of developers delivering smart contracts over the past decade; however, 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, pointed out that this is a sobering reality check for the entire industry. Today, the monthly active users (MAU) in the crypto industry are only about 40 million, while Facebook had 845 million MAU at the time of its IPO, with a market cap of about $100 billion; OpenAI currently has about 800 million MAU, with its latest valuation at $500 billion. To create a $10 trillion asset class, we need at least a billion users.
Crypto KOL YQ also referenced an old article stating that many crypto OGs have chosen to exit after questioning their initial beliefs. In the current cycle, projects with strong speculative attributes like memes, perpetuals, and prediction markets remain resilient, while the value of many infrastructure and social projects becomes increasingly difficult to prove. For startup teams, VCs, traders, and users, this is undoubtedly the most challenging phase, and the market is filled with "pump and dump" schemes relying on leveraged perpetuals to manipulate small caps or old coins. In such an environment, we must acknowledge the facts and accept reality. Whether VCs or entrepreneurs, the only way to survive is to continuously adjust direction and keep delivering products.
Navigating the Crypto Emotional Cycle, "The Forest Needs to Be Cleared of Deadwood"
For many practitioners, Ken Chan's negative sentiment is essentially a typical "pulling up the ladder after getting ashore" mentality.
As a vested interest, he made enough money through the crypto market but turned around to criticize the ladder that made him wealthy as dirty. At the same time, his disdain for financial nihilism overlooks the fact that for countless ordinary people around the world, this bubble-filled market remains one of the few channels for social mobility. Moreover, AEVO's price has dropped over 98% from its historical peak.
Regarding the current developmental challenges of the crypto market, Ken believes the industry is merely idling, but for many builders, this is just an inevitable growing pain of technological development. We cannot deny 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 currencies." Local people rely on them to protect their meager savings from being devoured by hyperinflation; this financial system has effectively served tens of millions.
Meanwhile, Bitcoin is no longer a toy for geeks; it is becoming part of the balance sheets of sovereign wealth funds, national government reserves (like El Salvador and Bhutan), and top hedge funds; Ethereum's technical components have established themselves as global public chain standards and gained recognition from Wall Street capital. Additionally, as assets like stocks, bonds, and real estate accelerate onto the blockchain, financial efficiency is achieving substantial leaps. On the technical front, countless developers are making breakthroughs in cutting-edge fields like zero-knowledge proofs (ZK), censorship-resistant networks, and quantum resistance. These are the real undercurrents behind the noisy crypto market.
In response to the "casino argument," Haseeb, a partner at Dragonfly, pointed out that the crypto space has never lacked casinos. The first blockbuster application on Bitcoin was Satoshi Dice (2012). The first blockbuster smart contract on Ethereum was King of the Ether Throne (2015), which was essentially a Ponzi scheme. Once programmable money was available, what people first did was always to bet and play games; this is human nature. There have always been hot casinos in the crypto world, ICO casinos, 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 glitz of the casino, you will miss the more important stories. He further pointed out that cryptocurrencies are becoming better financial vehicles, reshaping the nature of money and 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 are busy responding; while the scale and value of permissionless financial protocols like Uniswap and AAVE have surpassed many unicorn fintech companies. The world is undergoing profound shifts around cryptocurrencies.
"This transformation is happening slower than many expect, but technological diffusion has always been like this," Haseeb stated. Three years after the launch of ChatGPT, generative AI has yet to manifest in GDP or employment data; the Industrial Revolution took 50 years to truly impact productivity; the internet took over two decades to become widespread. Expecting to replace the world's most tightly regulated financial system in just five years is unrealistic. If you feel frustrated because you participated in a MEME project but did not become wealthy, take a deep breath; the industry owes no one wealth. In fact, the pessimism and "spiritual surrender" on the timeline may not be a bad thing.
Mason Nystrom, a partner at Pantera Capital, also believes that a pessimistic view of cryptocurrencies and their social value is misguided. While there are speculation and abuse in the crypto space, and its casinos are real and large-scale, with many people losing money at the tables, there is also a wealth of overlooked positive social value.
He explained that Bitcoin has become a global non-sovereign asset that anyone with an internet connection can hold. It provides a veto/exit mechanism for people worldwide, transferring economic control from the state to individuals. Stablecoins offer more efficient and secure financial services to people around the world, with faster transactions, higher yields, and lower costs. Banks do not provide returns to depositors, cross-border remittances are costly, and e-commerce transactions incur a 2.9% fee; all of these are being reshaped by stablecoins, which bring tangible social value. Lending platforms like Aave and Morpho enable people worldwide to access over-collateralized loans. The low-collateral lending market will further unleash significant social benefits, reduce capital costs, and create substantial positive externalities. Additionally, blockchain will allow global users to access previously restricted financial products, such as stocks, bonds, insurance, and credit. Permissionless financing allows any good idea to gain support based on its own value. A more transparent, efficient, and low-cost market itself is an enhancement to society.
Mason Nystrom also stated that cryptocurrencies are building a brand 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 state. If one only sees the casino aspect of crypto, perhaps it is time to step back and view the broader perspective of all the benefits that cryptocurrencies have already brought and will continue to bring to society.
The crypto industry is currently in an emotional trough; Ken's short essay is more of an emotional outburst after entrepreneurial setbacks than a reflection. Projects like Aevo that are in trouble are not few, which is precisely the survival of the fittest that the industry is experiencing. Over the past few years, the circle has accumulated too many projects lacking real value and unable to deliver products, which is essentially a surplus of supply. The current pain is about squeezing out the accumulated bubbles.
Forests need to be regularly cleared of deadwood; otherwise, decay will spread, and the crypto industry is no different.
Let those who feel fatigued, lost, or only come for speculation exit naturally, and the air will become clearer. Either change your mindset and look to the future again, or make way for those who are still building. This journey has just begun and is far from over.
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