IOSG Founder's Open Letter: How Should China's Crypto OG Keep the “Church”

author:Jocy, Founder of IOSG Ventures

Original title: A letter from the founder of iOSG to China's Crypto OG: Don't let casinos eat up the cathedral

Part 1: Who's Staying? More importantly, why stay

Last year I wrote about AI and crypto talent mobility推Some people commented: It's good for excellent people to go to AI and participate in building a future that is bound to happen.

But recentlypodcastsThe conversation made me realize that this judgment wasn't profound enough. The question is not only “who will stay”, but more fundamentally, “why stay” and “can ecology support revolution after staying”. Only people who have experienced bulls, failures, and friction between reality and ideals who remain in the industry and continue to build can lead the revolution in the coin industry.

I've been talking a lot about 2023-2025 crypto entrepreneurs in recent months. Many Chinese teams only raised 5 million to 7 million dollars around 2023. In the current environment, it is difficult to reach the next round. This kind of runway has survived for just over two years until now, and then stagnated to launch on the exchange. Countless airdrops and tokens given out hit the market, and the token price dropped all the way down. The answer given by the entrepreneurs was that the token was about to return to zero, lost its reputation in the crypto industry, and then turned away.

Looking back at Asia, there are fewer and fewer investors willing to support early-stage entrepreneurs. Without investor support, no determined entrepreneurs are willing to step back into the crypto industry, and the ecological progress of the entire industry is unsustainable — how can the crypto war between China and the US compete?

In April of last year, I wrote a tweet about a Portfolio core team starting an AI app startup, and the most prestigious talents in the industry have all left. Until today, more and more people are making this choice. This is no accident; what is reflected behind it is a more systemic problem: after making money, Chinese and American crypto OGs chose a completely different path.

# Part 2: How an American OG “supports the Cathedral”

When US crypto OGs make money, what do they think?

**Brian Armstrong** launched the Research Hub after listing Coinbase as the first mainstream crypto exchange in the US to try to fundamentally change the incentive mechanism for scientific research. **This is not a simple donation, but a restructuring of the entire knowledge production system.

**Naval Ravikant** As an early Bitcoin philosopher, he not only promoted ICOs through AngelList and used Bitcoin as a global crowdfunding tool, but also incubated CoinList to provide a compliance framework for token issuance and fund the Zcash team. His ideas about money, cryptoeconomics, and decentralization have profoundly influenced the entire industry.

**Chris Dixon** led the Coinbase B-round in 2013, becoming the first mainstream VC to publicly bet fully on Crypto. He grew a16z crypto from $300 million in 2018 to over $7 billion, not only investing in projects, but also establishing crypto schools to systematically train industry talents.

**Dan Robinson** is not only an investor, but also a builder at Paradigm. He participated in the early development of Uniswap and was a co-author of Uniswap V3. He promoted the development of the modern MEV auction model in the early stages of FlashBots, participated in Plasma research (the predecessor of Hyundai Rollups), and led the Optimism seed round. This kind of deep technical participation and ideological output is true ecological construction.

**Michael Saylor** transformed MicroStrategy into Strategy, held $67 billion worth of Bitcoin (over 3% of the total circulating supply), and continued large-scale financing through the issuance of shares and innovative financing methods of low-interest bonds, and became an iconic figure in the institutionalization of Bitcoin.

**Barry Silbert** founded DCG and launched the GBTC Grayscale Bitcoin Trust, which became the main channel for traditional investors to gain exposure to Bitcoin, and its Genesis Trading and CoinDesk became industry infrastructure.

Chainlink's founder**Sergey Nazarov** worked as a software engineer at Google and invented the decentralized oracle network in 2017, which has supported over $7 trillion in transactions. Having experienced multiple cycles of wealth and freedom of wealth, he has personally traveled to Hong Kong and other places to promote Chainlink standards, and is committed to unifying DeFi and traditional finance through CRE to build a global “internet contract” ecosystem.

**Rune Christensen** After coming into contact with Bitcoin in 2011, she sold her English teacher recruitment business in China and fully invested in crypto. MakerDAO was founded in 2015 to launch DAI, a decentralized stablecoin, and became one of the first and largest DeFi protocols on Ethereum. It has been on the front line of DeFi governance for more than 10 years. In recent years, the MKR brand was reshaped as Sky, the Spark agreement was launched to promote the integration of DAI and US debt, and became a pioneer in the integration of crypto and traditional finance.

**Arthur Hayes** founded BitMEX to launch perpetual contracts, introduced traditional financial derivatives into the crypto market, and the funding rate mechanism became the industry standard. He was pardoned by Trump in 2022 for violating bank secrecy laws, and then co-founded the Ethena stablecoin agreement with Guy. Arthur has been exporting his crypto views to the industry for the past few years and has never stopped.

What characteristics do these people have in common? What I think about after making money is not how to quit, but how to attract the best talents to enter, how to change the world's applications, and how to establish systematic ecological support. They are not only investors, but also builders, thought leaders, and contributors to public goods.

