There's something happening here
You can always sense it when something is drawing to a close. Not just the changing of a season that will roll back around again next year, but an ending that bears with it true finality. A feeling of: we aren't going back.
That's how I have felt about so many things in technology (and more specifically my chosen field of crypto) over the last 6 months. I won't spill more words here on how AI is permanently transforming everything from how we work to how we think before our very eyes, because if you are paying attention it's obvious. Nor will I dedicate this blog post to being yet another nail in the coffin of the "web3" vision of blockchains for everything from social media to gaming. I won't even mention the recent departures of some of the most long-term builders and investors from the crypto space -- many of whom I have known and thought of as fellow travelers on this adventure for 10+ years.
All of these phenomena are harbingers or symptoms of the fact that something is ending. Perhaps they are both.
But I'm not here to mourn that. In fact, I'm here to celebrate. Everything is changing. We are never going back. And the future (at least with regard to the impact that blockchains will have) so much brighter than it ever has been in this industry's 15 year history.
Blockchain infrastructure is finally growing up and it is finally ready to serve the quadrillion dollar market that it was always designed for: transforming our financial lives, from the highest echelons of Wall Street to the kids on their phone looking to save (and earn) for the very first time.
Information today approaches the speed of light as it moves across the world. Not so for our money, which remains trapped in siloes that are slow to reconcile. The transformation that information underwent on the internet was not just one of speed of transfer, but also one of speed to innovate. The same will happen now for innovation around financial services as blockchain protocols are finally, finally, finally ready to serve them.
There's battle lines being drawn
As the industry matures, there is much we are leaving behind. We are leaving behind memecoins and the notion of magic internet money (well, maybe not completely, but that will stop being the focal point). We are also leaving behind some of the more radical anarchist and cypherpunk values that the crypto industry was founded upon. It's okay. We can hold both idealism and pragmatism in our head at the same time.
As the technology matures, there is a new battle commencing: what should the rails for financial infrastructure and financial innovation look like? This will be a battle about objective metrics (as it always has been): latency, throughput, costs, resilience. But it will also be a conquest to discover and stake claim to new worlds run by AI agents executing in ways we cannot yet imagine. It will be a war for adoption from incumbents and a fight for bringing in the next generation of talent. It will be won by whoever can aggregate the most liquidity.
This is and always has been the real promise of blockchains: one universal orderbook; global compatible payment rails; any asset anywhere.
As my friend @calilyliu put it: "That’s why architecting a chain to protect unification of liquidity is more important than practically anything else."
https://x.com/calilyliu/status/2019404173012328815?s=20
There's a new generation of blockchain protocols that are singularly focused on this, having learned the lessons of the last decade of experimentation. Solana, Monad, Tempo, Zero, Canton, and a handful of others are all contenders in this field.
I may be biased, but I think Espresso - the project I've been working on for the last 5 years - is amongst one of the best positioned for this new era and for the battles to come. It has been explicitly designed to unify liquidity, while offering developers the ability to deeply customize their stack (whether as an L2 or any other app architecture) according to the needs of their users.
I am reflecting on all of this today because, just as it is the end of the beginning for the crypto industry - with the age of imagination and experimentation drawing to a permanent close - it is also the end of the beginning for what we've been building with Espresso.
On the brink
This month, Espresso will complete a major milestone in the company’s life. After 5 years of building and iterating on what the next generation of global financial infrastructure should look like, the Espresso Network will upgrade to decentralized proof-of-stake. This is not about a token launch. While token launches have become increasingly frequent over the last few years, launching a brand new decentralized consensus protocol has remained exceedingly rare (shoutout to Monad, Aptos, Sui, and just a handful of others).
The industry has changed meaningfully in the last 5 years. We have seen the impact of zero interest rates on crypto asset prices – and also the reversal. We have witnessed the rise and subsequent retreat of manias around Web3 gaming and collectibles. We have played a small role in the transformation of the United States government’s stance on crypto. We have endured the implosion of the industry’s biggest and most lauded players. We have avoided tradfi banking crises and we have welcomed the adoption of blockchains by established Wall Street and fintech players.
Through all of this, we have been built on the foundation of two ideas:
Blockchains as financial ledgers hold the power to transform how billions of people interact and transact across quadrillions in assets.
First and second generation blockchains like Bitcoin and Ethereum were not architected in a way that works for large scale adoption by mainstream cohorts of developers, users, or institutions.
Over the last two years, we have deepened our conviction here. We are seeing how stablecoins transform user experiences and business models. Real world assets have never been closer to being “real”. And yet existing chains are not capturing and retaining this activity.
Espresso has been designed and built from day one to solve the problems we experienced first hand trying to build on blockchains like Ethereum. Ethereum has done many things right. One of the most powerful inventions of the last 5 years was that of L2 rollups: L2s remain the most performant and customizable paradigm for developing new Web3 platforms today. They are fast to spin up, much like standard web applications. They do not require bootstrapping a decentralized consensus protocol, because they inherit security from an existing L1. Every web application can run as its own L2 today, and this is ideal from the perspective of performance and customizability.
Espresso began as a set of ideas and experiments on how to fix Ethereum's fragmentation problem amongst its L2 chains, but it has since evolved into a much bigger vision (and product). The image at the top of this article is from July 2023, in Paris, where some of the top minds in consensus, distributed systems, networking, and cryptography came together to consider the challenges Ethereum had in front of it. Even then it was evident that Ethereum is not the best L1 for supporting many chains or execution environments. It is too slow to offer its chains an experience of unified liquidity.
This matters because the original promise of Web3 was to fix our fragmented financial systems. Yet even today, crypto hasn’t delivered on anything like universal interoperability or global liquidity. Assets remain fragmented across isolated chains.
Espresso’s goal is to enable chains to communicate in real time, as one composable system. Orders placed on one chain can be matched and settled against orders on another. Payments on one chain can be synchronized with actions on another.
We have never seen so much demand for what we are building as we do right now. We have adoption from many of the biggest brands in crypto including Celo, Rari Chain, Apechain, Katana, Morph, and Litecoin (LitVM) with many more crypto platforms in the pipeline to be announced soon. We have commitments from several of the largest exchanges to begin reading from Espresso confirmations to grant users instant deposits from their favorite Espresso chains. We have worked with Hyperlane to make instant cross-chain payments available with Espresso, without requiring users to bridge. We are grateful for the partnership of industry leaders like Arbitrum, Caldera, and AltLayer in bringing our solutions to market. Over the last few months we have seen deep interest from institutions in the Espresso value proposition. In 2026, I think we will see the first major companies choose to build their applications as Espresso-native chains.
Nobody's right if everybody's wrong
We've come a long way. Espresso has, but the broader industry has too.
Sentiment is perhaps at an all-time low right now. In all my years of witnessing the chaos of crypto, I can't recall seeing Coinmarketcap's fear and greed index this low. I think this stems from a feeling that the industry was wrong about everything: wrong about "Read Write Own", wrong about "Web3", wrong about airdrops, wrong about relying on the regulatory environment to fix everything.
There's a collective exhaustion of "what are all we doing here?" that emanates from most people I interact with, whether they are a content creator seeking to earn airdrops or an institutional investor with a mandate to deploy billions in capital (to where? they aren't quite sure right now.)
It is only the end if you let it be. There will be a washout right now of people who are done, and that is fine. Healthy even. But for those individuals, teams, and projects who choose to persist, there is a whole new era of adoption (and most importantly impact) that is at last awaiting us.
