The "One Big Thing" is that the crypto industry, as a self-referential, incentive-driven subculture, is dying, but this death is a necessary and positive evolution towards mass adoption. The future of crypto lies in its underlying technology becoming an invisible utility, much like cloud computing, enabling real-world applications for a broad "middle class" of users who care about utility, not crypto-native culture or speculative schemes.
The Demise of Crypto-Native Go-to-Market Strategies:
- Quote 1: "The mistake a lot of builders have made is that the product is the Ponzi. And that is it. And when you ask someone what happens after their after the scheme dries up, there's not really a good answer."
- Quote 2: "I pretty largely believe we've saturated that market. Like I think over the last several years, for the most part, the people who've wanted to come on chain and do the things that a lot of people on chain have been doing have done that."
The Rise of "Invisible Crypto" and Utility-First Adoption:
- Quote 3: "People didn't build on cloud because they think cloud is like the coolest thing in the world... they used it because it fundamentally unlocked things that existing technologies couldn't do for them."
- Quote 4: "The second that people start building on chain without ever having the conscious thought of, 'I am a crypto-native builder,' is a huge win, and the second that people start using our technology without ever thinking about, 'I'm touching crypto or being on chain,' is also a huge win."
The Emergence of a "Middle Class" User Base and Diversified Products:
- Quote 5: "I would put the middle class of users... closer to the early adopters phase where they are more technology savvy... they don't really want to be in the super niche culture that is crypto."
- Quote 6: "Robinhood... offer a diversified suite of products. Like they have retirement products, they have a savings product now. They aren't just focused on hyper speculation and hyper financialization."
Key Takeaways:
- Strategic Implication: The "four-year cycle" driven by speculative behavior is likely dead. The industry's maturation will be marked by sustainable business models, not just macro-driven asset prices.
- Builder/Investor Note: Prioritize utility and user experience over tokenomics and crypto-native branding. Invest in projects solving real-world problems for a broad audience, not just those chasing the next airdrop.
- The "So What?": The next 6-12 months will see a continued shift towards applications that abstract away blockchain complexity, making crypto an invisible, powerful backend for mainstream products.
For Investors:
- Warning: Avoid projects whose primary value proposition is an incentive scheme (airdrop farm, liquidity mining program) without a clear, sustainable business model beyond that. These are "the game of the past."
- Opportunity: Seek out companies focusing on real-world utility, seamless UX, and broad market appeal, even if they don't explicitly brand as "crypto." Look for those targeting the "middle class" user with diversified product offerings.
- Strategic Shift: The four-year cycle may be dead. Invest in companies building sustainable micro-economies, not just macro-driven speculative assets.
For Builders:
- Action: Prioritize product-market fit and user experience over crypto-native branding. Build applications that solve problems and offer clear advantages over existing solutions, regardless of the underlying tech.
- Action: Expand go-to-market beyond crypto Twitter. Utilize mainstream social media and traditional marketing channels to reach a wider audience.
- Action: Consider the "DeFi mullet" strategy or other approaches that abstract away blockchain complexity for the end-user, while retaining core benefits.
- Warning: Do not build "products as Ponzis." Develop sustainable business models that generate value independently of token emissions.
- Opportunity: Focus on the "middle class" user. What do they need? How can crypto's core unlocks (global accessibility, immediate settlement, self-custody) serve them in a user-friendly way?
New Podcast Alert: Why Crypto as a Subculture Is Dying, but Why That's a Good Thing
By Unchained
The crypto industry, as a self-referential subculture, is fading. This isn't a bug; it's a feature. Douggee Duca, investor and researcher at Figment Capital, argues this evolution is necessary for mass adoption, shifting crypto from niche speculation to invisible utility.
The Incentive Treadmill Stops
- "The mistake a lot of builders have made is that the product is the Ponzi. And that is it. And when you ask someone what happens after their after the scheme dries up, there's not really a good answer."
- Ephemeral Engagement: Relying on token emissions, points, and airdrops creates a user base that leaves when incentives dry up. This model is unsustainable.
- Saturated Niche: The market for "chronically online" crypto natives chasing high yields is largely tapped. New growth requires a different approach.
- Reputational Drag: This "product as Ponzi" perception alienates mainstream users, reinforcing negative stereotypes.
Invisible Tech, Visible Utility
- "People didn't build on cloud because they think cloud is like the coolest thing in the world... they used it because it fundamentally unlocked things that existing technologies couldn't do for them."
- Cloud Computing Parallel: Crypto's future mirrors cloud adoption. People use Netflix without thinking about AWS; they will use applications powered by blockchain without thinking about the blockchain itself.
- Focus on Unlocks: Successful products will emphasize efficiency and superior user experience, not "Web3" branding. The label "crypto" can be a deterrent.
- UX as Onramp: Innovations like Apple Pay-based onboarding (e.g., Moonshot) demonstrate how seamless user experience can onboard non-crypto users to on-chain assets.
The "Middle Class" User Emerges
- "I would put the middle class of users... closer to the early adopters phase where they are more technology savvy... they don't really want to be in the super niche culture that is crypto."
- Beyond the Bubble: This segment values core crypto principles—self-custody, censorship resistance, global accessibility—but rejects the niche culture and hyper-speculation.
- Diversified Offerings: Companies like Robinhood succeed by offering a spectrum of financial products, from retirement savings to speculation, meeting varied user needs.
- DeFi Mullet Strategy: Embedding DeFi in the backend while presenting a traditional frontend can attract users who want the benefits of on-chain finance without the perceived complexity.
Podcast Link: https://www.youtube.com/watch?v=Kyw7lH0Tuh0
Crypto's insular subculture is dying, yet this signals its inevitable evolution into an invisible, mass-adopted technological backbone.
