AEVO Co-founder Reflection: I Spent Eight Years in Crypto Gambling

Author | Ken Chen

Translation | ChainCatcher

Original link:

Initial Motivation

Since my teenage years, I have been very interested in politics. Among all the books that shaped my radical thinking, Andre Land’s works (“The Source,” “Atlas Shrugged”) had the greatest influence. In 2016, with a heart full of liberalism, I donated to Gary Johnson. Besides being a devoted follower of Land, I was also very interested in computer programming, so cryptocurrency was a natural fit for me. The spirit of cyberpunk deeply attracted me. The idea of Bitcoin as a private bank for the wealthy fascinated me. Being able to cross borders with assets worth billions of dollars has always been a profoundly shocking concept to me.

However, over time, I felt I lost my direction in the crypto space. After committing full-time, the initial allure of cryptocurrencies’ transformative power gradually faded. I became disappointed with my target customers and the groups I was truly fighting for. I completely misunderstood the difference between the true users of cryptocurrency and its promoters. Cryptocurrency claims to help decentralize the financial system, and I fully believed this, but in reality, it is just a super system for speculation and gambling, merely a replica of the existing economy.

Reality gave me a harsh slap. I am not building a new financial system; I built a casino. A casino that doesn’t call itself a casino, but it is the largest-scale, 24/7 online multiplayer casino conceived by our generation. On one hand, I am proud that I spent over twenty years building this casino. On the other hand, I feel I’ve wasted my entire twenties on it. I’ve wasted my life on this, but at least I made a lot of money from it.

Watch what they do, not what they say

Cryptocurrency is confusing. On one hand, some promoters claim they want to replace the existing financial system with a blockchain-based one entirely. I can easily imagine such a system—your bank account only needs to hold USDC or Bitcoin, and you can send a billion dollars to anyone in the world within seconds. This idea is very powerful, and I still believe in it today.

But, the incentive mechanisms have completely distorted reality. In the real world, every market participant is eager to invest in the development of the next-generation Layer 1 (Aptos, Sui, Sei, ICP, etc.). The result of the Layer 1 war in 2020 was that only one winner emerged—Solana. This led people to strongly favor the fourth position (Bitcoin, Ethereum, Solana, and other projects). This incentive structure supported a market cap of hundreds of billions of dollars, but did it truly promote net growth toward an ideal new financial system? Despite venture capitalists writing 5000-word articles to argue this point, the answer is no; it did not foster the creation of a new system. In fact, it almost burned through everyone’s money (both retail and VCs), so in the new financial system, everyone’s money is now less.

I am not just criticizing L1 platforms. In the crypto world, I can cite many similar examples—spot decentralized exchanges (DEX), real-time decentralized exchanges (DEX), prediction markets, meme coin platforms, and so on. The frenzy and competition in these niches do not contribute positively to the ultimate goal of building a better financial system. Contrary to what venture capitalists say, we do not need to move the casino to Mars.

The Gambling of the Economy

If I say I joined the crypto space without any economic motivation, that would be a lie. As a reader, you might think that since I’ve made enough money, I decided to exit the crypto industry, which sounds hypocritical. Yes, maybe I am hypocritical. But perhaps I am also just fed up with the mud pit of financialization and gambling.

Gaining quick profits through zero-sum games is not a sustainable way to build wealth long-term. It seems that way on the surface, but in reality, it’s not. Having been in the crypto industry for eight years, I have completely lost my ability to discern sustainable business models. In crypto, you don’t need a successful company or product to make money. The industry is flooded with tokens of enormous market cap that are almost ignored.

That’s not how the real world works. If you want to genuinely create value for customers, not just gamble for entertainment (by the way, that’s exactly what casinos do), then this zero-sum business model is fundamentally flawed.

Conclusion

I once thought financial nihilism was a cute and harmless concept. And I thought it was okay to keep pushing zero-sum games to the next generation. I have no doubt that Bitcoin will someday reach 1 million dollars. But this has nothing to do with the financial games being concocted in this industry.

This industry mentality is extremely harmful, and I believe it will lead to a long-term collapse of social mobility among the younger generation. You have seen all this yourself, and I think what really matters is that we must gather the courage to resist the temptations of these worthless games.

CMS Holdings once said a profound statement: “Do you want to make money, or do you want to prove that you are right?” This time, I choose to prove that I am right.

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Editor’s note: This blogger’s article has sparked much discussion among industry insiders on X. Here are some popular responses:

Austin Federa, Co-founder of DoubleZero:

I respect you for realizing that your moral compass is out of sync with your current actions. It takes courage and self-reflection, and it’s not easy. But from a broader perspective, I believe the natural state of cryptocurrency is almost the final state of the entire economy. I don’t know if this is something we should worry about. The appeal of crypto is that it strips us down to the most fundamental, primal level, forcing us to build from first principles. I often think of the opening scene of the TV show “Silicon Valley” because it realistically depicts the self-deception within traditional economic order. I like cryptocurrency because it confronts all hypocrisies head-on and reveals the truth.

