Original Article Title: "Don't Let the Casino Swallow the Cathedral - A Letter to Chinese Crypto OG"

Original Article Author: @jocyiosg, Founder of IOSG

Part 1: Who Stays? More Importantly, Why Stay

Last year, I wrote a piece on AI and Crypto talent migration, and someone commented: It's great that top talent is going into AI, participating in building an inevitable future.

However, a recent podcast conversation made me realize that this assessment is not deep enough. The question is not only "who stays," but more fundamentally, "why stay" and "whether the ecosystem can sustain the revolution after staying." Only those who have experienced the bull and bear markets, failures, the friction between reality and ideals, and still choose to remain in the industry to continue building, have the possibility to lead the revolution in the crypto sphere.

In the past few months, I have spoken to many 2023-2025 crypto entrepreneurs. Many Chinese teams raised only five to seven million dollars around 2023, and it is now challenging to secure the next round of funding in the current environment. With a runway that barely lasted two and a half years until now, they are slowly launching their trading platforms. Countless airdrops and distributed tokens have flooded the market, token prices have plummeted, and the answer given by entrepreneurs is tokens on the verge of going to zero, losing reputation in the crypto industry, and then walking away.

Looking back at Asia, there are fewer and fewer investors willing to support early-stage entrepreneurs. Without investor support, there are no determined entrepreneurs willing to enter the crypto industry again, and the progress of the entire industry ecosystem cannot be sustained - how can the crypto war between China and the US compete?

I wrote a post in April last year mentioning a core team in a portfolio starting an AI application startup, and the most prestigious talents in the industry were leaving. Until today, more and more people are making this choice. This is not a coincidental phenomenon; it reflects a more systemic problem: after earning money, Chinese and American Crypto OGs chose completely different paths.

Part 2: How US OGs "Nurture the Cathedral"

When US Crypto OGs make money, what are they thinking about?

Brian Armstrong: After taking Coinbase public as the first mainstream US crypto exchange, he founded the Research Hub, attempting to fundamentally change the incentive mechanism of scientific research. This is not a simple donation but a restructuring of the entire knowledge production system.

Naval Ravikant: As an early Bitcoin philosopher, he not only advocated for ICOs through AngelList and positioned Bitcoin as a global crowdfunding tool, but also incubated CoinList to provide a compliant framework for token issuance and funded the Zcash team. His ideas on currency, cryptoeconomics, and decentralization have profoundly influenced the entire industry.

Chris Dixon: He led the Coinbase Series B round in 2013, becoming the first mainstream VC to fully bet on crypto. He grew a16z Crypto from $300 million in 2018 to over $7 billion, not only investing in projects but also establishing a Crypto school to systematically cultivate industry talent.

Dan Robinson: At Paradigm, he is not just an investor but also a builder. He was involved in the early development of Uniswap, is a co-author of Uniswap V3, drove the development of the modern MEV auction model in the early stages of Flashbots, participated in Plasma research (a precursor to modern Rollups), and led the seed round for Optimism. This deep technical involvement and thought leadership are the true foundation of ecosystem development.

Michael Saylor: He transformed MicroStrategy into MacroStrategy, holding $67 billion worth of Bitcoin (over 3% of the total circulating supply) and continuously accumulating on a large scale through innovative financing methods such as stock issuance and low-interest debt, becoming a key figure in Bitcoin institutionalization.

Barry Silbert: He founded DCG and launched the GBTC Grayscale Bitcoin Trust, becoming a major channel for traditional investors to gain Bitcoin exposure. His subsidiaries Genesis Trading and CoinDesk have become industry infrastructure.

Chainlink: Founder Sergey Nazarov, a former Google software engineer, invented the decentralized oracle network in 2017, which has supported over $7 trillion in transaction volume. Having achieved financial independence after experiencing multiple bull and bear cycles, he still actively promotes the Chainlink standard in far-reaching locations like Hong Kong, aiming to unify DeFi and traditional finance through CRE and build a global "Internet of Agreements" ecosystem.

Rune Christensen: After encountering Bitcoin in 2011, he sold his English teacher recruitment business in China to fully commit to Crypto. In 2015, he founded MakerDAO and launched the decentralized stablecoin DAI, becoming one of the first and largest DeFi protocols on Ethereum. For over a decade, he has been at the forefront of DeFi governance. In recent years, he rebranded the MKR brand as Sky, introduced the Spark protocol, facilitated DAI's integration with US Treasury bonds, and became a pioneer in bridging crypto and traditional finance.

Arthur Hayes: Founded BitMEX and introduced perpetual swaps, bringing traditional financial derivatives to the Crypto market. The funding rate mechanism became an industry standard. In 2022, he was fined for violating banking secrecy laws but later received a pardon from Trump. He then co-founded the Ethena stablecoin protocol with Guy. Over the past few years, Arthur has been consistently sharing his crypto insights with the industry.

What is the common characteristic of these individuals? After making money, they don't think about exiting; instead, they focus on attracting the best talent, transforming world applications, and establishing systemic ecosystem support. They are not just investors but also builders, thought leaders, and contributors to public goods.

Part 3: The Systemic Challenge for Chinese Crypto OGs

Looking at the Chinese Crypto community, the fundamental policy environment difference has limited the space for long-term dedication. Most OGs, after early success and accumulating a certain amount of wealth, choose to exit rather than give back.

