As the corporal laughed, "Encryption is dead," the sergeant was navigating that damned cycle.

Author: Haotian

This is a sentence that suddenly came to mind recently amidst the noise of "Anything But Crypto", "Meme Nihilism" and "Crypto Doomsday".

This feeling intensified, especially after reading @VitalikButerin 's interview about 2026. (Related reading: Revisiting Vitalik: Rejecting the Doomsday Script, Searching for Crypto's Lost Soul )

We see @VitalikButerin sitting relaxed on a swing in Chiang Mai, not overjoyed by the progress of Ethereum's technology roadmap, but instead seeing the huge gap between technology and application.

Why? Ethereum has made tremendous progress in scaling technology, doubling its gas limit, successfully implementing zkEVM, and significantly improving user experience with account abstraction. Technically, we've won big, but in terms of applications, we've lost miserably.

In other words, we built a supercar (L2/L3) with a top speed of 300 km/h, but the cars on the road are all "old man's cars" (memes) and "bumper cars" (PVP mutual cut).

This intense sense of "dislocation" is something most people can't understand. Drawing on Vitalik's reflections, I want to strip away the grand narrative and discuss these four harsh truths that only a "sergeant" would be concerned with:

When "infra" becomes an addictive dependency

We've fallen into a collective delusion: we need to build not only roads, but more roads, and faster roads, even if there are no cars on them at all.

We originally envisioned a "decentralized Uber" or a "Web3 Amazon," but what we've gotten is endless financial speculation. This is a classic example of a structural mismatch between "infrastructure overcapacity" and "extreme lack of product-market fit (PMF)."

Why is this? The answer is simply that "selling shovels" is an easier story to tell than "digging for gold."

Over the past few years, VCs and developers have conspired to stage a frenzy of "technological narcissism." As long as your TPS is high enough and your ZK algorithm is obscure enough, you can get a high valuation. As for whether anyone uses it? It doesn't matter; that's a matter for the next cycle.

In reality, true technology should be like air and water—essential for survival, yet its presence goes unnoticed. The hype surrounding infrastructure must shift towards applications and services. Without addressing the question of "who will drive," building more roads is merely erecting a tombstone for the industry's desolation.

The essence of social interaction: Dopamine must not kill oxytocin.

Vitalik made a profound statement: if financial incentives are too strong, they will directly destroy the essence of social interaction.

When we introduced Tokenomics into our social products, we thought we were incentivizing users, but in reality, we were feeding greed. Was the early growth data really social? No, it was a frenzy for "on-chain gold farming studios." Once the expected returns declined and the crowd dispersed, it left behind a mess.

This is why Vitalik affirmed the strategic wisdom of @farcaster_xyz's transition to wallets.

In an era of AI agents and high-frequency interactions, the wallet is the "universal connector" that connects everything. When Farcaster decided to embed social relationships at the bottom layer of the wallet, rather than simply creating a "Web3 version of Twitter," it wasn't a sign of admitting defeat or retreating, but rather a sign that it had found the lifeblood of crypto products.

The ultimate goal of social networking is not to turn "likes" into a transfer of money, but to turn "content" into an "asset." Only by stripping away excessive financial noise and returning to a curatorial and selection logic similar to Substack can Web3 social networking regain its lost soul.

AI's Redemption: Giving Silicon-Based Life an "ID Card"

The grand narrative surrounding AI + Crypto has been hyped wave after wave, with initiatives like the AI ​​Agent MEME token launch and the x402 Agent payment expansion boom. But who can answer the core question Vitalik raised: What exactly can Crypto bring to AI?

The answer is not the next 100x Golden Dog, but rather, as Vitalik said, "permissionless": humans, companies, and AI agents all have equal access rights.

In the Web2 world, even the most powerful AI agent is essentially an "illegal entity." It has no bank card, no legal identity, and could be disconnected from the internet by OpenAI at any time, or have its funds frozen due to risk control measures. It is merely a string of code on a server, the private property of tech giants.

However, Crypto grants AI the status of an on-chain entity that cannot be frozen. In response, Vitalik also offered several directions:

AI's bank account: This is the endgame of PayFi or the x402 protocol. Only blockchain can support the high-frequency, transparent, and reliable micropayments between AI agents.

Prediction markets: This is where AI's superior cognition will manifest itself. Prediction markets will be the best stage for AI to demonstrate its "cognitive monetization."

Data ownership verification: When AI-generated content becomes rampant, only blockchain can prove "who is the original and who is the forger".

Perhaps this is the true point of convergence between Crypto and AI: we are not issuing tokens, we are building a legal and financial system that allows silicon-based life to breathe freely.

The End of Nothingness: Memes are a retaliatory rebound after the "destruction of technological narratives".

Vitalik worries that the industry will die from meme nihilism. I worry too.

But we need to understand the logic behind the popularity of memes: it is a "non-violent non-cooperation" of retail investors against the greedy model of "VC-backed schemes, high valuations, low liquidity, and unlimited unlocking".

When so-called "value coins" become tools for institutions to cash out at high prices, retail investors' choice of Meme is a retaliatory rebound. The subtext is, since they are all being exploited, I might as well play in a casino where the odds are in the open, at least there it seems fair.

But this frenzy is dangerous because it's mortgaging the industry's future. If crypto ultimately becomes nothing more than 100% gambling, it loses its legitimacy and will eventually wither away due to a lack of revenue generation.

Aren't the prejudices we've recently experienced from outsiders and even the unfair treatment from algorithms the price of the alienation of Crypto culture?

We can only break out of this vicious cycle when technological narratives serve the real world, rather than serving the pure casino.

above.

As you may have noticed, I included a similar image of the Mohicans at the end of this article. In my view, if the crypto apocalypse were to actually happen one day, @VitalikButerin would be the last crypto-punk watching over the deep jungle.

Going back to the beginning, I feel it's necessary to explain that sentence in the Tao Te Ching:

Corporal Gambler mocked the barrenness of the Crypto industry, seeing through it all, claiming that encryption is dead and indulging in the thrill of PvP combat.

Sergeants in the industry are suffering in the industry with half-belief and half-doubt. They have no idealism or speculative pleasure. Their idealism has been worn away and they can't grasp the speculative pleasure. All that is left is internal friction and confusion.

For a few "sergeants" like Vitalik, what they see is not the "endgame of crypto," but rather the eve of another "breakthrough" for the crypto industry.

The superior man, upon hearing the Way, strives to put it into practice; the average man, upon hearing the Way, is skeptical; the inferior man, upon hearing the Way, laughs heartily. Often, the more popular something is, the less likely it is to have any true meaning. What the inferior man desires is never the Way, but rather the excitement.

The question is, what if the scenario of a crypto apocalypse unfortunately comes true one day:

Would you like to follow @VitalikButerin and join his crypto-punk army?