Haseeb Qureshi, Managing Partner of Dragonfly:

There has always been a casino in crypto. The first hit application on Bitcoin was Satoshi Dice (2012). The first hit smart contract on Ethereum was King of the Ether Throne (2015), which is essentially a Ponzi scheme. Once programmable money exists, people’s first thought is to gamble and play foolish games. That’s human nature.

……

Casinos look glamorous and are highly visible on social media (where people can quickly win and lose fortunes, easily convincing themselves this is their lucky moment), but if you only focus on the superficial glamour of casinos, you will miss the bigger story. The reason I entered this industry ten years ago is that, in my view, it was like science fiction—cryptocurrency as a better medium for finance, forever changing the nature of money, and permanently shifting the balance of power between individuals and governments. Today, this story is becoming reality. Bitcoin is challenging national authority. They are now also buying Bitcoin on their balance sheets. Stablecoins are influencing monetary policy. Central banks worldwide are responding. Permissionless smart contracts like Uniswap and AAVE now surpass unicorn fintech companies in scale and value. The world is undergoing dramatic change around cryptocurrencies. It may take longer than you think, but the adoption of transformative technology is usually slower than expected.

……

It’s well known that the internet took over 20 years to develop. Do you really think we can replace the financial industry—one of the world’s most regulated and government-focused sectors—in just five years? If you’re frustrated because you participated in some “meme coin L2” project and didn’t get rich, take a deep breath. This industry owes you nothing.

But, believe it or not, all these mental concessions to the timeline are actually beneficial. Forests need regular clearing of dead branches to stay healthy. Without occasional fires to clear decay, rot will spread, and the entire forest will eventually decay. It’s a brutal reality, but the only way to sustain growth is to clear out what no longer works. All these negative emotions on the timeline need to somehow be eliminated. Let these people leave, and the air will be clearer. They will either change their minds and refocus on the future or leave so that the others can continue working. Because the work is not finished.

Mason Nystrom, Partner at Pantera Capital:

I have no doubt that Bitcoin will someday reach 1 million dollars. But this has nothing to do with the financial games being manufactured in this industry. I see more and more people pessimistic about crypto and its social value (or lack thereof). I believe this view is wrong. Of course, speculation and abuse of crypto exist. The crypto market is real and huge; many people are losing money at the gambling tables. But it also contains a lot of overlooked positive social value. Bitcoin has become a global, non-sovereign asset that anyone with internet access can own. It empowers the global populace with veto rights / exit mechanisms, transferring economic control from nations to individuals. Stablecoins provide better financial security for people worldwide, improving lives through faster fund transfers, higher yields, and lower transaction costs. Banks do not actually generate asset yields. Stablecoins are changing this reality.

………

Cryptocurrency offers a new financial system but also fuels speculation and degeneracy. It is building a new financial system where people can freely create whatever they want. Some will build casinos, some will develop new payment mechanisms. Some will set up crime platforms, some will develop ways to give more people access to credit. The new financial system will not be perfect, but it will be far superior to the current one. If you see crypto only as a casino, then perhaps you should step back and view it from a broader perspective—cryptocurrency has already and will continue to bring various benefits to society.

Crypto Trader _Painter:

Yeah, the reality is like that, you can tell the author’s “broken moral compass,” outright saying the crypto market has degenerated into a bunch of gamblers and casinos…

But interestingly, I heard the same comments in 2018 and also in 2022. If you understand how the crypto market works, you’ll realize that when liquidity floods in from outside, it inevitably leads to a boom in gamblers and casinos…

And markets with gambling characteristics will naturally drain the remaining liquidity…

Thus, the entire crypto market forms a cycle of “value investing” — “faith investing” — “emotional speculation” — “complete disappointment”…

Looking back to early 2023, when the market was full of voices praising BTC and value investing, now it’s so bleak and quiet.

But the crypto market has always moved through cycles of “believe” — “doubt” — “deny,” and we don’t need to believe that a specific chain will ultimately succeed; we just need to believe that the narrative of decentralized networks can endure forever.

In the future, new liquidity will enter, and then there will be prosperity and chaos. As long as the scope of this narrative continues to expand, the long-term direction of the market will ultimately be upward.

2025~2026 will be a phase of doubt; there may be phases of disappointment later, but human nature remains unchanged. Whether in investment or speculation, both have their eternal survival values.

Casinos and gamblers are merely small gaps that deflate bubbles; markets have their own mechanisms for adjustment. So, in turn, we should thank those trash casinos and bad projects.

Their existence indicates that there are parts of the market that require self-regulation. Without bubbles, there wouldn’t be phenomena of profiting from bubbles.

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

Qai Network Co-founder alan:

You are absolutely right. Cryptocurrency has gradually become a tool; it no longer aims to promote financial sovereignty or expand the market pie but is now extracting profits. The line between building a beneficial financial system for humanity and turning it into a gambling tool is blurred. Every project and founder must make a choice: are they genuinely trying to make the world better, or just want to participate in this game? … It’s easy to become numb, but I suggest you look deeper to find projects that still promote cyberpunk spirit. That’s the truly exciting place. That’s where real positive-sum game can happen. Interestingly, I believe the next development direction of cryptocurrency will resemble Bitcoin more—narratives around privacy (like Zcash, Monero), established cryptocurrencies (like Dash, Decred), and Proof of Work (PoW) projects will make a comeback.