Lack of historical narrative. The U.S. Crypto community has always had a grand narrative of "changing the world," continuing the tradition of public goods development from the Carnegie and Rockefeller eras in the Crypto field. China's cultural accumulation in this respect is relatively weak.

We lack a systemic talent cultivation mechanism (in contrast to the Crypto school in the U.S.), long-term investment in crypto talent and infrastructure (compared to projects like YC/AllianceDao and Research Hub), and sustained thought leadership and industry influence (compared to Paradigm's research-driven approach and Naval's philosophical impact).

This is not a matter of individual ethics but a systemic issue caused by factors such as the lack of a historical narrative, policy uncertainty, and cultural genetic differences.

What Does This Discrepancy Lead To?

Many entrepreneurs and developers aim for more than just getting rich; they want to create world-changing applications, leave a mark on history, and be recognized. All the top talents, as long as they observe carefully, will not come back.

When Web3 is reduced to a mere casino, when the industry's mainstream narrative devolves from "changing the world" to a pure wealth game, the top talent will vote with their feet. It's not that they don't want to make money; it's that they want to make "meaningful money" — to earn returns in the process of creating value, rather than harvesting others in a zero-sum game.

When no one in the environment is pursuing true ideals and values, these people will leave. The narrative is not empty; it directly affects the talent structure. When an industry cannot provide a compelling vision and value alignment, no amount of financial incentives can retain those value-driven talents.

The Vicious Cycle We See Now:

Lack of new value creation → The market can only speculate in the existing pie → Speculation on the existing pie reinforces a speculative mentality → Drives away those who want to make incremental innovations → Less value creation → The market becomes even more reliant on speculating on the existing pie

This is a microcosm of China's cryptocurrency circle of speculative times.

Part 4: Even Under Constraint, a Spark Can Start a Fire

Some may say: the environments are different, and they cannot be simply compared. That's correct. I'm not asking Chinese OGs to do exactly what American OGs do.

Others may say: even if you want to do something, there is not much that can be done, so why bother. However, I believe that even under constrained environments, supporting open-source developers, organizing technical community events, investing in early-stage tech teams, these small actions still matter. Systemic efforts will have a compound effect.

Some may also say: placing excessive emphasis on idealism is hypocritical; Crypto is purely financial innovation. But this is not an either-or choice. A healthy ecosystem needs a sufficient proportion of people who are value-driven. If it is completely dominated by purely financially driven individuals, it will eventually fall into a zero-sum game, ultimately harming everyone's interests. This is not moralizing but enlightened self-interest.

Many of IOSG's past investors are traders, miners, early crypto OGs, and traditional funds. I believe that many Chinese OGs believe in idealism and heroism and are willing to push this industry forward. It is precisely in the context of the crypto industry, especially the challenging Chinese environment, that they are still willing to continue supporting and helping this industry.

A single spark can start a prairie fire. We can also build a crypto positive feedback loop as strong as the United States.

Part 5: The Cathedral and the Bazaar: Buffett's Warning

Warren Buffett used this metaphor to describe American capitalism: In the next hundred years, make sure that the cathedral is not overtaken by the casino. This metaphor is equally applicable to the crypto market:

Cryptocurrency and blockchain have achieved unprecedented success. It is a combination of a magnificent cathedral, which has created an economic system never seen before in the world. At the same time, it also comes with a huge bazaar.

The temptation is very strong, especially now, the temptation is to enter that bazaar. In the bazaar, everyone is having a great time, money is flowing freely, but you must also ensure that the cathedral is sustained.

In the next hundred years, Crypto must ensure that this cathedral is not consumed by the bazaar.

The cathedrals of Bitcoin and Ethereum are still magnificent, while some trading platforms' bazaars are lively every night. But if the prosperity of the bazaar does not feed back to the cathedral, the building that creates real value will gradually fall into disrepair, and eventually, the entire ecosystem will lose its foundation.

What Brian Armstrong, Vitalik, Chris Dixon, and others are doing is essentially supporting the cathedral. They are ensuring that the prosperity of the bazaar does not swallow up the cathedral.

Part 6: The Only Path to Long-Termism

Returning to my judgment from a few months ago, now I need to add a deeper understanding:

Those who remain after the bull and bear markets may indeed be able to lead a revolution, but simply "staying" is not enough. More importantly, it is "why stay" and "whether the ecosystem can support the revolution." The revolution requires the support of the entire ecosystem. The sustained development of American Crypto is not because people can endure more but because a systemic feedback mechanism has been established to allow the ecosystem to self-renew and self-evolve.

As an institutional investor, IOSG will also continue to actively assume the responsibility of change:

1. Systematically invest more in first-tier early-stage teams, even if short-term returns are not clear

2. IOSG EIR will support and fund more entrepreneurs currently facing challenges in startup financing, building a stronger talent cultivation mechanism

3. Continuously output and share frontline industry research and thoughts

4. Emphasize long-term value creation rather than short-term speculation in project investment selection

We need to redefine success. Wealth transfer in a zero-sum game vs. wealth creation in the process of creating real value; the numbers may be the same digitally, but the meaning is entirely different.

If Chinese crypto institutions and capable participants can make breakthroughs in feedback mechanisms, they may become a key force for changing the ecosystem. This is not only a moral responsibility but also a rational choice for long-term interests—only a healthy ecosystem can incubate great projects, attract outstanding talent, and create sustainable value.

This is true long-term thinking and the only path to ensure that the cathedral is not swallowed by the casino.

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