When the chain becomes the product: Seven years inside a token-funded venture

Lots of similarities to the Bitcoin investment thesis. Where the chain itself becomes the product and not any utility derived from it. You have to believe in a future where all fiat money crashes and becomes worthless, evil states confiscate other forms of wealth, like stocks and bonds but for some reason will be powerless to prevent bitcoin transfers. At the same time the hard limit of 21 million BTC will never be revoked despite continuously declining miners revenue. And only within that strict narrative does a long-term investment really make sense.

I love the ending footnote, its the perfect statement to prove his thesis. Just because you understand the problem does not mean you are immune to it. Just because you know smoking is bad for, and you understand the mechanisms of addition, does not mean you manage to quit smoking.

  Good products come from tight cycles: ship something, listen to users, iterate. Token economics break that cycle by introducing a competing optimization target. The team stops asking "what do our developers need?" and starts asking "what supports the token narrative?"

This is why 99.99% of crypto projects are a scam.

No, your token investors don't give a damn what you deliver. They only care about the price of the token. Lie if you have to. Hype up your project like it's the greatest thing in the world. Do whatever to enable security fraud.

When teams discover that lying does more for the token price than actually building, they quickly switch incentives. Now they'll just lie, sell tokens, repeat, until a final rug pull to scam the remaining bag holders.

I remember Blockstack from the first crypto bull run. It was the product I thought had the most potential after Ethereum, building off of tools like Sia. The white papers [1] laid out a technical plan for fully building an internet on blockchain. It felt like the “decentralized internet” from Silicon Valley (the show), and must have inspired that plot point.

For an industry that was full of hype and fake products, it was one of the few you could download and get some use out of. I remember a very janky Google Docs clone running on the chain. Sad to see that they’ve lost their way. For now crypto still only has one value prop: token go up.

[1] https://cs.brown.edu/courses/csci2390/2019/readings/blocksta...

So... his takeaway after taking 7 years to realize that "blockchain ecosystems" are an empty hype machine... is to start a project that brings blockchain into LLM coding agents.

I can't believe this field turned into this. It used to be so cool and rewarding.

Seems like you could get a very similar phenomenon in lavishly funded hot startups.

The company's stock is the product. The product only has to be good enough to look plausible. Growth can be bought by selling $1 bills for $1.50 and by plowing money into marketing. The most important thing is to keep the hype up and raise the next round and make sure it's not a down round, or even if it is who cares... the execs just pay themselves fat salaries or work side sales of stock into there to cash out even if the main stock price is underwater.

You get inherent problems when you're selling a promise or a certificate not a product.

Does anyone else find this kind of LLM written stuff tiring to read.

Admittedly I only read the titles.