Original author: Jocy, IOSG Ventures

The unpaid are frozen to death on the road, the soap sellers die of thirst on the way. The weavers wear coarse cloth, the grain growers cannot fill their stomachs.

Today, after meeting an OG, these four sentences jumped to mind, reflecting the feelings of countless practitioners still active on the front lines of Web3. I reposted a tweet I wrote over a year ago as a whistleblower for the industry; although I predicted the outcome correctly, this is not the result any practitioner desires. No one expected this to happen.

But it is happening. No one is willing to speak out. So I dare to voice my thoughts.

Introduction

This week in Shanghai, I visited MuShanghai at Hongqiao, organized by Sun. A month-long event divided into four themed weeks—biotech, AI, culture, robotics. Over 2,000 people signed up globally, with more than 800 attending in person, from Stanford entrepreneurs to former OpenAI engineers, YC, HF0, Jacob from Frontier Tower.

Sun and Sunny, along with a team of twenty volunteers, did something that perhaps only they could do in all of China—integrating visas, international networks, government relations, creating a true global gateway.

Just this achievement alone deserves applause from everyone in the industry. This is the most successful team transitioning from the crypto community to a diversified community. But after a few rounds, I feel mixed emotions. Nearly half of the attendees are from crypto backgrounds.

They are labeled as biotech founders, AI agent builders, robotics entrepreneurs, cultural curators. Some are genuinely exploring their next journey, others are gracefully preparing to leave crypto behind. This is a great self-rescue effort unfolding in the industry— in a way I’ve never seen before.

Main Text

1/ These past two years, I’ve been more pessimistic than ever, but also more unwilling to give up than ever

Recently, I’ve met many people and heard many stories. The problems in this industry are no longer just about the bear market; the entire ecosystem’s positive feedback loop has broken down. I’ve organized these scattered observations, conversations, and reflections. Not to complain, but to hope more people can shoulder this burden together.

2/ "Low-probability bad events" are happening in batches

I’ve been reading probability theory lately. We old-timers are used to understanding markets cyclically—there was an alt season last cycle, and there will be one this cycle. But this year, all the underestimated low-probability events are happening simultaneously: 50–60% of China’s Web3 developers are shifting to AI.

Most who leave probably won’t come back. Hundreds of projects have raised billions of dollars, but few truly breakout applications. Wall Street, Trump, sovereign funds are taking Bitcoin away, native builders’ positions are narrowing. US funds are thriving in fundraising, while Asian ecosystems face survival crises; entrepreneurs are bleeding out, listing and leaving, investors retreating. It’s not that the cycle isn’t coming; the script for this generation’s cycle is completely different from the past.

3/ About Ethereum: I’m not pessimistic, but I’m worried

Ethereum’s reform is long overdue. The best windows—2021’s bull market and 2022’s turning point—were originally the best times to push application innovation and create super apps, with industry’s greatest attention, most funds, and top talent concentrated then. But at that time, the focus was on ZK, L2 narratives.

The technical direction itself isn’t wrong; the mistake was allocating all resources to niche directions at the moment when mainstream products should have appeared. Now in the bear market, pushing a super app again is ten times harder than those two years. The weakness in Ethereum’s price essentially reflects the overall Web3 weakness, because Ethereum carries the most capital, talent, and attention in the industry. Whether it can rise again concerns the future of millions of practitioners.

4/ Vitalik might be living inside a huge information cocoon

A strong recent feeling I have is: most people around Vitalik are afraid to tell him how tough the industry really is, where Ethereum’s real difficulties lie. The groups seeking rent-seeking are growing, and insular cultures are worsening. When new directions and opportunities emerge, they often extend along existing community ties. Ordinary community members and practitioners find it hard to communicate or give feedback to Vitalik normally.

Community dissatisfaction and complaints are filtered through layers, kept out. This isn’t anyone’s fault. It’s a consequence of an organization expanding rapidly beyond 200 people without a matching feedback mechanism. But the cost of boiling frogs in warm water will fall on everyone still building in this ecosystem.

5/ Practitioners lack positive feedback, society and the next generation seem unacknowledged

This is the most genuine shared situation of this generation of practitioners—across borders: in China, the industry is seen as gray-area, often linked with pyramid schemes; in Hong Kong, due to a series of platform collapses, practitioners are defaulted as scammers; in Singapore, crypto is considered an unrespectable industry; in the US, compared to AI entrepreneurs, crypto practitioners almost lack social status.

I hear practitioners say their high school kids refuse to learn wallet private keys, thinking their father’s career is unrespectable. Many founders, as parents, dare not tell their school’s PTA what they do. The next generation simply doesn’t see this as a worthwhile career. When an industry can’t even openly say “I work in it,” the succession problem is no longer abstract—it’s urgent.

6/ The succession problem is arriving

Most first-generation core developers of Ethereum have started families and had children. This is a natural life stage; they can’t code ten hours a day like ten years ago. But where is the next generation? We’ve tried: graduate students, PhDs, engineers from Web2 giants, early community geeks.

But in this booming AI era, what can we do to retain them? Bitmain and ByteDance recruited fresh graduates at the same time, with similar salaries—yet ten years later, their equity returns differ by hundreds of millions.

