On The Purgatory of Crypto While Bitcoin and Ethereum has made progress in winning the game of public acceptance lately, “Web 3” in general has been in an odd purgatory. Despite a historic ETF win for BTC and unprecedented regulatory wins in the US for crypto, many who have been building and investing since 2018-2020 eras have shared feelings of disillusionment. Nobody could quite put a finger on why but it feels like “nothing exciting is happening”. Compared to the cornucopia of unfettered experimentation we saw in the ICO era or DeFi summer - which while not without their fair share of grifts and failures, at least had earnest goals and some semblance of cypherpunk ideals, or even fun. Besides the obvious secular brain drain to AI and general stigma around crypto post FTX, what the market has evolved to value has also played a big role in introducing this general sense of “nothing meaningful is going on”. It’s easy to pinpoint the sorry state the industry is in on “evil VCs” or “memecoin grifters”, but the more holistic explanation is one of incentives. The story progressed like this: “Narratives” were once crafted by teams and investors to generate excitement for tokens, and often the capital herded from these narratives would be re-invested to further the products in a reflexive cycle that drives more demand for the token. This was the crux of the Defi summer of 2020, when market began to care about TVL and fee switches for the first time. Somewhere along the way, however, the market realized narratives could be the products themselves - to the point no products need to exist, only the stories about them. Reference the AI crypto coin meta post GPT in 2023-2024 - how many of the dozens of coins “earned” their valuation based on actual development vs. “I bought it since it’s a proxy for AI”? Majority of market (by coin count, not market cap) caught on to the shell game and became simulacra - copies without originals, performative narratives without actual substance or underlying products, only the pretense of them. Market keeps rewarding them, and so they keep coming. VCs keep piling into the 100th L1 despite no sign of real demand for most of them besides farming bots. Retails kept piling into vapid narratives that latch onto whatever the newest “meta” is. This eventually devolves into nihilism - a “lack of pretense that any of this is supposed to achieve anything”, as an investor aptly - and perhaps pessimistically - puts it when referring to the 2024 memecoin cycle. The crowning moment of this trend was when another investor told you with a straight face that revenue is a “meta”, and not a commercial necessity or even the end goal. There is no solution to this except to let the game run its course and for the pendulum to swing back. Once memecoin grifts lead to massive ruin, bucket shop “VC” funds run out of LPs to grift, and dogmatically “anti-VC” populists are revealed to be orchestrators of games more rigged than the ones they pretend to protest, then Web 3 will make a resurgence. Until then, welcome to the desert of the real, broseph.