Crypto's New Realities: HODL is Dead, DAOs are LMAOs, Bye DeFi and More
How the crypto has changed over the years
The reason I love crypto, as part of finance and trading, is that the market clearly tells you if you are right or wrong.
Especially in this dystopian world of politics, arts, journalism, or many other industries where the line between truth and lies is unclear, crypto is straightforward:
If you are right, you earn money. If you are wrong, you lose. It's very simple.
And yet, I the trap I fall into is a very basic too: failing to reevaluate my portfolio when conditions changed. While I traded alts, I got too complacent with my ‘untouchable, HODL’ bags, notably ETH.
Of course, adapting to new realities is easier said than done.
The number of variables we need to input is overwhelming, so we end up with simple narratives like HODL that don’t require actively monitoring the market.
But what if HODL meta is now dead? And what role does crypto play in the changing world? What else have we missed?
In this blog I’ll share what I think has changed significantly in the market.
End of the HODL
Let’s teleport to early 2022:
ETH is trading at ~$3K USD, after a big dump from $4.8k. BTC is at $42k. Yet both will dump 50% more due to interest rate hikes, CeFi implosion and the FTX collapse.
Still, Ethereans remain bullish: ETH is set to migrate to PoS, and just a few months ago, ETH burn EIP launched. The narratives of ETH as ultrasound money and an environmentally friendly, energy-efficient blockchain are hot.
For the rest of 2022, ETH and BTC wouldn’t do well but SOL would get ABSOLUTELY rekt, dropping 96% to $8 USD.
Ethereum won the L1 wars and alt-L1s should migrate to an L2 or face extinction.
I remember attending conferences during the bear market. The vast majority were confident that ETH would rebound the strongest, so they loaded up on ETH while underallocating BTC and ignoring SOL.
Just HODL and sell at the top in 2024/25. Easy.
But lolz!
Since then, SOL has rebounded, while Ethereum faces its strongest FUD ever. Ultrasound money narrative is dead (for now), and the environmentally friendly (ESG, anyone?) narrative never really picked up.
HODLing ETH was the biggest mistake of this cycle for me. And for many of you.
My bullish thesis was ETH becoming the most productive asset crypto has ever seen:
Restaking would give super-powers to ETH to secure not just Ethereum but the entire crucial DeFi and crypto infrastructure. ETH (re)staking yields would soar, and airdrops would continue to accrue simply by restaking ETH.
As yields increase, demand for ETH and its price should rise. TL;DR - moon!
Obviously, this didn’t happen because the value proposition of restaking was never clear, and Eigenlayer fumbled the token launch.
So, what does all this have to do with HODL meta being dead?
For many, ETH was-HODL-and forget asset. If BTC pumps, ETH would pump harder thus holding BTC didn’t make sense.
I should’ve recognized and adapted when my bullish thesis on ETH, based on the restaking narrative, failed to materialize. Instead, I got lazy and complacent, unwilling to admit my mistake. ETH would rebound someday, right?
HODL isn’t just bad advice for ETH, but even more for all other assets with a possible exception of BTC (more on it later).
Crypto moves too quickly to hold an asset for months or years and expect to retire. Checking the charts shows most alts retracing their gains from this bull run cycle. Clearly, profits come from selling, not holding.
This successful memecoin trader explains that rather than HODLing, he often holds a memecoin for less than a minute.
Some still try to sell you the HODL dream, but it's more of a ‘quick in-and-out’ cycle than a HODL one.
BTC is the Only Macro Cryptoasset
The only exception to the ‘quick in-and-out’ approach was BTC.
Some attribute BTC's outperformance to Saylor's infinite bid as we've successfully marketed BTC as digital gold to institutions.
But the battle is not won yet.
Many crypto commentators continue to treat BTC as a risk-on asset that trades a higher volatility bet on S&P500.
