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2 hours ago
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I’ve seen dozens of crypto projects fail. I’ve seen a handful of crypto companies succeed.
To succeed, many hard things must align. To fail, only one key thing needs to go wrong.
After nearly a decade in this space, one pattern repeats itself: the fastest path to failure is biasing toward idealism over pragmatism.
I joined the industry for its ideals. It took years - and a few hard lessons - to unlearn them.
This post is about projects trying to create value, not extract it. Those building new rails, not just running the same casino onchain.
Memes and casinos have their own kind of Product-Market-Fit. They entertain, they speculate, they move money. But they don’t build. They redistribute value rather than generate it.
In short, this post is about teams growing the pie, not just grabbing the bigger slice.
Now that the disclaimer’s out of the way, let’s get into it.
I first dipped my toes into crypto in 2016, back when Vitalik would reply to my tweets or answer my technical questions on Gitter. For the past four years, I’ve been all in, building full-time.
That transition, from observer to participant, is when you start facing real tradeoffs. It’s when you stop quoting whitepapers and start debugging production systems. And it’s when your ideals begin to meet reality.
Below are examples I often bring up when discussing how pragmatism (not purity) led to success. These are companies I’ve been learning from.
PolyMarket proved that stablecoins beat custom tokens for early traction in prediction markets. Back in 2016, Augur and Gnosis kicked off the decentralized prediction markets ecosystem. Most people today haven’t heard of Augur, and know Gnosis mainly as a multisig or credit card company. But, everyone’s heard of PolyMarket, especially after their $2B raise at a $9B valuation. Their key move was focusing on product over tokenomics, avoiding getting nerd sniped by shiny ideals.
Solana showed that choosing speed over decentralization can capture real users. Solana’s vision was to run at the speed of the Nasdaq onchain. One of crypto’s deepest ideals is that anyone should be able to run a node or validator at home, in their basement, on a laptop, as part of the network’s collective strength. In practice, running a Solana validator requires professional-grade hardware and DevOps skills. It’s like needing to be an F1 driver just to commute to work. Solana made the hard tradeoff of centralization for performance, and it paid off. With a ~$91B market cap, pragmatism clearly won.
Stablecoins became crypto’s paradoxical success by embracing regulation and existing rails. Bitcoin dreamed of divorcing from the existing financial system; stablecoins married it. Now they’re on track for $46T in annual volume, with Circle IPOing and the GENIUS Act adding clarity. They’re as anti-crypto-ideal as it gets, and yet, not showing any signs of slowing down.
Coinbase thrived by offering custody and compliance instead of maximalist purity. Crypto said: Not your keys, not your coins. Coinbase said: Most people don’t want to manage keys. They made the pragmatic choice to build for real users, not ideals, and onboarded millions because of it.
Privy is arguably one of the most successful wallets in crypto. Its mission is to bring people onchain, and I’ve heard dozens of founders say it’s the best thing that’s happened to the industry in years. Yet it doesn’t have a token, it isn’t “crypto-native,” and it relies heavily on AWS to store user keys [1]. Its CEO and co-founder, Henri Stern, spent four years as a protocol research engineer at FileCoin, a project that embodied true crypto ideals. That experience likely gave him a clear sense of when decentralization helps and when it only slows you down. Privy succeeded by focusing on the user experience over crypto ideals.
In crypto, pragmatism isn’t about compromise, it’s about sequencing. You can decentralize later. You can tokenize later. But you have to survive in the beginning.
Failure can hinge on one thing. Success demands a harmonic symphony: UI, UX, timing, execution, luck. All must play in tune.
Most people in the OG crypto space start with ideals. That’s good as it draws in smart, mission-driven people. But idealism alone doesn’t build resilient systems.
Pragmatism doesn’t guarantee success. Idealism often guarantees failure.
The only true exceptions? Bitcoin and Ethereum. [2]
Decentralization is a byproduct of a permissionless and incentivized system. It’s an end to a means, not a means to an end.
A fully privacy-preserving, decentralized, permissionless world sounds perfect in theory. In practice, it stalls progress, innovation, and usability.
In crypto, as in life, survival belongs to the pragmatists.
Don’t tokenize too early. Start with stablecoins or fiat rails.
Don’t decentralize too early. Use centralized infra, design for later decentralization.
Find Product-Market Fit first. Once you have PMF, you can afford ideals and earn the right to strive towards them.
[1] Ironically, the world’s most private messenger (Signal) runs mostly on AWS. It works because users value reliability over purity.
[2] I’d argue that Zcash is a third exception, but one that’s not known as well (yet). I remember listening to the podcast episode on The Ceremony: Birth of Zcash back in 2017 and being blown away by the amount of work that went into it.
