Author: Avishay Ovadia (Founder Partner of Collider)

Translation: Shenchao TechFlow

Introduction by Shenchao: Collider is a small Israeli crypto VC, but it reflects some judgments of upstream practitioners in the industry.

Its founder partner Avishay Ovadia wrote an article judging the direction of the crypto industry: the era of retail investors is over, and institutions are not here to "embrace decentralization," but to dismantle and take apart.

They want the efficiency of blockchain, not the ideology of crypto. For entrepreneurs and investors, the old script has failed; the playbook of the digital asset economy has completely changed.

Main Text:

For the past decade, we have been telling ourselves a fairy tale.

We believed that the large-scale adoption of crypto would be an uprising from the bottom up. Ordinary people, retail investors would grow tired of banks, take the orange pill, and migrate to a permissionless utopia.

Last year, this fantasy was permanently disproven.

The influx of visitors was not the users we expected, but gamblers. They were not looking for a new financial system, but for a higher-leverage casino. They traded memecoins, harvested each other, and disappeared into the shadows when the music stopped.

But while retail investors were busy losing money on memecoins, something more important happened. Those "big players," institutions, banks, and payment giants did not exit the stage. They all entered in full.

They are not here because they believe in decentralization. They have discovered that blockchain is the most efficient channel for fund transfers ever. They are not pursuing technological ideals, but profit. Larry Fink recently stated that tokenization is one of the two major trends reshaping financial services. We are no longer discussing a niche market, but a comprehensive transformation of 140 trillion dollars.

The Great Transfer of Power

We handed over the keys to the kingdom ourselves. The infrastructure was built by us, the concepts were validated by us, and then the incumbents came to harvest the territory.

We made a massive mistake of arrogance. Thinking we could change them. Believing that the miracle of Bitcoin could be replicated with any altcoin. Thinking they would eventually buy our useless governance tokens, our hollow L1s and L2s, and play by our rules. Wrong. For institutions, giving up control is not called "progress," it is called suicide. Their business model is built on control.

So they did not come to play in our mud pits. The overwhelming majority of institutions will not join our DAOs, nor do they care about our "community vibes." They are building their own walled gardens, joining ecosystems like Canton, Zero, Tempo, and Kinexys, constructing orchestration layers that connect traditional platforms and new chains. They are using blockchain, tokenization, instant settlement, self-custody, but stripping away the "crypto" layer.

They retained user privacy, data silos, and profits. They took our open-source code, forked our protocol, but did not buy our tokens. Swallowed the technology, spit out the ideology.

The Trajectory of Game Evolution

This game has evolved along a predictable yet chaotic trajectory to today's endpoint.

From 2009 to 2014 was the Bitcoin Craze phase, a small group of cypherpunks toiling on the margins. Then came the Crypto Industry phase, with Ethereum and smart contracts taking center stage. By the bear market of 2018, the narrative shifted to Blockchain Technology, with enterprises attempting to decouple ledgers and assets, but failing. Then arose the spectacular rise and fall of Web3, where NFTs, blockchain gaming, and the creator economy shone brightly, until the FTX crash turned off the lights. In 2024, buoyed by the election year and Trump’s campaign, the crypto industry made a grand return, only to slide into a season of greed, aversion, and toxicity.

Now, in this new bear market, we have finally reached the destination we have been rushing towards: Digital Asset Economy.

This is the terminus. Crypto is no longer an "industry"; it has become a base layer. It is the invisible engine driving the fintech world. It is not crypto gobbling Wall Street, but Wall Street consuming us.

This is Actually Good News

If you are a purist, this feels like betrayal. If you are a strategist, this is where the real money is.

We have finally reached a juncture where trillions of dollars await deployment. We have entered the "Distributor Era." Big money will not move without regulation, without KYC, without permission from the banking system. The DTCC announced it will tokenize assets held by DTC, supporting liquid assets like the Russell 1000 index; this is not a pilot, this is the sound of the gates opening.

We are about to tokenize every asset on earth, from real estate to private credit to government bonds. But most of this will not be completed through decentralized swaps on public chains. It will be done through payment giants and banks.

Controlling the Machine

There are two paths. You can sit in the corner crying that "the spirit of crypto is gone," or you can recognize that we just won the biggest war in financial history. We have convinced the world that this technology works. Now, we need to build for those who actually have the capital to use it.

The future of this industry is not in air tokens. It is embedded in the hard infrastructure servicing new players. It is already in motion today: look at those institutional-grade solutions that have already broadcasted trillions of dollars in transactions on-chain, traded tens of billions between institutions, and tokenized billions of dollars in assets. This is the new application layer.

New Script

It's time to stop being "crypto brothers" and start thinking like veterans of financial technology.

Think about it: if every asset on Earth was tokenized, what competitive advantage would there be in buying your specific "crypto" token? If you can trade any global asset 24/7 through trusted traditional brokers with instant settlement, why would you still send money to offshore exchanges or worry about non-custodial wallets? Why worry about hacks and total loss instead of trading easily and securely through existing financial dashboards?

Entrepreneurs, don’t build things in a vacuum. Before writing the first line of code, run through every distribution channel in the industry chain. Figure out their needs, deeply understand their fears: fear of regulatory crackdowns, fear of losing control, fear of uncontrollable security incidents. What you need to create is something they cannot achieve themselves, but can perfectly integrate into their existing world.

Investors, the old script is dead. The days of early investment in air projects with "low liquidity, high FDV" and then praying for retail to buy in at a hundred times are over. Investing in digital assets has become extremely difficult. We are moving towards a true sales cycle, real utility, and revenue-generating businesses. You should invest in projects that possess real moats in the open-source tech world. 99.99% of tokens are not. Finding targets with strong moats, top teams, real usage, token value accumulation, institutional adoption, reasonable valuations, healthy release curves, active communities, high liquidity, risk management capabilities, and market opportunities is challenging. But it is achievable.

Stop pushing back against institutions. They are the new distribution channels. They will bring the next billion users, bringing in the next 100 trillion dollars into the digital asset economy. Even if these users have no idea they are using blockchain.

The game has changed. The players are bigger. The stakes are higher. Welcome to the terminus. How to proceed is up to you.