Written by: Matti, Zee Prime Capital
Compiled by: Yangz, Techub News
Translator's note: Whether you are a veteran who has experienced several cycles or a newcomer to the circle, you must be a little confused when facing the Web3 industry, which is almost always full of hot spots or "opportunities to get rich" after Trump's victory. Sometimes it is a new animal-based Memecoin that is popular because of bigwigs such as Musk and Vitalik, and sometimes it is a thousand-fold myth created by various AI agents. Of course, there are also various positive information that come one after another, such as the funds that continue to flow into the US Bitcoin spot ETF every day; major listed companies led by MicroStrategy continue or begin to build their own "Bitcoin strategic reserves"; and positive regulatory signals such as the Trump team considering establishing the first cryptocurrency policy-related position in the White House.
All of this exudes the smell of a bull market, and Bitcoin is heading for the 100,000 USDT mark. But what is beneath the bull market? Zee Prime Capital’s Matti pointed out the “undercurrent” of the current industry, that “the most entertaining results are most likely to occur” and that “opportunism is the strongest heresy in crypto.”
The following is a translation of the full text.
If you left the cryptocurrency industry in 2022, or if you didn't really leave but were attracted by various surface narratives, hyping Memecoin and chasing possible generational wealth, and occasionally reading some industry articles, then you should want to know what is really going on under the surface. Or, what are you missing?
In this era, two phenomena seem to be enveloping the world.
Musk's razor: The most entertaining outcome is most likely to occur (Note: Occam's razor advocates that when solving a problem, the simplest and most direct explanation or solution should be used as much as possible)
What was once entertaining has become serious, and what was once serious has become entertaining
The first point is obvious. By 2016 standards, it was unthinkable for Musk to run a US department called "DOGE" (Department of Government Efficiency). But now, eight years later, nothing is impossible.
As for the second point, it is actually a reflection of the first point. The US election has become the real season finale of a reality show called "America". Politics has become entertainment, war casualties are broadcast live, movie plots are used to convey agendas, and social media posts can be sued.
One of the little symptoms of "what was once serious has become fun" is money. Memecoin, to be exact. They call it the magical online currency, Funnymoney, and it's a real-time online meme lottery.
Not everyone can become a meme and profit from it, but everyone can get closer to this goal by charging for Memecoin.
Clearly, sovereign states will build up their Bitcoin reserves on a large scale (following a group of innovators such as El Salvador and Bhutan) and will not rush to sell off in August, as Germany did, leaving the public puzzled. In retrospect, it is also clear that one should not expect a country that decides to continue to close nuclear power plants while engaging in a proxy war with its former largest energy supplier to make economically rational decisions.
Meanwhile, Michael Saylor is working to eliminate the root of all bubbles, trying to get Wall Street to beat sovereign nations in this race.
However, these are all Financial Times-style news that readers don’t really care about. What is surging beneath the surface? What has been brewing for a long time and has pried the wheels of the apparent bull market?
If you don’t know who the user is — you are the user
For those in the industry, cryptocurrency has become a lifestyle. It’s scary to admit, but it’s an indisputable fact. This lifestyle is the sum of consuming high-quality goods from various cryptocurrency brands, a lifestyle that repeatedly transfers funds, loses money, but still hopes to "retire gloriously" without any effort. To put it in Mable’s words (maybe not so direct ), it is:
“It’s a way of living where only the ‘now’ and the ‘present’ matter, as the impact of anyone or anything is reflected in almost real time on what we’re experiencing. The concept of an end result is almost obsolete, as the world has truly become an infinite game.”
The crypto industry is moving faster and faster as cycles shift from “seasons” to “weeks.” The so-called “alt season” has now become “alt week.” Narratives are rotating faster than ever, and there are more distractions to choose from.
The cryptocurrency industry has truly entered Kevin Kelly's protopia , where "today's problems are caused by yesterday's technological successes, and the technological solutions to today's problems will cause tomorrow's problems."
Cryptocurrency is in a never-ending state of development. Where once incremental improvements would not show up for a long time, now it only takes a little push, a small amount of liquidity, and an anticipation of political leanings to turn that volume into a financial frenzy.
Everything in crypto is money. It is money, the hyper-financialization of attention. And everyone is a user, even if they don’t know it.