The End of Crypto-Native Dominance
- Douggee Duca's viral essay, "Crypto is Dead," resonated widely, signaling a profound shift from an insular, crypto-native focus to broader adoption. Coinbase's expansion into stock trading and prediction markets underscores this transition.
- Douggee Duca defines "crypto natives" as active on-chain transactors, crypto Twitter participants, and early app users, distinct from passive investors holding Bitcoin on platforms like Coinbase.
- The industry faces a dilemma: non-crypto-native entities increasingly adopt on-chain technologies and stablecoins, threatening the undisputed dominance crypto natives once envisioned.
- The "death" signifies the end of how the industry traditionally built, for whom, and what it prioritized. This necessitates a reactive shift for crypto natives to remain relevant.
- “The technology will persist, but cryptonatives will largely be left behind unless we choose to react and respond and move forward in a way that does actually meet the world where it's at.”
The Unsustainable "Product as Ponzi" Model
- Past strategies for attracting crypto-native users relied heavily on unsustainable incentive programs, creating a "product as Ponzi" dynamic that lacks long-term viability.
- Builders historically targeted crypto natives with incentive programs like points, liquidity mining, and high-yield token emissions.
- These models often lead to quick wealth for early participants but dry up as yields become unsustainable, leaving latecomers with losses and no enduring product.
- Douggee Duca criticizes this "product is the Ponzi" mindset, where the business lacks a viable strategy beyond the initial incentive scheme.
- The current cycle shows a receding "bubble size" and less massive wealth creation, making these schemes harder to sustain.
- “The mistake a lot of builders have made is that the product is the Ponzi. And that is it. And when you ask someone what happens after the scheme dries up, there's not really a good answer.”
Shifting Go-to-Market: Beyond Crypto Twitter
- The market for "super risk-on, chronically online" crypto natives is saturated. New growth demands reaching a broader "middle class" of users and integrating into mainstream platforms.
- Douggee Duca observes a significant shift in go-to-market strategies, with startups now prioritizing platforms like TikTok and Instagram to reach wider user segments.
- Companies like Robinhood exemplify meeting users where they are, offering diversified products (retirement, savings) beyond hyper-speculation, appealing to a broader wealth-generation audience.
- The "crypto" or "Web3" label itself becomes "baggage," alienating potential users who associate it with fear or distrust.
- Successful projects will focus on the efficiency gains and unique unlocks crypto technology provides, rather than the underlying tech label.
- “I think over the last several years, for the most part, the people who've wanted to come on chain and do the things that a lot of people on chain have been doing have done that.”
The "Middle Class" User and Invisible Tech
- A vast "middle class" of users exists—tech-savvy individuals who value crypto's principles but reject its niche culture. Future adoption hinges on making crypto technology invisible.
- The "middle class" user values self-custody (the ability to hold one's own private keys) and understands crypto's principles but avoids the "super niche culture." They seek benefits like immediate settlement without cultural engagement.
- Douggee Duca defines this group as closer to "early adopters," representing hundreds of millions of potential users and builders.
- The "DeFi mullet" strategy—using decentralized finance (DeFi) on the backend while presenting a traditional frontend—offers a viable path for some, balancing innovation with user comfort.
- Future applications will leverage blockchain for its fundamental unlocks, similar to how AWS became the backbone of cloud computing, without explicitly marketing as "on-chain."
- “The second that people start building on chain without ever having the conscious thought of ‘I am a cryptonative builder’ is a huge win, and the second that people start using our technology without ever thinking about ‘I’m touching crypto’ or ‘being on chain’ is also a huge win.”
Enduring Values and the Death of the Four-Year Cycle
- While the subculture fades, core crypto values like self-custody and censorship resistance will persist. Market maturity will also likely end the predictable four-year cycle.
- Core crypto values—self-custody, censorship resistance (the ability to operate without external interference), global accessibility, 24/7 blockchain operations, and stablecoins (cryptocurrencies pegged to stable assets like the US dollar) for inflation-prone economies—remain compelling and should be emphasized.
- Speculation, while often criticized, is a valid expression of a global trend and finds its best rails in crypto, but it should not define the entire industry.
- Douggee Duca predicts the four-year market cycle will eventually die, driven by increasing technology adoption and businesses generating revenue independently of market fluctuations.
- As microeconomies emerge within crypto, with companies making money regardless of Bitcoin's price, the industry will decouple from being solely a macro trade.
- “Structurally, do I think the four-year cycle persists? No, I don't. The reasons my article is touching on is the more technology adoption you actually have, the more businesses making money independently of market cycles, the less this thing exists.”
Investor & Researcher Alpha
- Capital Reallocation: Investors should shift capital from projects solely reliant on incentive schemes (airdrop farming, liquidity mining) towards those demonstrating sustainable business models and broad user appeal. Focus on companies integrating crypto benefits invisibly into mainstream products, similar to Robinhood's diversified offerings or social media-driven go-to-market strategies.
- Emerging Bottleneck: User experience (UX) and seamless mainstream integration, not just raw technological innovation, represent the new bottleneck. Research efforts should prioritize making crypto technology transparent and accessible to non-technical users.
- Obsolete Research Directions: Research focused exclusively on optimizing token emissions or airdrop farming for crypto-native speculation is becoming obsolete. New research must center on achieving sustainable product-market fit for non-crypto-native users and integrating blockchain utility into existing consumer behaviors.
Strategic Conclusion
Crypto's future lies in its invisible utility, shedding its niche subculture to become a foundational technology. The industry must prioritize user-centric product development and mainstream integration over insular, incentive-driven growth.
