Author: Boo@Foresight X
The crypto industry has been around for fourteen years. This is a new historical stage where one side finishes singing and another takes the stage. In each cycle, there are giants falling and newcomers becoming kings. Being in this industry, one can’t help but think about what remains unchanged. This unchanging rule, perhaps shaped by the accumulation of history, has now become the popular term “Crypto Native”. This term is popular in the primary market and is a common reason for rejecting a case. So what is Crypto Native?
Having Web3 experience does not necessarily mean being Crypto Native. In the current cycle, newcomers are dominating. Just in this cycle alone, we have experienced the transitions from DeFi summer to Polkadot summer to Gamefi summer to NFT summer to Solana summer to Alt L1 summer to Mass adoption summer to LSD summer.
Being orthodox also does not necessarily mean being Crypto Native. With Vitalik Buterin as the central figure, the narrative threshold is getting higher, giving rise to L2 summer and LSD summer. This orthodoxy, over time, cannot always be the main stage of the narrative. No one can truly become a god, except for Satoshi Nakamoto.
- In-depth analysis of the LSDFi star project Pendle Achieving eating tomorrow’s food today for users through interest separation.
- EigenLayer Completely Changing Decentralized Trust through Re-Staking
- Tom Emmer House legislator, a major ‘dove’ in the cryptocurrency industry
In the end, the crypto bull market is an overflow of US dollar liquidity, and Native does not create externalities. Hot money from the US dollar flows into crypto, hot money from BTC flows into ETH, hot money from ETH flows into the DeFi/NFT ecosystem, and hot money from the industry flows into Alt L1/L2. When the bear market comes, all the money flows back into BTC, and the increment of externally minted stablecoins in US dollars also suddenly decreases. This cycle repeats endlessly. In this feast of capital flow, it is difficult to define native itself. Money and people flow in cycles with the market, never stopping, and the intermediaries that facilitate this flow, such as centralized exchanges (CEX), are becoming increasingly dominant. In my opinion, CEX means Crypto Native.
Leaving aside public chains and CEX, let’s go back to applications. What does Crypto Native mean?
Let me provide three team characteristics that I believe can demonstrate Crypto Native:
No.1 The ability and courage to build a community from the bottom up.
This is not strongly related to crypto experience. Many top Web3 project founders did not have relevant experience before. Adam from Uniswap was a mechanical engineer, the two founders of CryptoPunks were traditional computer engineers, the founder of Solana was an electrical engineer, Jerry from StepN was previously involved in construction, and so on. The wind starts from humble beginnings, and looking back at past founders, they often started small but had strong resilience, gradually building a community step by step.
- Building a community from the bottom up requires courage, determination, love, and belief. These qualities are not related to experience or endorsement.
- Negative examples include directly transforming and migrating existing Web2 users and business models, big Web3 companies launching projects with great fanfare but eventually fading away, and following VC narratives that complicate and abstract simple problems.
No.2 The ability to iterate products quickly based on user needs.
The slow formation and exponential growth of a community often occurs suddenly, and the key to achieving exponential growth is the product. User demand and product iteration go hand in hand, constantly iterating, and it is only when a certain user threshold is reached that product demand can be determined. We need to have the courage to launch tokens and release rough and crude products. Through real community feedback and connections, demand can be created or previously unmet needs can be discovered.
- Graph and Chainlink, as successful infrastructures in the previous cycle, dared to introduce Tokenomics to decentralize and network the supply-side infra services, rediscovering and meeting new demands. Sushiswap’s vampire attack, StepN’s mining token GST, and LSD summer’s Lybra all supported token trading early on in their product launches.
- Compromise: Giving up community building for the C side or network node construction, giving up Tokenomics, and focusing on heavy BD for SaaS services based on existing demands from the previous cycle.
No.3 Understanding capital (Ponzi), respecting capital. Whether crypto is recognized or not, looking back over the past four weeks, besides Crypto, which other industry has the effect of wealth redistribution? Which other industry’s heroes do not care about their origins? We need to respect the flow of capital and understand the role of Ponzi schemes in wealth redistribution. What should we do when Ponzi schemes disappear? Their disappearance is for the next cycle of greater prosperity and bubbles. This is determined by the inevitability of historical cyclical laws.
- DeFi: GMX has gone through six iterations of Ponzi schemes and launched several new projects to achieve its current status. The GNS v2 pool model iteration has returned to degen gameplay, reducing the arrogance of early financial elites. From YFI to Curve War to RDNT, the so-called DeFi Native is about bold trial and error with tokens.
- GameFi/NFT: Axie, StepN, Opensea all started small and were not successful Ponzi schemes from the beginning. The team was a grassroots team. The essence of the Crypto Native spirit is nothing more than taking it step by step and persevering until success.
- Negative example: Taking Web2’s user experience, user retention time, and protocol revenue as the key indicators of a product. However, as with the Hook project, which is a simple platform for making money by answering questions, the highest monthly earnings for an individual is $9, making it the top platform in Indonesia. The reason it was listed on Binance is that CEX and retail investors were willing to buy the data during that market, even if it was artificially generated. In that market, funds needed new speculative targets.
Whether native or not, it ultimately depends on the stage. As practitioners, we need to have the courage to face the community and create new demands within the community. We need to embrace new product models and support new ideas. History moves forward, and as Mao Zedong once said, “The past grows more distant with each passing day; we must brandish our whips like Wei Wu.” We need to be cautious about past crypto experiences, as what we do is ultimately just a drop in the ocean, insignificant.