Crypto’s Theater Is Becoming More Surreal

You know times are interesting in crypto when some of the most enthusiastic founders and developers are wholeheartedly agreeing with criticism. At EthCC, the community-led Ethereum conference held in Paris, France this year, I gave a speech titled “Crypto is a Theater Right Now,” breaking down the many ways decentralized finance and other crypto efforts have gone awry. A version of the talk reposted on Twitter also seems to have struck a nerve.

Camila Russo is the founder of The Defiant and author of “The Infinite Machine: How an Army of Crypto-hackers Is Building the Next Internet with Ethereum.”

In short, I’m seeing people in crypto putting on a show. A facade. And after 10 years in the industry, first covering crypto for Bloomberg, writing The Infinite Machine, then founding The Defiant, it’s left me wondering if the magic is still here.

Through all the booms and busts I always stood adamant that the hype would ultimately fade and “real” use cases would prevail, like Argentines seeking financial freedom, which is what originally drew me in the space.

But it doesn’t seem like we’re further along on that front. In some ways, the theater has gotten more surreal.

Of course, much happened during the recent bull market beginning in 2020 and the resulting bearish turn that’s followed us into 2023 that has moved the space forward and should be celebrated.

Decentralized autonomous organizations (DAOs) helped organize individuals across the world towards working towards the same goal. Non-fungible tokens (NFTs) inspired a new wave of users to be excited about owning digital property. Ethereum transitioned to proof-of-stake, a massive undertaking that showcased the possibilities of decentralized development. Layer 2s started actually delivering on a more scalable blockchain infrastructure and real world assets (RWA) emerged as a potential bridge to non-speculative use cases.

But at the same time the failings of DeFi and Web3 have become more and more apparent, with different forms of theater emerging: decentralization theater, governance theater, community theater, all surrounded by a game of TVL musical chairs.

Immutable, really?

Developers are portraying so-called decentralized apps as immutable protocols, removing intermediaries and controlled fairly via pre-written rules…