Why Crypto Changed Forever | Roundup

The primary mode of interaction with crypto has shifted so that regular companies now sit at the front end while underlying protocol infrastructure is invisible to users. Five years ago, people outside crypto were actively trying to onboard directly to protocols like Near and random Cosmos chains. The practical consequence is that there are far fewer investable token opportunities today than in that earlier period.

Two overlapping catalysts define the current era. The United States has shifted from trying to push crypto offshore to creating regulated routes for it, and the market has reached consensus that financial applications, specifically yields, borrow-lend, trading, and payments, are the dominant use cases that actually work. These two forces together have fundamentally changed the customer base for crypto, because regulated financial distribution and capital are now permitted to participate.

Regulation made it easier for players to move up and down the stack. Coinbase and Binance each moved from owning the end user to launching their own chains, Base and BNB Chain respectively. Hyperliquid moved in the opposite direction, starting as an app on Arbitrum, achieving better product-market fit than Binance on-chain, and then becoming its own chain. Building a blockchain is no longer hard, particularly in the era of AI, making blockspace a commodity, while finding users and building a good app with product-market fit remains genuinely difficult and therefore more valuable.

Crypto had a five-to-seven year window where large incumbents like Fidelity, BlackRock, and NYSE avoided the space due to regulatory risk, giving startups room to build defensible positions. That window is now closing. Founders who built during the regulatory-unclear period had to do difficult compliance work but could carve out large market share before clarity arrived. Ethereum gas fees illustrate the infrastructure overbuild: average fees were approximately fifty dollars in 2021 and have since fallen to sub-one dollar, and transaction volume would need to increase roughly fifty times to recover the fee revenue lost from lower gas prices. General-purpose L2s were overbuilt and many did not need to exist.

This is described as probably the best single time for second-mover advantage across all of crypto, because incumbents carry hangovers from wrong operating structures, reporting structures, legal setups, and cap tables. Stablecoin issuance itself is commoditizing, with the OpenUSD announcement signaling that large institutions can also issue stablecoins and capture value previously held by Circle and Tether. Value capture is shifting toward applications that control order flow, with Hyperliquid and Morpho named as beneficiaries. Large fintechs like Robinhood and Stripe have enough leverage to demand favorable revenue splits from stablecoin issuers, with a prediction that splits will converge to roughly eighty or ninety percent in favor of the distribution partner. One speaker cautioned that the network effects of USDC and Tether are being underestimated, and that corporate chains and proprietary stablecoins launched by fintechs are likely to fail due to high cost and coordination difficulty, with consortium models historically failing because member companies do not share the same incentives.

On chain positioning, USDC network effects reside at the asset layer rather than the chain layer, and RWA trading pairs default to USDC because it is US-regulated in a way that Tether cannot be used. Base is described as an underrated chain for the next cycle given Coinbase's existing user base, execution layer, and application ecosystem, with the caveat that Coinbase selling off its Circle stake could signal it is pursuing an alternative stablecoin strategy. Solana is currently preferred over ETH as an asset because Anatoly consistently emphasizes the need to generate fees and remain neutral, whereas Vitalik has expressed that Ethereum does not need to generate fees and should resemble Linux, which makes ETH difficult to own. Ethereum and Solana are described as strong buys because they represent neutral settlement layers that enterprise or bank consortiums will eventually defer to if those consortiums fracture due to misaligned incentives.

Founders who launch tokens effectively have two products and must actively manage both the business and the token price. Projects are winning large contracts by distributing large token incentives, which can cause market cap to rise while price falls, and one speaker argues these incentive payments should be disclosed to the market. The cost of issuing tokenized equity is described as an order of magnitude lower than a traditional IPO, and distribution costs effectively disappear because anyone with internet access and the ability to KYC can hypothetically buy the assets. Crypto lowers the cost of going public but risks pushing projects to act like public companies before it is in their long-term interest. One speaker says crypto is roughly fifty percent of the way toward delivering on its promise of access and opportunity, and that if interest rates fall, on-chain composability and access to on-chain assets will become significantly more compelling.