This younger generation looks at the fate of the previous one—why would they choose crypto over AI? And we’re not just trying to keep the next generation; we’re also competing with AI for talent. Solana, Ethereum, AI labs, robotics companies—all vying in the same pool.

Top crypto projects’ packages are becoming less competitive. Successors won’t grow on their own; they need systematic cultivation: crypto schools, research grants, developer funds, long-term mentorship. Paradigm, a16z, AllianceDAO, ResearchHub are doing this. The Chinese community must do it too.

7/ A little hope for Vitalik

I want to encourage him, because attacking isn’t helpful. Vitalik is the most influential entrepreneur in this industry. He’s not just a chief scientist; he’s a lighthouse guiding the industry. During Ethereum’s critical transformation, he needs to return to the entrepreneurial frontline.

Not the Vitalik of 2014, but the one who has reflected over these years and is returning to his entrepreneurial roots.

The bear market is the best time to build the next generation of products. He needs to rally core developers, the community, and the younger generation to move forward together for the next ten years. He must have people around him who can tell him the real situation directly.

8/ The divergence between Chinese and US OGs: the ecosystem’s ability to generate vitality

Last year, I wrote “You can turn everything into a meme, but cherish this cathedral,” comparing these two paths. Today, I must say again: China’s startup funding environment is extremely harsh. 90% of Asian market-oriented funds are in deep trouble. This means the Asian Web3 ecosystem has no self-sustaining ability.

Once top funds can’t hold up, the entire ecosystem will collapse. The difference in choices between Chinese and US OGs after securing their first big fund is especially stark today. Most US OGs are still building—Rune, Hayden, Juan, these people are continuously reinvesting their wealth into the ecosystem.

Most Chinese OGs, after making money, choose to cash out and leave; some shift to AI investments; fewer are building the next generation. This isn’t moral judgment. I hope Chinese OGs, after benefiting from the industry, will turn back to help the new generation. Building a complete ecosystem and creating positive feedback is the only way for this industry to survive.

9/ How practitioners can survive

Most Web3 companies and institutions will continue to cut over 30% of staff during the upcoming AI wave and pessimistic market, so survival is more important than anything. Returning to personal level after discussing systemic issues—I’m in this mud too, so I want to share a few points. Find your rationale. Why are you still here? Not for token prices, not for KOL traffic.

Because you believe in this, because you’ve benefited from this industry before, because your team and investors need you. Clarify this “why,” and the rest will have direction. Make your work and life fulfilling. The industry’s low tide will seep into your daily emotions.

Don’t let token prices define your self-worth. Read more, meet offline friends, spend more time with family, do things unrelated to the market. This is the most important lesson of the bear market.

Face difficulties head-on, but don’t let disappointment turn into giving up. The current community mood isn’t “crisis awareness,” but “disappointment.” The difference is—crisis awareness means wanting to change, disappointment means wanting to give up. Strive to stay in the former.

Learn new things. I’m also studying AI. Seeing so many crypto practitioners at MuShanghai adopting new labels to explore biotech, AI, robotics, I was genuinely moved. When we have the ability, we can choose; when we don’t, we can only be chosen.

Web3 remains IOSG’s most important business, and we won’t give up. Of course, this doesn’t stop me from using AI to enhance our workflows and strengthen our tools. Find your small alliance and confidence circle—5 or 6 seasoned, proven friends or institutions forming deep alliances.

Education, funding, talent networks—fill in the gaps. Self-rescue is more important than waiting for saviors. Learn to reconcile with yourself. I’m still practicing this myself. This market doesn’t reward those who do the right thing; it rewards scammers 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 the bear market, to feel low, to do “things that seem unproductive.” This isn’t giving up; it’s preparing for the next journey.

10/ We need more lighthouses

The industry’s biggest shortage isn’t money or technology, but lighthouses. Not only Vitalik needs to be a lighthouse. Everyone still here, still believing in this, can be a lighthouse—offer thirty minutes to a confused young founder, a grant to a team running out of runway, a referral to an unemployed engineer, write a sincere reflection instead of a flashy narrative.

Each beam of light doesn’t shine far. But together, they give those still moving forward in the darkness a reason not to give up. People like Sun are doing this. People like Lao Hu quietly support non-mainstream explorations every month. Everyone is working hard in their own way.

11/ A message to everyone reading this

If you are an OG: what the industry has given you, please give back to the next generation. Not necessarily millions, but a mailing list, a referral, a direct call to a market-oriented fund manager, an EIR grant for struggling entrepreneurs.

The younger generation needs to believe “building this is still worth it.” If you’re a founder: don’t fight alone. Tell trusted people about your real situation.

If you’re a builder/researcher: keep building. Not build on love alone, but turn your labor into deserved rewards. Let the next generation believe this profession still makes sense.

12/ Closing remarks

Please share this message with every OG you know. Let them illuminate others. Don’t forget the industry’s past kindness to them. Call on more OGs and industry leaders to regain their sense of responsibility, speak out for the industry, fund more entrepreneurs, and give the next generation a chance to continue building Web3—not just with love.

Whether the casino swallows the cathedral or not isn’t just Vitalik’s or EF’s business. It’s ours—everyone still here.

Many ask how to survive this cycle; all the pressure pushes them to leave. Often, the next step is just one move away. Many young people need an old OG to tell them how to endure the bear market. But I know, if our generation doesn’t stand up, the next won’t even have the option to “stand up.”

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