The fall of crypto actually has little to do with cutting the leeks.

Source: Jiayan Kea

Recently, I had coffee with friends from Stanford, and we talked about Crypto.

This kind of situation is quite typical: VCs, engineers, entrepreneurs, and a few old players. A young person suddenly said:

“Crypto is no longer working; it’s just cutting too many leeks.”

Many people at the table nodded. Sitting next to me was an old OG who has been involved in Crypto for over ten years. He hadn’t spoken until now.

Hearing this, he smiled, put down his coffee, and said:

“The fall of Crypto has nothing to do with cutting leeks.” Everyone was a bit surprised, because the mainstream narrative now is almost always: project teams are greedy, cutting too harshly, ruining the market.

The old OG shook his head and said:

“Cutting leeks has never been the problem; financial markets have been doing it for hundreds of years. The real issue is—wrong underlying logic.”

He pointed out several problems with Crypto.

First: Many people have never seriously read Satoshi Nakamoto’s white paper

The old OG shared an interesting point.

He said sometimes he asks project people: “Have you read the Bitcoin white paper?”

Many say they have. But if he asks, “What’s the most core term in it?” most will say:

Decentralization.

He shook his head and said: “The white paper doesn’t even mention the word decentralization.” Someone at the table checked on their phone, and indeed, it’s not there.

He continued: the words that actually appear repeatedly in the white paper are:

Distributed

About six times.

And the core problem it aims to solve is:

remove the need for a trusted third party

Eliminate the need for a third-party trust institution.

He said this is the true soul of Crypto, not “decentralization,” but a distributed trust structure.

Now many projects haven’t even achieved the most basic distributed architecture.

Nodes are fake.

Governance is fake.

Networks are fake.

And then they keep talking about:

Decentralization.

He said something particularly harsh:

“If you haven’t even achieved distributed, talking about decentralization is like building skyscrapers on the beach.”

Second: Crypto has lost its incremental market

The old OG said that the biggest problem with Crypto isn’t really technology.

It’s the overdrawn narrative about the future.

Over the past decade, the most skilled thing Crypto projects have done is: create expectations.

Every new narrative sounds grand: Web3, Metaverse, GameFi, SocialFi, DeFi—each story seems to aim at reconstructing the world.

The problem is, most projects’ technical capabilities can’t support these narratives.

So a classic situation occurs: expectations are severely overdrawn.

Users keep coming in.

And keep being disappointed.

Gradually, it becomes a familiar story:

The wolf is coming.

When the market no longer believes your story, the incremental users disappear.

The biggest problem with Crypto isn’t a bear market.

It’s:

No new people are coming in.

Third: The community has long stopped believing

The old OG said that many Crypto communities are actually quite interesting now.

On the surface, everyone is enthusiastic, posting daily in groups: GM, WAGMI, To the moon.

But in reality, many core participants are well aware of one thing:

They don’t believe the narrative themselves.

The community’s function has gradually become:

Backward compatibility for new leeks.

Using a bunch of terms:

Tokenomics / Layer2 / Modular / Restaking / Intent / etc.

They surround new entrants.

Many newcomers don’t even understand what these terms mean.

But in this atmosphere, people are easily brainwashed.

The old OG said this is actually a kind of narrative engineering.

But the problem is, the people setting the scene also know it.

So everyone is waiting for an opportunity:

Sell high.

This creates a vicious cycle:

Tell new stories → attract newcomers → pump → sell → tell new stories again.

In the long run, the entire market’s credibility is overdrawn.

Fourth: The technical stage isn’t complete, yet rushing into financialization

The old OG said Crypto has another fatal problem. The technical stage isn’t finished, yet it’s starting to financialize. The normal development path should be:

First, have “infrastructure.”

Then, “applications.”

Finally, “financialization.”

But Crypto is taking the opposite route:

First, issue tokens.

First, do finance.

First, trade.

Then, improve the technology gradually.

The result is: many things aren’t mature yet, but they are already priced by capital markets.

When real capabilities can’t keep up with the prices,

projects will be constantly discredited.

Markets might forgive it once or twice.

But when discrediting becomes normal,

trust is lost.

Fifth: Attention is shifting away from Crypto, unnoticed

He ended with something many people haven’t realized: human attention is migrating.

Over the past decade, the biggest attention structure on the internet has been:

Interactions between people, social media, communities, DAOs.

But now, a change is happening:

More and more attention is shifting

to interactions between humans and AI.

You see, many people’s time now isn’t spent in Telegram groups or Discord.

It’s in conversations with AI.

When the attention structure shifts,

many ecosystems that rely on community hype

will naturally decline.

Crypto is largely a attention-driven market. When attention decreases, incremental growth naturally disappears.

As the dinner is about to end, someone asks:

“Do you think Crypto is over?”

The old OG thought for a moment and said something quite interesting:

“Crypto isn’t over, but this generation’s narrative has ended.”

Then he added:

“The real problem has never been cutting leeks.”

Financial markets will always cut leeks.

Stocks do, forex does, AI will in the future too.

Cutting leeks isn’t the problem.

The problem is: no new leeks are coming in.

He said the biggest tragedy in Crypto is actually very simple:

When the technology isn’t mature,

the story of the next twenty years,

is told in just three years.

Once the story is told,

people disperse.