I spent eight years of my youth sinking into the crypto "casino"

Author: Ken Chan, Co-founder of Aevo

Compiled by: Hu Tao, ChainCatcher

Original Title: Deep Reflection: I Wasted Eight Years in the Crypto Industry

Initial Motivation

I was very interested in politics as a teenager. Among all the books that radicalized my thinking, none influenced me more than Ayn Rand’s works (The Fountainhead, Atlas Shrugged). In 2016, I donated to Gary Johnson with a heart full of libertarian idealism. Besides being an ardent Rand fan, I was also passionate about computer programming, so crypto was a natural fit for me. The spirit of cypherpunks deeply attracted me. The concept of Bitcoin as a private bank for the wealthy fascinated me. The idea of being able to cross borders with a billion dollars in assets was always deeply shocking to me.

However, as time went on, I felt I lost my way in crypto. After going full-time, the allure of crypto’s original transformative power gradually faded. I became disillusioned with my target customers and the group I was supposedly fighting for. I completely misunderstood the difference between the real users of crypto and its marketing targets. I fully bought into the claim that crypto would help decentralize the financial system, but in reality, it’s just a super-system for speculation and gambling—a replica of the existing economy.

Reality hit me hard. I wasn’t building a new financial system. I built a casino. A casino that doesn’t call itself a casino, but it’s the largest, always-online, multiplayer casino ever devised by our generation. On one hand, I am proud that I spent my twenties building this casino.

On the other hand, I feel like I wasted my entire twenties on this. I wasted my life on this, but at least I made a fair amount of money.

Watch What They Do, Not What They Say

Crypto is confusing. On one hand, some advocates claim they want to completely replace the existing financial system with a blockchain-based system. I can easily imagine such a system—your bank account only needs to hold USDC or BTC, and you could send a billion dollars to anyone in the world in seconds. It’s a powerful idea, and I still believe in it.

But incentives have completely distorted reality. In the real world, every market participant is happy to pour money into developing the next generation of Layer 1s (Aptos, Sui, Sei, ICP, etc.). The outcome of the 2020 Layer 1 war was that there was only one winner—Solana. This led to a strong bias toward the fourth spot (Bitcoin, Ethereum, Solana, and then everything else). This incentive structure supports hundreds of billions of dollars in market cap, but does it really drive net growth toward an ideal new financial system? Despite VCs writing 5,000-word essays to argue this, the answer is no—it hasn’t created a new system. In fact, it’s almost burned everyone’s money (retail and VC alike), so there’s less money for everyone in the new financial system.

I’m not just picking on L1s. In crypto, I can point to many similar examples—spot decentralized exchanges (DEXs), real-time decentralized exchanges, prediction markets, meme coin platforms, and so on. The hype and competition in these niches make little positive contribution to the ultimate goal of building a better financial system. Contrary to what VCs say, we don’t need to take the casino to Mars.

The Financialization of Gambling

If I said I had no economic motivation to join crypto, that would be a lie. As a reader, you might think I’m being hypocritical—having made enough money and now deciding to leave the crypto industry. Yes, maybe I am a hypocrite. But maybe I’m just disgusted with the cesspool of economic financialization and gambling.

Making huge profits from each other in a zero-sum game is not a path to long-term wealth accumulation. It might look like it on the surface, but it’s not true. After eight years hustling in crypto, my ability to judge sustainable business models has been completely destroyed. In crypto, you don’t need a successful company or product to make money. The industry is full of high market cap tokens that almost no one cares about.

That’s not how the real world works. If you want to truly create value for customers, and not just gambling plus entertainment (by the way, that’s exactly what casinos do), this zero-sum business model simply doesn’t work.

Conclusion

I used to think financial nihilism was a cute and harmless concept. And I thought it was fine to keep pushing zero-sum games onto the next generation. I have no doubt that Bitcoin will one day hit $1 million. But that has nothing to do with the financial games this industry is concocting.

This industry mindset is extremely toxic, and I believe it will lead to a long-term collapse in social mobility for the younger generation. You’re seeing it with your own eyes, and I think what really matters is that we have the courage to resist the temptation of worthless games.

CMS Holdings once said, “Do you want to make money, or do you want to be right?” This time, I choose to be right.

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Editor’s Note: Since 2019, Ken Chan has worked in development at Coinbase and Zilliqa, and in 2021 co-founded the decentralized derivatives protocol Aevo (formerly Ribbon Finance) as CTO before leaving in May this year. Currently, AEVO’s fully diluted market cap is $45 million, down about 99% from its peak.

Meanwhile, Ken Chan’s article sparked much discussion among industry insiders on X. ChainCatcher has compiled some of the most popular responses below:

Austin Federa, Co-founder of DoubleZero:

I respect you for realizing your moral code doesn’t align with your current actions. That takes courage and self-reflection, and it’s not easy. But from a broader perspective, I think crypto’s natural state is almost the final state of the economy, and I don’t know if that’s something we should worry about. The allure of crypto is that it strips us down to our most essential, primal levels, forcing us to build from first principles. I often think of the opening of the show “Silicon Valley” because it truly reflects the self-deception that exists in the traditional economic order. What I love about crypto is that it confronts all hypocrisy and reveals the truth.

