Don't Let the Casino Devour the Cathedral — A Letter to China's Crypto OGs
- Core Argument: The article contrasts the differences in ecosystem building between the Chinese and American crypto industries. It points out that successful American crypto OGs systematically give back to the ecosystem by investing in talent and infrastructure, whereas the Chinese ecosystem, due to multiple factors, is trapped in a vicious cycle dominated by speculation. The author calls for Chinese participants to establish value-recycling mechanisms to support the industry's long-term, healthy development, even under existing constraints.
- Key Elements:
- Talent Drain Phenomenon: Many crypto entrepreneurs from 2023-2025 have left the industry due to funding difficulties and token failures. Simultaneously, a significant number of top talents are shifting to the AI field, reflecting the ecosystem's weak foundational support.
- Ecosystem Building by American OGs: Examples include Brian Armstrong founding Research Hub, Chris Dixon establishing the a16z crypto school, and Dan Robinson's deep involvement in technical development. After achieving success, they focus on attracting talent, transforming applications, and building systematic ecosystem support.
- Systemic Challenges for Chinese OGs: Influenced by the policy environment, a lack of historical narrative, and cultural factors, many early successes choose to exit rather than give back. There is a systemic lack of mechanisms for talent cultivation, long-term investment, and thought leadership.
- Formation of a Vicious Cycle: The absence of new value creation leads to a market stuck in zero-sum games, reinforcing speculative mentalities. This, in turn, drives away talent interested in building incremental innovations, creating a negative feedback loop of shrinking value creation.
- The Path of Long-termism: A healthy ecosystem requires a sufficient proportion of value-driven participants. Institutional investors should proactively take on the responsibility of building by investing in early-stage teams, funding entrepreneurs, sharing research, and establishing feedback mechanisms.
Original Author: Jocy@IOSGVC (X: @jocyiosg)
Part 1: Who Stays? More Importantly, Why Do They Stay
Last year, I wrote a tweet about the flow of talent between AI and crypto. Someone commented: It's good that talented people are going to AI; they are participating in building an inevitable future.
However, a recent podcast conversation made me realize this judgment wasn't deep enough. The question isn't just "who stays," but more fundamentally, "why do they stay" and "can the ecosystem support a revolution after they stay." Only those who have weathered bull and bear markets, failures, and the friction between reality and ideals, yet remain in the industry to continue building, have the potential to lead a revolution in the crypto space.
Over the past few months, I've spoken with many crypto entrepreneurs from 2023 to 2025.Many Chinese teams raised only five to seven million dollars around 2023. In the current environment, it's very difficult for them to raise the next round. This runway has allowed them to survive for just over two years until now, and then they stumble onto exchanges.Countless airdrops and distributed tokens flood the market, token prices keep falling, and the answer from these entrepreneurs is tokens about to go to zero, a lost reputation in the crypto industry, and then they turn and leave.
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 step into the crypto industry again, and the entire industry's ecosystem progress cannot be sustained—how can we compete in the crypto war between China and the US?
In April last year, I wrote a tweet mentioning news that a core team from a portfolio had started an AI application venture. The most prestigious talents in the industry were leaving. Even today, more and more people are making this choice. This is not a coincidence; it reflects a more systemic issue: after making money, Chinese and American crypto OGs have chosen completely different paths.
# Part 2: How American OGs "Feed the Cathedral"
What do American crypto OGs think about after making money?
**Brian Armstrong**, after taking Coinbase public as the first mainstream crypto exchange in the US, founded Research Hub, attempting to fundamentally change the incentive mechanisms for scientific research. **This is not a simple donation; it's a restructuring of the entire knowledge production system.
**Naval Ravikant**, as an early Bitcoin philosopher, not only promoted 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 thoughts on money, cryptoeconomics, and decentralization have profoundly influenced the entire industry.
**Chris Dixon** led Coinbase's Series B round as early as 2013, becoming the first mainstream VC to publicly go all-in 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 is not just an investor but a builder. He participated in Uniswap's early development, co-authored Uniswap V3, promoted the development of the modern MEV auction model during Flashbots' early stages, participated in Plasma research (a precursor to modern Rollups), and led Optimism's seed round. This deep technical participation and intellectual output represent true ecosystem building.
**Michael Saylor** transformed MicroStrategy into a Bitcoin strategy, holding $67 billion worth of Bitcoin (over 3% of the total circulating supply). Through innovative financing methods like issuing stocks and low-interest bonds, he continues to accumulate on a large scale, becoming an iconic figure in Bitcoin institutionalization.
**Barry Silbert** founded DCG and launched the Grayscale Bitcoin Trust (GBTC), becoming a primary channel for traditional investors to gain Bitcoin exposure. Its subsidiaries, Genesis Trading and CoinDesk, have become industry infrastructure.
Chainlink founder **Sergey Nazarov**, a former software engineer at Google, invented the decentralized oracle network in 2017, which has already supported over $7 trillion in transaction volume. Having achieved financial freedom through multiple market cycles, he still personally travels to places like Hong Kong to promote Chainlink standards, committed to unifying DeFi and traditional finance through CCIP and building a global "internet of contracts" ecosystem.
**Rune Christensen**, after encountering Bitcoin in 2011, 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 remained on the front lines of DeFi governance. In recent years, he rebranded MKR to Sky, launched the Spark protocol, and promoted the integration of DAI with US Treasuries, becoming a pioneer in the fusion of crypto and traditional finance.
