Crypto VC turns to AI: a “coming-of-age ceremony” that began with a collapse of belief

By Doraemon B, Deep Wave TechFlow

Original title: Kyle left the crypto industry and I'm a little sad

*This article is an expression of personal opinion

On February 5, a morning that began in the midst of a big drop, I was tweeting as usual, and Kyle Samani, a partner of the well-known crypto VC Multicoin, suddenly popped out of the information stream. My finger stopped on the screen for a few seconds, and my heart fluttered. Why him?

I know Kyle, a “one-way acquaintance” to be exact.

In my junior year in 2020, I first read Multicoin's “Call to Order” paper. It was refreshing, and Thesis-Driven (Thesis-Driven) was imprinted in my mind.

It turns out that VC can write something like this. Instead of using the PPT-style “We are optimistic about the long-term value of the XX circuit” and say something ambiguous, it directly gives a clear logic of long and empty, discord, and a clear opinion.

Kyle's image on Twitter has always been clear: aggressive, mean, and offended countless people.

He dared to publicly empty its expansion path when everyone was optimistic about Ethereum, to bet firmly when no one else was optimistic about Solana, and to publicly and transparently disclose losses and review decisions as soon as FTX exploded and Multicoin lost heavily.

A lot of people in the Western crypto community hate him and think he's too arrogant, but I've always felt that the industry also needs people like him.

Now he's gone. Move to AI, longevity technology, and robots. I'm suddenly a little sad: I don't even want to play with Kyle, what's wrong with this industry?

When Kyle leaves

What makes me sad isn't another VC turning to AI. Who hasn't talked about AI this year?

What saddens me is that Kyle from Multicoin is, in my opinion, a very determined person.

What is the investment logic of most Crypto VCs? Cast a wide net, bet on the racetrack, say pretty things but never make judgments, or just know how to throw.

Looking back at the investment reports of well-known institutions, it's always “We believe in the future of decentralization” and “We are optimistic about innovation in the XX field”, but you'll never see a firm phrase “We believe Project A will outperform Project B”.

This is not prudence; this is a world accident. Anyways, no matter who wins, they can say “Look, we've already laid out”.

Kyle, or Multicoin, is not like that; he dares to make a “life or death judgment.”

In 2017, it was publicly stated that Ethereum's fragmentation route was a dead end. Betting on EOS failed, and in 2018 they also bet on Solana. Helium strongly believes that DePin is the only non-financial scenario where Crypto can be implemented.

Yes, he missed a lot and made big mistakes. EOS and FTX are bloody lessons. But he never hid it up; he revealed as much as he lost; there were quite a few mistakes to admit.

He's not the smartest VC, not the gentlest evangelist, but he's the most “real” one. His departure symbolizes that some kind of “honesty and sharpness” is disappearing from the industry.

That tweet that was deleted in seconds

What bothers me even more is the tweet he posted before he left, even though it was deleted in seconds.

“Cryptocurrency isn't inherently as fun as many crypto enthusiasts would expect,” he said. I used to believe in the Web3 vision and in dApps. Now I don't believe it. Blockchain is mainly an asset ledger, and although it can reshape finance, it has limited potential in other fields.”

Why delete it in seconds? Because they call it “infidel.”

Why can't you help but post it? This is a person stuck between faith and reality. It took 8 years, invested hundreds of millions of dollars, and finally came to a conclusion.

I understand this feeling very well, because this is my intention this year.

What did we believe when entering 2021? Decentralized social networking will disrupt Twitter, on-chain identity (DID) will let users control their own data, and GameFi will allow players to truly “own their assets.” In the Twitter timeline back then, everyone was discussing “how Web3 will change the world”, and every new project was like a gateway to the future.

What about the reality of 2025? Friend.tech is dead and Lens Protocol is useless. ENS has become a hype tool, and no one actually uses DID except for wallet addresses. The collapse of Axie and StepN proved that “X to Earn” is just Ponzi's vest.

But Kyle didn't completely deny it either. He is still optimistic about financial applications such as stablecoin, DeFi, and RWA, as well as DePin projects such as Helium, and is still betting on Zama's fully homomorphic encryption technology.

The question is: do these things still require “faith”? Or do we just need rational calculations?

Kyle's departure was described by some as a betrayal. In my eyes, it was considered a “disenchantment”. From a Crypto Evangelist to a Crypto Realist, this transformation is probably the coming-of-age ceremony that the entire industry must experience.

Last time we lost money, this time we lost confidence

When FTX exploded in 2022, the entire industry hit rock bottom. Luna returned to zero, Three Arrows went bankrupt, and the market fell back on its back. But at that time, everyone still had a belief in their hearts: the market had collapsed, but we were right. As long as you stick around, a bull market will prove everything.

At that time, we also believed in the “end story” of Ethereum, from PoW to PoS, from single chain to modularization, and thought it was the only way to a “world computer.”

We also believe in Solana's “performance revolution” and believe that as long as it survives the bear market, the high-performance chain will win.

We also believe in the “paradigm shift” of Web3, and believe that the next chapter of the internet must be decentralization.

What about 2025 now?

The objective data is actually much better than the previous low. BTC once broke through $100,000, the ETF passed, and Crypto is more closely linked to Wall Street.

However, the subjective perception is quite the opposite: the price is higher, but the confidence is lower.

The “culprit” or “mirror mirror” is AI.

When ChatGPT was released in 2023, everyone was discussing “how AI will change the world.” What is Crypto discussing in the same period?” Should L2's sequencer be decentralized?” One is talking about a productivity revolution, and the other is debating technical details.

Over the next two years, the progress of AI was simply dazzling: Gemini, Claude, and ChatGPT compete for supremacy. Every day is a different new thing, and recently everyone is obsessed with OpenClaw.

What about Crypto? There are more and more L2s and chains, but no one can explain “why 100 L2s are needed,” and even Vitalik is reflecting on past route mistakes. NFTs, GameFi, and SocialFi took turns, but they were all fleeting.

Growing up to today, the biggest innovations of this cycle turned out to be Meme Coin and “reinventing gambling.”

I often ask myself late at night: AI is using technology to redefine productivity, and Crypto is using financial games to redistribute wealth. The former is creation; the latter is transfer. What exactly are we building?

Kyle's departure was essentially a “value choice.”

He chose to pursue AI, longevity technology, and robots, which are actually in the field of “expanding human frontiers.” Crypto, at least for now, is more like a premium casino.

But I don't want to leave

Having said that, you might think I'm about to announce my withdrawal too.

But no, I want to “gamble” again.

Kyle can leave because he is rich and free to pursue bigger dreams. However, for young people like me, Crypto still means: a relatively fair “class transition” channel, a “permissionless” testing ground. It doesn't require education, background, or connections; it only requires awareness and courage; an emerging industry that is not completely monopolized by the elite.

More importantly, maybe Web3's grand narrative has failed, but that doesn't mean Crypto is worthless.

A revolution in financial infrastructure has taken place. The daily settlement volume of stablecoins has surpassed Visa, and DeFi allows people around the world to use financial services and RWA 7x24 hours a day.

Most importantly: I haven't figured out my answer yet.

It took Kyle 8 years to come to the conclusion that “Crypto is just a ledger of assets.”

But I'm still just a new recruit, so why make a decision now?

Maybe in a few years, I'll leave like him. But at least for now, I want to stay on the table and see if the industry still harbors possibilities we haven't seen.

After a few years, Crypto at that time was probably no longer a revolution that “disrupted everything”, but rather a value settlement layer in the AI era.

At that point, I'll order a cup of coffee and talk about the scenery I saw along the way.

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