This contradicts Blackrock’s research, which found that BTC’s risk and return drivers differ from traditional risky assets, making it incompatible with conventional finance frameworks, such as the "risk on" vs. "risk off" approach used by some macro commentators.
I shared more on this non-obvious truth in my post below.
What do you believe to be the truth?
I believe BTC is shifting from those who see it as a leveraged stock bet to those who view it as a digital, risk-off, gold-like asset. Mexican billionaire Ricardo Salinas who HODLs BTC is just one example.
It's the only true macro crypto asset. ETH, SOL, and others are evaluated based on fees, transactions, and TVL, while BTC has transcended this framework to become the macro asset even Peter Schiff understands.
This transition isn't over yet, but this period of moving from a risk-on asset is an opportunity. Once BTC is universally recognized as a risk-off asset, it will trade at $1M USD.
The Rot in the Private Market
I sensed something was wrong when every relatively successful KOL started becoming a "VC" to invest at low valuations, only to later dump at TGE.
However, nothing captures the state of the crypto private market better than this post by Noah.
I recommend reading it in full, but here’s the gist on how the private market changed over the years.
In the early days (2015–2019), private market players were true believers. They backed Ethereum, funded DeFi pioneers like MakerDAO and ETHLend (Aave), and valued HODLing. The goal wasn’t just quick profits but it was to create something meaningful.
It was a believer stage.
The DeFi Summer of 2020–2022 was a big change. Suddenly, everyone wanted newer, hotter tokens. VCs deployed capital, funding tokens with absurd valuations and zero utility.
The game was simple: buy low in private rounds, hype the project, then dump on retail. When those collapsed, we needed a cleanup to learn. But nothing changed.
It was a greed stage.
Post-FTX (2023–2025), the private market became nihilistic. VCs now fund “soulless token machines” (projects with recycled ideas, questionable founders (Movement!), and no real use case.
Private rounds were priced at 50x revenue multiples (if there’s revenue at all), forcing public markets to absorb the losses. The result was 80% of 2024 token launches dumped below their private sale price within six months.
An extraction stage.
Now, the retail trust is gone and VCs are rekt.
Many VC deals are trading below their Seed round valuations and my KOL friends are underwater.
Yet there are signs of improving private market:
Backlash and ousting of Movement co-founder and Gabagool (ex-rugger of Aerodrome). We need more cleansing.
Valuations are coming down in the private and public markets.
Crypto VC funding has finally rebounded, reaching $4.8B in Q1 2025, the highest since Q3 2022 and funding is flowing to sectors with proven utility.
Q1 2025 was the strongest quarterly total since Q3 2022. The $2 billion Binance deal played a central role, but the presence of twelve other large-scale (> $50M) rounds showed renewed institutional interest. […]
Capital flowed into sectors with proven utility and revenue potential, including CeFi, blockchain infrastructure, and services. New focus areas such as AI, DePIN, and real-world assets also drew strong interest. DeFi led in the number of rounds but saw smaller raise sizes, reflecting more conservative valuations. - CryptoRank State of Venture Capital in Crypto, Q1 2025
We are now experimenting with new token issuance models to reward early supporters rather than insiders.
Echo and Legion are at the forefront with Base launching a group on Echo. And Kaito InfoFi meta is bullish as even those without financial capital but with social influence can benefit.
It seems the market got the message and the nature is healing (although KOLs still eat the best).
Bye DeFi. Hello Onchain Finance.
Remember the short lasting narrative of Yield Aggregators? Yearn Finance led the way, followed by many forks.
Now, we're in the era of Yield Aggregator 2.0. We just call them Vault strategies instead.
As DeFi becomes more complex with more protocols, Vaults are attractive: deposit your assets and earn the best risk-adjusted yield.
However, the big difference between the first and current yield aggregator phases is the increasing centralization of asset management.
Vaults have ‘strategists’ - usually a team of ‘institutional investors’ who chase the best opportunities with your capital. For them it’s a win: they use your capital and generate fees on it.