**Arthur Hayes** founded BitMEX and introduced perpetual swaps, bringing traditional financial derivatives into the crypto market, with the funding rate mechanism becoming an industry standard. In 2022, he was fined for violating the Bank Secrecy Act and later pardoned by Trump. Subsequently, he co-founded the Ethena stablecoin protocol with Guy. Over the past few years, Arthur has continuously shared his crypto views with the industry, never stopping.
What do these people have in common? After making money, they don't think about how to exit, but about how to attract the best talent, how to change the world with applications, and how to build a systematic ecosystem for support. They are not just investors; they are builders, thought leaders, and contributors to public goods.
# Part 3: The Systemic Dilemma of Chinese Crypto OGs
In contrast, within the Chinese crypto circle, fundamental differences in the policy environment limit the space for long-term commitment. After early successes and some wealth accumulation, most OGs choose to exit rather than give back.
There is a lack of historical narrative. American crypto has had a grand narrative of "changing the world" from the beginning, continuing the tradition of public goods building from the Carnegie and Rockefeller eras. China has relatively weaker cultural accumulation in this regard.
We lack systematic talent cultivation mechanisms (compared to crypto schools in the US), lack long-term investment in crypto talent and infrastructure (compared to projects like YC/AllianceDao, Research Hub), and lack continuous intellectual output and industry discourse power (compared to Paradigm's research-driven approach, Naval's philosophical influence).
This is not a matter of personal morality but a systemic issue caused by multiple factors: missing historical narratives, policy uncertainty, and differences in cultural DNA.
What has this difference led to?
Many entrepreneurs and developers aim not just to get rich; they want to create world-changing applications, to leave a mark on history and be recognized. All the best talent, as long as they observe carefully, won't come back either.
When Web3 is simplified into a giant casino, when the industry's mainstream narrative degenerates from "changing the world" to a pure game of wealth, the best talent will vote with their feet. It's not that they don't want to make money, but they want to "make money meaningfully"—gaining rewards in the process of creating value, not harvesting others in a zero-sum game.
When everyone in the environment stops pursuing true ideals and values, these people will leave. Narratives are not empty; they directly affect the talent structure. When an industry cannot provide a compelling vision and value recognition, no amount of monetary incentive can retain those value-driven talents.
The vicious cycle we see now:
Lack of new value creation → The market can only gamble within the existing stock → Stock gambling reinforces speculative mentality → Drives away those who want to create incremental innovation → Even less value creation → The market relies more on stock gambling
This is a microcosm of the speculative era in China's crypto world.
# Part 4: Even Under Constraints, A Single Spark Can Start a Prairie Fire
Some might say: The environments are different; you can't simply compare them. That's correct. I'm not asking Chinese OGs to do exactly the same things as American OGs.
Others might say: Even if you want to do something, you can't do much, so why bother? But I believe that even under constrained environments, small actions like supporting open-source developers, organizing tech community events, and investing in early-stage tech startup teams still have meaning. Systematic efforts will have a compound effect.
Still others might say: Overemphasizing idealism is hypocritical; crypto is 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's entirely dominated by purely financially-driven people, in the long run, it will fall into a zero-sum game, ultimately harming everyone's interests. **This is not moral preaching, but enlightened self-interest.
IOSG's past investors include exchanges, miners, early crypto OGs, and traditional funds. I believe many Chinese OGs believe in idealism and heroism and are willing to push this industry forward. *It is precisely because the crypto industry, especially in China, is so difficult that they are still willing to continue supporting and helping this industry.
A single spark can start a prairie fire. We too can build a crypto positive feedback ecosystem as strong as America's.
# Part 5: The Cathedral and the Casino: 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 magnificent cathedral, a combination that has created an economic system the world has never seen before. At the same time, it comes with a huge casino attached.
The temptation is enormous, especially now. The temptation is to walk into that casino. In the casino, everyone is having a great time, money is flowing, but you also have to make sure the cathedral is fed.
In the next hundred years, Crypto must ensure that this cathedral is not overtaken by the casino.
The cathedrals of Bitcoin and Ethereum remain grand and magnificent, while the giant casinos of certain exchanges are lively every night. But if the casino's prosperity does not feed back to the cathedral, that structure creating real value will gradually decay, and eventually, the entire ecosystem will lose its foundation.
What Brian Armstrong, Vitalik, Chris Dixon, and others are doing is essentially feeding the cathedral. They are ensuring the casino's prosperity does not consume that cathedral.
# Part 6: The Only Path for Long-Termism
Returning to my judgment from a few months ago, it now needs a deeper layer of understanding:
Those who stay after experiencing bull and bear markets indeed have the potential to lead a revolution, but simply "staying" is not enough. More important is "why they stay" and "whether the ecosystem can support a revolution."
A revolution requires the support of the entire ecosystem. The sustained development of American crypto is not because people are more resilient, but because they have established a systematic feedback mechanism that allows the ecosystem to renew and evolve itself.
As an institutional investor, IOSG will also continue to proactively take on the responsibility for change:
* Systematically invest in more early-stage startup teams, even if short-term returns are not obvious
* IOSG EIR will support and fund more entrepreneurs currently facing fundraising difficulties, establishing a stronger talent cultivation mechanism
* Continuously output and share frontline industry research and thoughts
* Focus on long-term value creation rather than short-term hype 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 might be the same, but the meaning is completely different.
