Conversations #22 - Slowly then all at once

For years, early crypto evangelists predicted the arrival of institutions. Decentralisation was the future and every financial service company would submit. DeFi was the future. Then Terra happened, and FTX, and the Silicon Valley Bank bankruptcy. The industry was deeply challenged, most protocols died. 

The best of us survived and honed their market fit. Today a very small number of protocols like Aave, Maker, Hyperliquid, Pendle, are now thriving. Most of the others remaining alive are struggling to adapt their vision to the new game. Institutions are here, but not the way cypher punks would have wished. Intermediaries are rebranded as risk managers, regulation is catching up (Genius Act, MicA…). Crypto exposed institutions are not led by boomers, but crypto natives who graduated from solo farming to institutional allocation, protocols are now focusing on large accounts instead of retail. Furthermore, new ideas are unlikely to create a market leader. The barrier to entry (cost of development, audit, bootstrapping liquidity) are high enough that unless you raise several million dollars, you are unlikely to ever get to market. Truly great ideas will grab the attention of market leaders, who will outpace you with their large resources and network effects and scale your idea faster than you. 

If you hang around the DeFi crowd, you'll hear about the coming bull market. This is not happening. Euphoria is cyclical but doesn't reappear at the exact same place. After DeFi on Ethereum, it was time for memecoins on Solana, now is the time bitcoin treasuries on the stock market. This doesn't mean DeFi is dead. Aave is at TVL and borrowing ATH, with multiple orders of magnitude of growth incoming with v4, Hyperliquid is challenge CEXs, Robinhood is tokenising the stock market, the biggest hedge funds are tokenising their vehicles. The future is onchain. You're just not part of it.