Haseeb Qureshi, Managing Partner at Dragonfly:

There have always been casinos in crypto. The first breakout app on Bitcoin was Satoshi Dice (2012). The first breakout smart contract on Ethereum was King of the Ether Throne (2015), which was basically a Ponzi scheme. Once you have programmable money, what people first think of is gambling and playing stupid games. It’s human nature.

…

Casinos are flashy and get a lot of attention on social media (where people can quickly win and lose fortunes, making it easy to believe it’s your lucky day), but if you only focus on the glitz, you’ll miss the bigger story. The reason I first entered this industry, which felt like science fiction ten years ago—crypto as a better vessel for finance, forever changing the nature of money, and permanently shifting the power balance between individuals and governments—is now becoming reality. Bitcoin is challenging state authority. They’re even starting to buy Bitcoin on their own balance sheets. Stablecoins are influencing monetary policy. Central banks are scrambling to respond. Uniswap and AAVE, permissionless smart contracts, now rival the size and value of unicorn fintech companies. The world is changing dramatically around crypto. Maybe it’s taking longer than you think, but the adoption of transformative technology is always slower than you expect.

…

Everyone knows it took the internet over 20 years. Do you really think we’d replace finance—the most regulated, government-watched industry in the world—in just 5 years? If you’re upset because you didn’t get rich off some “meme coin L2” or whatever, take a deep breath. This industry doesn’t owe you anything.

Yet, believe it or not, all this psychological compromise on timelines is actually beneficial. Forests need regular clearing of deadwood to stay healthy. Without occasional fires to clear things out, rot spreads and eventually the entire forest decays. It’s a brutal reality, but if you want sustained growth, you have to clear out what no longer serves. All this negativity on the timeline needs to be purged in some way. Let those people keep leaving, and the air will get fresher. They’ll either change their minds and look to the future, or they should leave so the rest of us can keep building. Because the work isn’t done yet.

Mason Nystrom, Partner at Pantera Capital:

There’s no doubt that Bitcoin will one day hit $1 million. But that has nothing to do with the financial games this industry is concocting. I see more and more people becoming pessimistic about crypto and its social value (or lack thereof). I think this view is wrong. Of course, speculation and abuse exist in crypto. The crypto market is real and huge, and many people lose money at the table. But it also contains a lot of overlooked positive social value. Bitcoin has become a global, non-sovereign asset that anyone in the world with an internet connection can own. It gives people worldwide a veto/opt-out mechanism, shifting economic control from the state to the individual. Stablecoins provide better financial security for people around the world, improving lives with faster settlement, higher yield, and lower transaction costs. Banks don’t actually provide asset yields. Stablecoins are changing that.

…

Crypto offers a new financial system, but also induces speculation and degeneracy. It’s building a new financial system where people can build whatever they want. Some will build casinos, some will develop new payment mechanisms. Some will build criminal platforms, some will develop ways for more people to access credit. The new financial system won’t be perfect, but it will be far better than the status quo. If you only see crypto as a casino, maybe you should step back and look at the macro benefits crypto has already brought and will continue to bring to society.

Crypto _ Painter, Crypto Trader:

Yeah, that’s the reality. You can see the author’s “dao heart shattered,” bluntly saying the crypto market has become a place for gamblers and casinos…

The funny thing is, I heard the same sentiment in 2018, and again in 2022. If you understand how the crypto market works, you’ll see that when outside liquidity floods in, the rise of gamblers and casinos is inevitable…

And gambling markets naturally deplete excess liquidity…

So the crypto market forms a cycle of “value investing” – “faith investing” – “emotional speculation” – “total disappointment”…

Looking back at early 2023, the louder the voices touting BTC and value investing were, the colder and quieter things are now.

But that’s how the crypto market grows—through continuous cycles of “belief” – “doubt” – “denial.” We don’t need to believe any specific chain will ultimately succeed; we just need to believe the narrative of decentralized networks will endure.

In the future, new liquidity will enter, then come booms and busts, but as long as the scope of the narrative expands, the long-term direction of the market will be upward.

2025–2026 will be another phase of doubt, and there may be another stage of disappointment in the future, but human nature doesn’t change. Whether it’s investing or speculating, both have lasting value.

Casinos and gamblers are just small outlets to release bubbles. The market has its own self-correcting mechanisms, so in a way, we should thank those trash casinos and projects.

Their emergence shows there are parts of the market that need self-regulation. Without bubbles, there’s no bubble exploitation.

Learning to accept these disgusting market phenomena is the only way to accept the next scale of bubble expansion.

alan, Co-founder of Quai Network:

You’re absolutely right. Crypto has gradually become a tool; it’s no longer committed to advancing financial sovereignty or growing the pie, but rather to extraction. The line between building a financial system that benefits humanity and turning it into a tool for gambling is blurred. Every project and founder has to make a choice: do they truly want to make the world better, or just play the game? … Although it’s easy to become numb, I suggest you look deeper and find the projects that are still advancing the cypherpunk spirit. That’s where the real excitement is. That’s where positive-sum games happen. Interestingly, I think the next direction for crypto will actually look more like Bitcoin. Narratives around privacy (like Zcash, Monero), legacy coins (like Dash, Decred), and proof-of-work (PoW) projects will return.