CT is different. Crypto is different. I've been around for a long time in the magic internet money space, and I don't think it's ever felt this "bad."
When I say "bad" I don't mean prices. I don't even mean lack of interest or dearth of innovation (even though you could argue both of those feel real-ish for crypto natives) - the numbers simply don't agree. Globally more people have crypto exposure than ever and institutions are rushing to build things in blockspace.
What I mean is this - CT used to be the lifeblood of this industry. It used to be the cultural center for all things crypto. And it's basically on life support at this point...and I think that's because of a rampant moral hazard (and associated negative externalities) problem that has slowly diseased it from the inside out for years now...and we're finally starting to see the results.
I think there's 3 existential problems that will basically end the CT-side of crypto if they aren't addressed. And frankly I don't have much confidence that they'll be addressed...because they primarily stem from the base selfishness at the core of human nature.
Anyway - here they are:
Insanely aggressive monetization with no short-term negative effects for the monetizer
Tokens have an intrinsic value of 0, but token sellers keep acting like their tokens are worth a billion dollars (and were happy to peddle that notion until retail liquidity ceased to exist)
Extreme PvP as the norm rather than short-burst playing conditions
1) Egregious Monetization.
You've all seen it. I've seen it. We all painfully aware of (and exposed to) it.
There are some "creators" that purely exist to do paid promo these days. There are also way too many people that call themselves "creators" because it somehow makes them believe they're entitled compensation for posting.
I think that's always been a hallmark of the space (payment for promo) but it used to be much less *obvious* (for a variety of reasons) and also seemed less egregious (because the things being shilled generally at least had some upside potential due to immature markets).
It's a worrying trend to me. To put it bluntly, just about every single deal you see someone take in CT I am offered. I turn down the *VAST MAJORITY* of these deals because I generally speaking try to only highlight things that either feel like they have 1) asymmetric upside, 2) extremely little (or no) risk, or 3) are for products/companies I respect and/or use on a regular basis.
The problem? There is no benefit to operating this way. Sure, I feel "good" about mindful monetization and ethics, but to be frank, there is no financial upside to this type of behavior. The same accounts indiscriminately take every deal that comes across their desk...and nobody seems to care...and there's no 'reward' for being measured here. Unfortunately, this aggressive monetization hurts all of CT because 1) it lumps everyone who ever takes deals into the same bin and 2) it brings down the hammer eventually (like the killing of InfoFi) and removes potentially good things that are being abused.
Realizing that, the result is obvious -> race to the bottom. The rational choice is to monetize as aggressively and quickly as possible because everyone else is, there's no obvious short term downside, and it's only a matter of time before the banhammer comes (and the opportunities dry up). Textbook negative externalities.
That's an extremely negative feedback cycle, but it's pretty obvious that's what has happened over the last year.
The solution? Have leaders be much more measured about what they're willing to promote for money. But that's not going to happen....so idk. Bad spot to be in.
2) Most tokens have a fair value of 0...but promoters continue pretending the fair value is >$100m
We used to have an industry where tokens were grossly overvalued, but they still had crazy upside at launch (ICOs).
We now have an industry where tokens are even more grossly overvalued...and they have basically no upside at launch.
I've seen people bend over backwards in Olympic-level mental gymnastics trying to call out what the problems are with TGEs. The takes are wide ranging - two of my favorite (incorrect) takes:
Airdrops are dumb!!
The Timing is Bad!!
The actual problem with TGEs? Dogshit product launched at a completely indefensible valuation.
That's the issue. Launch a product at a reasonable value with success/failure actually meaningfully tied to token price (idk how you do this - that's your job to figure out if you're wanting to TGE). And don't launch a token that has a fair value of 0 and then be surprised when it inevitably slow marches (or fast) straight to 0.
The moral hazard here is that many teams/founders/early investors are all *aware* that their product is dogshit or their token has 0 value, but they're able (and willing) to raise at hilariously elevated values, and then engineer "smart" exit strategies to dump locked tokens OTC at steep discounts to funding round valuations...and generally haven't faced consequences for doing so....all while taking nice salaries.
This has gone unchecked for years. The market has finally been depleted of speculative capital willing to chance these sort of things and all charts are down only....which means there's basically no reason to get excited about new token launches....which means no interesting content about token launches or new products....which leads back to problem 1 above.
3) Extreme PvP playing conditions.
I can't put an exact finger on it, but the switch flipped at some point in crypto (as it has many times before) from extreme opportunity to extreme scarcity mindset. I think this wave started with the TRUMP/MELANIA double-tap to the dome for all onchain traders about a year ago with the tactical LIBRA nuke finishing it off.
Overnight almost the entire space went from "let the good times roll" extremely risk-on behavior top-blasting money into charts and enjoying the game to serial deploying (parasitic, no-risk behavior), bundling, and scamming for a couple $100/day, mostly resembling a rusty knife fight on Skid Row.
The negative externalities here show up in serial deploying (and scamming from anon accounts).
Big runner? Don't buy the coin. Deploy 50 identical vamp coins and see if one of them takes off. No risk. All the upside.
Want to make some money in an underhanded way? Go for it. The space currently lauds people who vaguely scam and P&D (and own it), but crucifies generally good actors who slip up and make a mistake. That's so fucking backwards, but it's how the masses here act.
The behavioral implication is this - look after yourself above all else....we are so far past WAGMI that it's hard to imagine a time where people actually believed that was a thing.
A little more pessimistic ico than usual, but I've been feeling pretty down lately about the state of play here on CT.
It might be salvageable, but I'm not optimistic.
-ico
