Author: Jocy@IOSGVC

Those carrying firewood freeze to death on the road, and those selling brocade die of thirst on the roadside. Those who weave brocade wear coarse cloth, and those who grow grain go hungry.

After meeting with an OG today, these four sentences jumped off my page, reflecting the sentiments of countless practitioners still active on the front lines of Web3. I shared a tweet I wrote over a year ago as a whistleblower, and while the prediction was correct, this is not the outcome any practitioner wanted. Nobody expected this to happen. But it is happening. Nobody was willing to speak out. So I'm taking the liberty of speaking out.

Introduction

This week in Shanghai, I attended MuShanghai, an event Sun Microsystems held in Hongqiao. It was a month-long event divided into four themed weeks: biotech, AI, culture, and robotics. Over 2,000 people registered globally, and ultimately over 800 were selected to attend in person, ranging from Stanford entrepreneurs to Jacob, a former OpenAI engineer, Y Combinator, HFO, and Frontier Tower executive.

Sun, Sunny, and a volunteer team of twenty people accomplished something that probably only they could do in all of China—connecting visas, international networks, and government relations to create a truly global gateway.

That alone deserves applause from everyone in the industry. This is one of the most successful teams to transition from a crypto community to a more diverse one. But after walking around a few times, my feelings were complex. Nearly half of the attendees had a crypto background.

The new labels attached to them are biotech founder, AI agent builder, robotics entrepreneur, and cultural curator. Some are genuinely exploring the next chapter of their journey, while others are making a dignified exit from crypto. This is a great self-rescue that the industry is undertaking—in a way I've never seen before.

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1/ In the past two years, I have been more pessimistic than ever before, but also more unwilling to give up than ever before.

I've met with many people and heard many stories lately. The problem in this industry is no longer just a bear market issue; it's that the positive feedback mechanism of the entire ecosystem has broken down. I've compiled these scattered observations, conversations, and reflections. This isn't a complaint, but a hope that more people will join forces to address this issue.

2/ "Low-probability bad events" are happening in large numbers.

I've been reading probability theory lately. We older folks are used to understanding the market through cycles—the last cycle had an alt season, and this cycle will have one too. But this year, all the previously underestimated low-probability events are happening simultaneously: 50-60% of China's top Web3 developers have moved into AI.

Those who leave will basically never come back. Thousands of projects have raised tens of billions of dollars, but few have truly broken out of their niche. Wall Street, Trump, and sovereign wealth funds have taken away Bitcoin, and the position of native builders is becoming increasingly narrow. US fund raising is booming, while the Asian ecosystem is facing a survival crisis. Entrepreneurs are bleeding money to list their tokens and leave the market, and investors are withdrawing. It's not that the cycle hasn't arrived; it's that the script for this generation of cycles is completely different from the past.

3/ Regarding Ethereum: I'm not pessimistic, but I'm worried.

Ethereum's reform has reached a critical point. The best windows of opportunity in the past—the bull market of 2021 and the turning point of 2022—were the perfect time to drive application innovation and create super applications. The industry's greatest attention, the most money, and the best talent were all concentrated in those windows. But at that time, the focus was placed on technological narratives like ZK and L2.

The technology itself wasn't wrong; the mistake was focusing all resources on a niche area at the very time when mass-market products should have been emerging. Now that we're in a bear market, launching a super app is ten times harder than it was two years ago. Ethereum's price weakness is essentially a reflection of the weakness of the entire Web3 ecosystem. This is because Ethereum carries the most capital, the most talent, and the most attention in the industry. Its ability to recover is crucial to the future of millions of professionals in the field.

4/ Vitalik may be living in a giant information cocoon.

My strong recent observation is that most people surrounding Vitalik are hesitant to directly tell him how difficult the industry is or what the real challenges are for Ethereum. There's a growing number of groups seeking personal gain, and a thriving culture of small cliques and factions. New directions and opportunities often emerge by extending outwards along the existing ties of those cliques. Ordinary members of the community and industry professionals rarely have the opportunity to have normal communication with Vitalik or to provide feedback.

Community discontent and complaints were filtered out at every level. This isn't anyone's fault. It's because an organization, after rapidly expanding to 200+ people, failed to develop a proper feedback mechanism. But the cost of this gradual, insidious growth will ultimately fall on everyone still building within this ecosystem.

5/ Practitioners lack positive feedback, and society and the next generation seem to disapprove.

This is the most realistic common situation for this generation of practitioners, spanning geographical boundaries: In China, the industry is positioned as a gray industry and is often associated with pyramid schemes; in Hong Kong, due to a series of exchange collapses, practitioners are implicitly regarded as scammers; in Singapore, crypto is considered a low-class industry; in the United States, compared to AI entrepreneurs, crypto practitioners have almost no social identity.

I've heard people in the industry say their high school kids don't want to learn about wallet private keys, thinking their fathers' business is beneath them. Many founders, as parents, are too ashamed to talk about what they do at school parent-teacher meetings. The next generation simply doesn't see it as a worthwhile career. When an industry can't even bring itself to say "I'm in it," the issue of succession is no longer abstract; it's urgent.

6/ The issue of succession is emerging.

Most of Ethereum's first-generation core developers have started families and have children. This is a very natural stage of life, and they can no longer write code for more than ten hours a day as they did ten years ago. But where is the next generation? We've tried: graduate and doctoral students from universities, engineers from major Web2 companies, and geeks from the early community. But in this booming era of AI, what can we offer to retain them? Bitmain and ByteDance hired fresh graduates at the same time, with similar salaries—10 years later, the equity returns differed by tens of millions.

Seeing the fate of the previous generation, why would this generation of young people choose crypto over AI? Moreover, we not only need to retain the next generation, but we also need to directly compete with AI for talent. Solana, Ethereum, AI labs, and robotics companies are all vying for talent in the same pool.