Examples of these strategists include MEV Capital, Seven Seas, Gauntlet, Veda and many more who partnered with protocols like Etherfi, Upshift, and Mellow Protocol.
Veda alone is the 17th-largest ‘protocol’ in DeFi! More than Curve, Pancakeswap or Compound Finance.
However, Vaults are just the tip of the iceberg. The true vision of decentralization in DeFi is long dead; it has morphed into onchain finance.
Think about it: the fastest growing sectors of DeFi and crypto are real world assets, yield-bearing & delta-neutral stablecoins like Ethena, Blackrock’s BUIDL are far away from the initial vision of DeFi.
Or BTCfi (and BTC L2s) that are multisigs where you must trust the custodians not to rug you.
It has been this way since Maker’s shift from a decentralized DAI to yield generating RWA protocol. Real decentralized protocols are rare and small (Liquity is an example).
It’s not necessarily a bad thing: RWAs and tokenization allow us to escape the circular and leverage based DeFi ponzi era.
This means risk factors are expanding, making it more complex to know where your money truly is. I wouldn’t be surprised to see CeDeFi protocols misusing user funds.
Remember: hidden leverage always finds ways to creep into the system.
DAO → LMAO
The same decentralization illusions are being shattered for DAOs.
The old thinking was based on the Progressive Decentralization theory popularized by a16z in Jan, 2020.
Protocol first finds PMF → as network effects grow, community gets more power → team ‘exits to the community’ and reaches sufficient decentralization.
5 years on, I believe we’re going back towards centralization. Consider Ethereum Foundation itself that is stepping back in more aggressively to scale the L1.
I’ve already shared in my previous blog on “Fearful State of the Market & What's Next #6” that the DAO model faces many problems:
Voter apathy
Growing risks of lobbying (buying votes)
Execution paralysis
Arbitrum and Lido DAOs are moving towards greater centralized control (via more active team involvement or BORGs), but a big shake up is happening in Uniswap.
Uniswap Foundation voted on $165M USD liquidity mining rewards to boost Uniswap v4 and Unichain. Or another conspiracy theory claims that liquidity thresholds needed to meet Optimism OP grant rewards.
Anyway. DAO delegates are angry. Why does the Foundation pay for all the $UNI rewards while Uniswap Labs (centralized entity) earns millions in Uniswap front-end fees?
A top 20 delegate recently stepped down as Uni delegate.
I recommend reading the post in full but his arguments are as follows:
Governance Theater: Uniswap’s DAO appears open but marginalizes dissent. Proposals follow process (discussion, votes, forums) but feel pre-decided, reducing governance to a "ritual."
Power Consolidation: The Uniswap Foundation rewards loyalty, silences critics, and prioritizes optics over accountability.
Decentralization’s Failure: DAOs risk irrelevance if they prioritize branding over substance. Without true accountability, they become "dictatorships with extra steps."
The funny thing is that a16z is the key Uniswap stake(token)holders but Uniswap is far away from reaching progressive decentralization.
Perhaps it’s not an exaggeration to say that the DAO was a smokescreen; we needed a coherent story to avoid the regulatory scrutiny that centralized crypto companies would face.
So, tokens solely as voting tools aren't worth investing in anymore. Real revenue sharing and real utility are a must.
No more DAOs. Welcome LMAOs (Lobbied, Mismanaged, Autocratic Oligopolies).
DEXs (Hyperliquid) Challenging CEXs
Now, I'll share my conspiracy theory.
FTX launched Sushiswap because they feared Uniswap might overtake their spot market. Even if they didn't launch it directly, they likely supported it closely with development and capital.
Similarly, the Binance team (or BNB, whatever) launched PancakeSwap for the same reason.
Uniswap posed a significant risk to CEXs, but it was largely neutralized since it didn't challenge their more profitable perpetual trading business.
