Crypto Assets Industry at a Crossroads: Web 3.0 vs Fintech 2.0

In the past year, the Crypto Assets industry has frequently interacted with traditional finance, tech giants, and politicians. The token launched by Trump marks the end of Crypto Assets liquidity, but this is just the beginning. From Pakistan to Bhutan to the Middle East, various events ultimately became the last straw that broke the retail investors.

Crypto Assets industry enters a stagnation period

Humans seem to always struggle to learn lessons. When the Bitcoin spot ETF was approved, many believed that Bitcoin would change the world. However, the prevailing view now is that Bitcoin is merely a mapping asset of M2, unable to combat inflation and preserve value, and after being extracted by the ETF, it has lost its role as a bull market engine.

The calm after the surge of the Trump token is not surprising. Events such as PumpFun's self-rescue, a certain trading platform's wallet taking action, and Boop's true identity have all turned into a farce, and it’s the kind that cannot make a profit.

The crypto assets industry is currently stagnating. Ethereum has struggled to reach above $1500 after dropping from $4000, and has to rely on Risc-V to return to the L1 battlefield. Solana's bet on L1 was made around the time of a collapse on a certain trading platform. SVM L2 or expansion layers are essentially leeching off Solana, while ETH L2 is trouble that Ethereum brought upon itself.

The market patterns we are familiar with no longer exist. Stablecoins are the true currency. Invalid information is eroding the entire market; KOLs, project parties, and exchanges ultimately lead to trading, which is unsolvable. The popularity of KOLs also signifies the end; directing trading is the moment of clearing trust and influence.

VC is facing both collapse and perseverance. Overseas VCs are still laying out plans for the next stage, while isolated Chinese VCs are rapidly moving towards market-making. True innovation may occur in Shenzhen Technology Park, but Chinese founders still need to seek funding in Silicon Valley and Wall Street. However, projects that can meet the demands of the next market phase may not be recognized by the existing investment framework.

The vibrant era of the crypto world, where everyone was solely focused on making money, is gone forever. The ongoing institutionalization has become a shackle, and the crypto world is increasingly resembling traditional industries.

Invention Creates New Demand

I hold a cautiously optimistic attitude towards the Crypto Assets industry. It is no longer a niche field filled with opportunities for quick wealth; practitioners are being massively replaced by the internet and the financial industry. Every crisis gives birth to new asset issuance methods, such as ERC-20 supporting DeFi, NFT supporting BAYC, and now we are in the era of stablecoins.

Interest-bearing stablecoin ( YBS ) has become a new invention and may create new demand. YBS is expected to become a new form of asset issuance. There may be three possible directions in the future:

1. YBS has become a new asset issuance method, and Ethereum has successfully transformed. ETH has surpassed BTC to become the new crypto engine, with Restaking ETH becoming a true currency.

2. YBS becomes a new asset issuance method, but Ethereum declines. YBS is consumed by dollar assets, Fintech 2.0 becomes a reality, and Web 3.0 becomes an illusion.

3. YBS failed to become a new asset issuance method, and Ethereum quickly declined. The blockchain "de-coin and store chain" developed at most into Fintech 1.5.

Currently, exchanges, stablecoins, and public chains are in a three-way balance. A certain trading platform, USDT, and Ethereum form the main characters, while others are suppliers and channels surrounding these three. The battle is focused on the stablecoin field, and YBS may be the answer provided on-chain.

From the perspective of asset issuance volume, Ethereum and Tron dominate, but Solana is still catching up. ETH + ERC-20 USDT still leads. The growth rates of stablecoins across different chains are basically in sync, indicating that they are still an overflow from Ethereum.

YBS must become a new method of asset issuance to transfer the asset attributes of ETH to the currency level. Otherwise, the spring of physical asset tokenization (RWA) will be the winter of the coin circle.

Conclusion

Ethereum only has a technical narrative, and users prefer stablecoins. We hope users will choose YBS over USDT, which is the current contradiction. It is too early to force blockchain payments before YBS, supported by Crypto Assets, becomes mainstream. Payments should be the development direction of YBS.

Crypto Assets should not become Fintech 2.0, but should pave a broader path.