Author: Ignas Source: ignasdefi Translation: Shan Ouba, Golden Finance

At first glance, the crypto industry It seems to be going very well: After years of rejection, Bitcoin and Ethereum spot ETFs have gone live and are recording record inflows.

Trump’s victory has brought the crypto industry closer to the U.S. establishment, and the crypto lobby is pushing to oust Gensler and other skeptics. The crypto industry is now considered a mature industry, and there are even considerations for including Bitcoin in reserves.

I am very optimistic about crypto asset prices, but most of the upside is driven by external macro factors.

However, I believe the crypto industry’s internal innovation engine is slowing down.

As the industry matures, innovation naturally slows down. However, even if innovation slows, prices are still likely to rise.

But I dare say that slowing down innovation is not the root of the problem; a representation.

The real problem is that our ambitions are fading and risk aversion is increasing.

The crypto industry was once driven by radical ideas aimed at changing the world.

For now, the industry seems content to pursue regulatory approval and institutional adoption.

Don't just listen to me, take a look at what Vitalik said in the blog post "Bringing Ethereum Back to the Cyberpunk Spirit Again" written in 2023:

"We are not just about creating isolated tools and games, but about comprehensively building a more free and open society and economy, where technology, society and Different parts of the economy can fit together.”

Think carefully: What innovations are there in this cycle?

The combination of AI and encryption is considered one.

But AI is an external innovation. Without AI, this cycle might have been different and we might still be focused on trading meme coins.

I'm not a fan of meme coins because their only real goal is to get rich quick rather than really trying to change the world. You make enough money and the problems of the outside world stop bothering you.

Did you notice that we rarely use those slogans from last cycle?

"[Project Name] is the most egalitarian thing we have ever seen. It is so ambitious that it really has the potential to reshape the fabric of society."

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In contrast, the last cycle saw many radical innovations:

• Decentralization Finance (DeFi)

•NFT

•DeFi income farm

•Play and earn games (P2E) similar to Axie Infinity

< p style="text-align: left;">•Metaverse

Today, we seem to lack equally radical ideas and projects.

2020-21 Cycle: The Peak of Tokenomics Innovation

2020-21 The annual cycle is also the peak period of innovation in token economics, with the emergence of Ampleforth, veTokenomics, (3,3) Ponzi mechanism, liquidity mining, SNX as collateral for sUSD, and the stability of multiple algorithms. Coins etc.

Now, project parties and venture capital institutions prefer to adopt the tried and tested simple token model, hoping to avoid risks because they only have one token generation event (TGE) opportunities.

$EIGEN’s subjective consensus token is a rare innovative exception.

It can be said that IC in 2017The O boom marked the pinnacle of ambition in the crypto industry, with bold ideas trying to decentralize everything.

It was a bubble full of fantasy, and many ideas were too crazy to be realized. Most projects died, and those that survived had to cut back on their vision.

In today’s more conservative crypto industry, these crazy ideas from 2017 will have a hard time getting funding.

However, it is these crazy concepts that attract a group of people who dream of a completely different world. People, including me.

I am reading "Boom: The End of Bubbles and Stagnation" by B. Hobart and T. Huber. The book explains that transformative progress often comes from a small group with a unified vision, huge amounts of money, and little accountability.

They concluded that despite the bad reputation of financial bubbles, many past breakthroughs were driven by bubbles and that future progress will be driven by them. .

The era of lack of accountability in the crypto industry is not over yet, but regulation is bringing more risk aversion. Perhaps this cycle is the last chance to drive substantial innovation.

I hope that the bubble combining AI and encryption will spawn at least one or two killer applications.

The Most Ambitious Crypto Projects

This does not mean that ambitious crypto projects do not exist today.

Here are some projects that come to mind:

•Ethena: Fusion of DeFi, CeFi and Traditional Finance (TradFi)

•Chainlink: Build a bridge between blockchain and real-world data for smart contracts to ensure data tamper-proof

< p style="text-align: left;">•Pudgy Penguins: Leading Web3 IP brand, expanding into Web2 space

•WorldCoin: Funding U with potential AIBI allows everyone in the world to be identified on the chain

•Liquity/RAI: the last decentralized stable currency

•Arweave/Filecoin: Providing permanent storage and censorship resistance

•Farcaster/Lens: Reimagining social media

< p style="text-align: left;">•Polymarket: The source of truth in the age of fake news

•Bio Protocol (DeSci): Revolutionizing the scientific field by changing the incentive system

•Bitcoin: Reinventing Currency, Becoming Digital Gold

Maybe you think WorldCoin’s iris-scanning ball is too much Radical, or Liquidity v2’s $BOLD stablecoin won’t make it.

But this is the risk that ambitious protocols are willing to take.

These projects are the most egalitarian things we have ever seen. They are extremely ambitious and, if successful, will literally reshape the fabric of society.

The absence of Ethereum

You may notice that Ethereum does not appear in the above list middle.

Perhaps I'm not being fair to ETH, but Vitalik's vision of "cyberpunk Ethereum" is barely felt on the X platform.

The upcoming fork only provides minor upgrades (at least to non-developers). Ethereum has abandoned sharding and L1 scaling, and the short-term improvements we can expect are limited to a slight increase in block gas limits.

It feels like Ethereum has shifted all execution and ambition to L2.

ETH's "North Star" has still not appeared.

I hope Ethereum can be great again and look forward to the influx of new radical ideasnow.

However, Ethereum seems to have accepted the reality that modular blockchains cannot scale.

Solana, on the other hand, said: "Screw it" and continued to advance the monolithic blockchain model.

Although Network Extensions may ultimately prove that Ethereum’s modular approach is correct, for now, Solana is still boldly exploring forward.

Humanity needs borders and frontiers

The world, especially the West, seems to be stagnating.

This is evident in stagnant wages, new iPhones no longer feel "fresh," and even music has become the same.

We keep seeing remakes of the same movie franchises because launching new movies is riskier than remaking old ones.

In some ways, we are actually regressing. For example, due to the grounding of Concorde, the time to fly from London to New York is now longer than it was in the 1970s.

However, the crypto industry remains one of the fastest-growing and most innovative industries in the world, perhaps second only to artificial intelligence (AI).

But I can’t shake the feeling that our pace and ambition of innovation are declining.

Part of this is due to the maturity of the industry, but we also seem to accept many technical limitations without challenging them.

DeFi and DAO are no longer fully decentralized, it has become acceptable . Rather than truly making DeFi decentralized, we can repackage it as Onchain Finance, problem solved.

It doesn't matter that Ethereum cannot scale at the L1 level and lacks innovation in token economics.

The market cap of $LQTY is much lower than $ENA, indicating that we actually no longer need decentralized stablecoins, and moreA high rate of return is more important.

Perhaps, each cycle is gradually eroding our ambition to push the boundaries, and the crypto industry is becoming more and more boring as a result.

All in all, if the price of our token is going to go up anyway, what's the point of taking the risk?