# Part 3: China's Crypto OG Systemic Dilemma

On the other hand, looking at the Chinese crypto industry, fundamental differences in the policy environment limit the space for long-term investment. Most OGs chose to quit rather than give back after early success and a certain amount of wealth accumulation.

The absence of historical narratives. American crypto has had a grand narrative of “changing the world” since the beginning, and the tradition of building public goods from the Carnegie and Rockefeller era has continued in the crypto field. China's cultural accumulation in this area is relatively weak.

We lack a systematic talent development mechanism (compared to US crypto schools), lack long-term investment in crypto talent and infrastructure (compared to projects such as YC/AllianceDAO and Research Hub), and lack continuous thought output and industry voice (compared to Paradigm's research-driven and Naval's philosophical influence).

This is not a personal moral issue; it is a systemic issue caused by multiple factors such as lack of historical narratives, policy uncertainty, and cultural genetic differences.

What causes this difference?

Many entrepreneurs and developers aim for more than just getting rich; they want to make world-changing apps, leave a mark on history, and be recognized. All the best people just need to keep an eye on them, and they won't come back.

When Web3 is reduced to a big casino, and when the industry's mainstream narrative degenerates from “changing the world” to a pure game of wealth, the best talents will vote with their feet. It's not that they don't want to make money, it's that they want to “make meaningful money” — getting rewards in the process of creating value rather than reaping others in a zero-sum game.

When no one in the environment pursues true ideals and values, these people leave. The narrative is not fictional; it directly affects the talent structure. When an industry is unable to provide the vision and value recognition of compelling, no amount of financial incentives can retain those value-driven talents.

The vicious cycle we're seeing right now:

Lack of new value creation → The market can only play with inventory → Stock games strengthen speculative mentality → drive away people who want to do incremental innovation → Less value creation → The market relies more on inventory games

This is a microcosm of the era of speculation in the Chinese currency industry.

# Part 4: Starfire Can Spark Fire Even Under Restraint

Some people might say, “The environment is different, so you can't simply compare them. That's right. I'm not asking the Chinese OG to do the exact same thing as the American OG.

There may also be people who say: Even if you want to do it, you can't do much, so why waste it. But I believe that even in a restricted environment, these small steps are still meaningful to support open source developers, run technical community events, and invest in early-stage technology teams. Systematic efforts have a compound effect.

Some may also say that putting too much emphasis on idealism is hypocritical; crypto is financial innovation. But this is not an either/or choice. A healthy ecosystem requires a sufficient percentage of people to be value-driven. If it is completely dominated by people who are financially driven, they will fall into a zero-sum game for a long time, 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 the industry forward. *It is in the midst of such a difficult environment for the crypto industry, particularly in China, that they are still willing to continue to support and help the industry.

Starfire can ignite a source of fire. We can also build a cryptographic positive feedback ecosystem as strong as the US.

# 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. (Make sure the cathedral isn't eaten by casinos for the next 100 years). This metaphor also applies to the crypto market:

Cryptocurrency and blockchain have achieved unprecedented success. It is a combination of a grand cathedral, which has created an economic system never seen before in the world. At the same time, it also comes with a huge casino next to it.

Very tempting, especially now, the temptation is to walk into that casino. In the casino, everyone has a lot of fun and money flows frequently, but you also have to make sure that the cathedral is supported.

Crypto must ensure that this cathedral is not swallowed up by casinos for the next 100 years.

The Bitcoin and Ethereum cathedrals are still majestic, and the big casinos of some exchanges sing night and night. But if the prosperity of casinos does not give back to the cathedral, the building that creates real value will gradually be abandoned, and eventually the entire ecosystem will lose its roots.

What Brian Armstrong, Vitalik, and Chris Dixon did was essentially supporting the cathedral. They're making sure that the casino boom doesn't eat up the cathedral.

# Part 6: The only path to longevity

Going back to my judgment a few months ago, now I need to add a deeper understanding:

Those left behind after experiencing bulls and bears are indeed likely to lead the revolution, but simply “staying” is not enough. More importantly, “why stay” and “can ecology support the revolution”.

Revolution requires the support of an entire ecosystem. The continued development of US crypto is not because people are more able to endure, but because a systematic feedback mechanism has been established to allow the ecosystem to renew and evolve itself.

As an institutional investor, IOSG will also continue to take the initiative to take responsibility for change:

* Systematically invest in more tier 1 startup teams, even if short-term returns are not obvious

* IOSG EIR will support and fund more entrepreneurs currently struggling with startup financing and establish a stronger talent development mechanism

* Continue to export and share first-line industry research and thinking

* Focus on long-term value creation rather than short-term hype in project investment choices

⠀ We need to redefine success. Wealth transfer in a zero-sum game vs. wealth creation in the process of creating real value may be the same but the meaning is completely different.

If Chinese crypto institutions and capable participants can make a breakthrough in the feedback mechanism, it may become a key force in changing the ecosystem. This is not only a moral responsibility, but also a rational choice for long-term benefits — only a healthy ecosystem can incubate great projects, attract outstanding talents, and create sustainable value.

This is true long-term doctrine, and the only way to ensure that cathedrals are not eaten by casinos.