How profitable? Truly hard to tell as you can see from the comments.
Hyperliquid presents a different kind of a threat. It goes after perps first, but spot markets as well. All while building their own smart contract platform.
Hyperliquid accounts for growing share of perps market, growing to 12.5%. (Can check stats here or here in real time.)
I was shocked to see Binance and OKX blatantly attack Hyperliquid with JELLYJELLY. Although HL survived, HYPE investors must now take the risk of future attacks very seriously.
It might not be a similar attack, but regulatory pressures as CZ is becoming a “nation state strategic crypto advisor.” What else do you think he tells politicians? Oh these non-KYC perp exchanges so bad bad, maybe?
Anyway, I hope HL manages to come after CEX spot market business with more transparent listings that don’t cost a fortune that rekts the protocol’s finances.
I have much more to say about HYPE as it’s my biggest altcoin bag. But Hyperliquid has become a movement to challenge CEXs, especially after the Binance/OKx attack.
Hyperliquid.
Protocols → Platforms
If you follow me on X, you might’ve read my subtle shill of Fluid in the context of protocols evolving into platforms.
Click on the picture to read it in full. The main point is that protocols risk becoming commoditized infrastructure while user-facing apps reap most of the benefits.
Has Ethereum fallen into the commoditization trap?
To escape the trap protocols need to become like Apple Store so that 3rd party devs could build on top, so the value would stay in the ecosystem.
Uniswap v4 and Fluid attempt to do it with Hooks, while teams like 1inch and Jupiter build their own mobile wallets. LayerZero just announced vApps, too.
I believe this trend will accelerate. Those who can capture liquidity, attract users, and find ways to monetize the flow while rewarding token holders will be the big winners.
Crypto within the Changing World Order
I wanted to cover more areas of big changes in crypto, ranging from stablecoins to CT becoming more lost as crypto is becoming more complex.
Crypto Twitter offers less alpha now because the industry is no longer insular.
Previously, we could launch Ponzis with simple game rules and as regulators either misunderstood crypto or ignored it, hoping it would disappear.
Year after year, regulatory discussions have become more prevalent on CT. We’re lucky that the US is becoming pro-crypto and it feels we are on the cusp of mass adoption thanks to stablecoins, tokenization, and Bitcoin becoming a store of value.
But this can change very fast: The US government might finally realize that BTC is indeed undermining the US dollar.
Beyond the US regulatory and cultural environment is much different. China is not showing any signs of becoming pro-crypto. (correct me if I am wrong).
The EU is increasingly focused on control, especially as we shift from a welfare state to a warfare state, where controversial decisions can be pushed through in the name of "security."
The EU is not prioritizing crypto and sees it as a threat:
“EU to ban anonymous crypto accounts and privacy coins by 2027”
If blockchain data can't be deleted individually, "this may require deleting the whole blockchain."
“EU watchdog to set punitive capital rules for insurers holding crypto”
We need to evaluate attitudes toward crypto in relation to the general political situation. And the broad trend is deglobalization and countries closing down doors to enter and leave.
EU moves closer to visa-free ban for citizenship by investment countries.
China's exit bans multiply as political control tightens under Xi
The major unknown is the role crypto will play in the new world order and during the transition period.
Will crypto serve as a tool for capital freedom especially if/when capital controls start? Or will countries try to crack down on crypto by making it comply with increasingly restrictive regulations?
Vitalik’s post on “tree ring model of culture and politics,” explains that crypto is still forming its norms and isn’t hardened like banking or IP laws.
The 1990s internet embraced a "Let it grow!" approach, with few rules and lots of freedom. In the 2000s and 2010s, the attitude towards social media shifted to "This is dangerous. Control it!" The 2020s see crypto and AI still battling between openness and regulation.
Governments were lagging behind but now they are catching up.
I hope they choose to embrace openness, however, the global trend of closing borders makes me extremely worried.
Hyperliquid.