The packages offered by top-tier crypto projects are becoming increasingly competitive. Successors won't magically appear; they require systematic cultivation: crypto schools, research grants, developer funding, and long-term mentorship mechanisms. Paradigm, a16z, AllianceDAO, and ResearchHub are doing this. Someone in the Chinese-speaking world must also be doing it.

7/ Some expectations for Vitalik

I want to address this with encouragement because attacks are pointless. Vitalik is one of the most influential entrepreneurs in the industry. He's not just a chief scientist; he's a beacon of direction for the industry. At this crucial juncture for Ethereum's transformation, he needs to return to the forefront of entrepreneurship. Not to return to the person he was in 2014, but to return with the reflections of these years and to his original entrepreneurial spirit.

A bear market is the perfect time to build the next generation of products. He needs to reunite the core developers, the community, and the younger generation to move towards the next decade. He needs people around him who can tell him the truth directly.

8/ The Bifurcation of OGs in China and the US: The Self-Sustaining Capacity of the Ecosystem

Last year I wrote "Don't Let the Casino Devour the Cathedral," comparing these two paths. Today I must reiterate: the financing environment for Chinese startups is extremely challenging. 90% of Asian market-based funds are struggling financially. This means the Asian Web3 ecosystem lacks the ability to generate its own revenue. Once the top few funds can't sustain it, the entire ecosystem will collapse. The difference in choices made by OGs (Original Gurus) in China and the US after securing their initial industry funding is particularly glaring today. Most American OGs are still building—Rune, Hayden, Juan, and others are continuously reinvesting their wealth back into the ecosystem.

Most of China's established professionals (OGs) choose to cash out and leave after making money, some invest in AI, and even fewer are truly building the next generation. This isn't about moral condemnation. I hope that after benefiting from the industry, Chinese OGs will turn around and help the next generation of young people. Building a healthy ecosystem and creating a positive feedback loop is the only way for this industry to survive.

9/ How do practitioners survive?

Most Web3 companies and organizations will continue to lay off more than 30% of their staff amid the upcoming AI wave and pessimistic market conditions, so survival is paramount. Having discussed systemic issues, let's return to the individual. I'm also in this quagmire, so I'd like to share a few points. Find rationality. Why are you still here? Not for token price, not for KOL traffic.

It's because you believe in this, because you've benefited from this industry in the past, and because your team and investors need you. Figure out this "why," and the rest will have direction. Make your work and life fulfilling. The industry's low morale will permeate your daily emotions. Don't let token prices define your self-worth. Read more books, meet with offline friends, spend more time with family, and do things unrelated to the market. This is the most important lesson to learn in a bear market.

Face the difficulties head-on, but don't let disappointment fester into giving up. The current sentiment in the community isn't "crisis," it's "disappointment." The difference is—crisis means wanting to change, disappointment means wanting to give up. Strive to stay in the former.

Learning new things. I'm learning AI myself. This week at MuShanghai, seeing so many crypto professionals taking on new labels to explore biotech, AI, and robotics actually moved me. If you have the ability, you can choose; if you don't, you can only be chosen.

Web3 remains IOSG's most important business, and we won't abandon it. Of course, this doesn't stop me from using AI to equip and improve our workflows and strengthen our capabilities. Find your own small alliances and confident groups. Form deep alliances with 5-6 proven, established friends/organizations.

Education, funding, talent networks—fill in the gaps. Self-help is more important than waiting for a savior. Learn to make peace with yourself. I'm still practicing this myself. This market doesn't reward those who do the right thing; it rewards a bunch of swindlers and speculators. That's a fact. But the meaning of what you do shouldn't be priced by the market. Allow yourself to fail in a bear market, allow yourself to feel down, allow yourself to do things that "seem unproductive." This isn't giving up; it's preparing for the next journey.

10/We need more lighthouses

What the industry lacks most is not money, not technology, but a beacon. Vitalik isn't the only one who needs to be a beacon. Everyone who remains here and still believes in this can be a beacon—give a confused young founder thirty minutes, give a team hitting rock bottom a grant, give a laid-off engineer a referral, write a sincere reflection instead of a flowery narrative.

Each ray of light shines only a short distance. But together, they are the reason why those who continue to move forward in the darkness do not give up. People like Sun are doing this. People like Lao Hu are quietly contributing money every month to support those unconventional explorations. Everyone is striving in what they can do.

11/ A message to everyone who sees this content

If you're an OG: Give back to the next generation what the industry has given you. It's not about millions; it's about a mailing list, a referral, a direct transfer to a market-based fund manager, and an EIR grant for struggling entrepreneurs. The younger generation needs to believe that "building is still worthwhile." If you're a founder: Don't fight alone. Tell trustworthy people about your true situation.

If you are a builder/researcher: Keep building. Not the kind of building done out of love, but the kind where you get your labor rightfully rewarded. Let the next generation believe that this still holds true professionally.

12/Finale

Please, everyone who sees this, forward it to the OGs you know. Let them illuminate others. Don't forget the benefits this industry has given them in the past. Let's call on more OGs and industry leaders to rediscover their sense of responsibility, speak up for the industry, fund more entrepreneurs, and give the next generation the opportunity to continue building Web3—not just with love. Whether the casino swallows up the cathedral is not just Vitalik's business, nor is it just EF's business. It's the business of every one of us who is still here.

Many people have asked me how they survived this cycle. All the pressure pushed them to leave the market. Often, the choice was just a matter of a single step. Many young people need an old OG to tell them how to get through a bear market. But I know that if our generation doesn't step up, the next generation won't even have the option to "step up."

Do what you can, however small.

A16Z-related whales bought another 260,000 HYPE tokens, accumulating a floating profit of $33 million.

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