Living in utopia, living in a state of evolution, you don’t even realize you’re living in it because you’re forced to upgrade every day. Even if you don’t think of yourself as a newbie, you’re a newbie every day. “The momentum of technology pushes us to chase the latest technology, and the latest technology always disappears when the next update comes out, so satisfaction keeps slipping away from us.”
In 2017, on-chain trading via order books (hat tip to Ethredelta) was a bad experience and AMMs were considered inefficient. In 2018, the problem was that no one wanted tokens. In 2020, the market realized they could make money on Uniswap by permissionlessly swapping tokens and getting paid while providing liquidity. Crypto has entered a never-ending state of development.
The trend is positive, but it is better to give a " ticker " directly
What I do know is that each time is different, but it’s also not. The difference is that the nuances of each craze are beyond what most people imagine and expect. We can’t predict where it will take us, especially considering that there are so many ecosystems and applications that are developing in various directions.
My most optimistic guess is that the pace of change will increase, certain waves will return again, and path independence will become the most valuable resource for navigating such an environment. The so-called L1 or L2 ecosystem will become less important as the trend becomes application/use case driven.
Of all the current use cases, I’m most excited about the “Proxy” and “DeSci” themes because they complement the existing industries of DeFi and Memecoins. Synergistic dynamics could lead to a Cambrian explosion of new use cases, and while some are more flashy, I’m hopeful that others will bring real change.
If value can flow freely between DeFi, DeSci, and agents, we can truly productize "investment progress" and wrap it in a variety of memes. In this way, it will be self-reinforcing and expand the cryptocurrency market to unforeseen places.
We need cryptocurrencies to facilitate positive-sum games by creating new markets. And this is probably why the big players in the industry are exploring these topics, which can have real-world impacts quickly. It should not be expected by anyone yet that Memecoins will become real-world assets.
It’s important to note that, as with every craze, the demand for genius ideas produces a constant stream of knockoffs, gimmicks, and scams.
The so-called paganism is not actually paganism
The triggers for innovation may only become apparent in retrospect, just as in Progressopia, where the convergence of incremental progress becomes visible for a short time. What follows is that validation blinds people, hunger leads to entitlement, and entitlement eventually develops into hubris.
Bitcoin was the gateway drug to the crypto industry, but it is no longer. At least not for retail investors. Memecoin, as a monetized attention market, is becoming an access point for new users. But they are a momentum trade, not forward-looking in any way. It is shock value replaced by new shock value. No amount of insight could have predicted this. They are as instant as any social media post. They are a new form of media, redefining social media.
Just recently, people realized that it was possible to attach a Memecoin to a vision and give it a real character. GOAT’s connection to The Terminal Of Truth was the first example of a Memecoin being tied to a character of an AI agent. Since then, Luna (the AI agent, not Terra Luna) and Eliza have been added, and while they are expressed in a fairly general way, it’s enough to show that there is a design space that can be experimented with.
A few days ago I found a Memecoin tied to an AI agent that can control robots worldwide, including driving robots and streaming robots (disclaimer: Frodobots is our portfolio company and we hold SAM). If people continue to iterate at this rate, the game will still be fun. This all just proves that this is the peak era of cryptocurrency entertainment. (Meme) coins are the medium people consume.
However, for now, the term "agent" is just a generic embellishment, and it is ultimately a kind of automated "shill". However, it still provides novelty and expands the imagination. In addition to the so-called "cult" commitment, it also forces people to make a certain degree of innovation.
Words like "religious believers" or "cult" are used lightly, but I would say that there is one and only one paganism in the cryptocurrency industry, and that is the belief in "Up only". Strangely enough, it is a religion that maximizes rational economic choices while making irrational financial decisions. And true paganism never calls itself a cult.
So, whether you have been in the industry for the past few years or not, you may have overlooked that cryptocurrency is actually becoming a consumer product. It creates a new medium that allows people to consume in the era of the dopamine economy where attention is fragmented and its value is somewhat fleeting.
All of this is riding on economic and political tailwinds, and the most interesting outcomes go both ways. Fortunes can be lost in an instant, and the greatest opportunities lie in asymmetric outcomes. The most promising things today didn’t look like opportunities yesterday, and the greatest threats are easily overlooked.
Opportunism is the greatest heresy in crypto.
