Darkness Before Dawn: Crypto in 2026 = Internet in 2002
Author: DeFi Cheetah
Translation: PANews
Kyle Samani is leaving, shifting his focus to AI, longevity tech, and robotics. If you’re a founder, a developer, or a believer still committed to crypto today, you can feel it. The atmosphere has changed. The electric chaos and idealism of 2021 have been replaced by a dull, collective silence with nothing new to say.
Why is Kyle leaving? You can find the answer in his quickly deleted tweets:
- Cryptocurrency fundamentally isn’t as interesting as we hoped
- Blockchain is just a ledger of assets
- Most “interesting questions” have already been answered
For me, this isn’t just investor fatigue. It’s a surrender by blockchain and crypto. When high-conviction capital begins to flow toward the dazzling glow of AI, and crypto is downgraded to a boring backend of finance, it signals a profound shift.
But I’m writing this to tell you that this despair is deceptive.
We have reached the most dangerous yet most critical turning point in the industry. We are witnessing the “aristocratization” of crypto, and if we’re not careful, we will let the true revolution die in the hands of “fintech wrappers.”
The Rise of Fintech Wrappers
Headlines cheer as institutions finally enter the space. ETFs get approved, banks pilot subnets, asset managers tokenize government bonds. But look deeper.
Institutions aren’t building on crypto innovation or permissionless principles. They’re constructing “fintech wrappers”—products that merely leverage blockchain technology to improve settlement efficiency while retaining the same rent-seeking, middleman structures of legacy systems.
They’re not investing in innovative crypto architectures; they’re transplanting their isolated systems onto the blockchain. To them, blockchain is just a cheaper global SQL database. If their products can exist on private networks (most should), they’re not building crypto—they’re just upgrading their IT infrastructure.
When a bank launches a private blockchain or a “walled garden” stablecoin, they’re building a fintech wrapper. They’re using the technology solely to improve settlement speed, while maintaining legacy rent-seeking middlemen.
- They fragment liquidity.
- They require permissioned APIs for interaction.
- They rely on reconciliation between different private ledgers.
If a product can exist on a private SQL database with just a few API keys, it’s not a crypto product. It’s just an IT upgrade.
The “Western Union” Syndrome
The most severe “fintech wrapper” culprit is the endless stablecoin payment startups.
These projects tout themselves as revolutionary because they allow you to send dollars across borders in seconds. But look at their architecture. They merely see blockchain as a transportation track.
- User A deposits fiat currency.
- Protocol converts to stablecoin.
- Stablecoin moves from wallet X to wallet Y.
- User B off-ramps to fiat.
This isn’t crypto. It’s Western Union with private keys.
The fatal flaw of these wrappers is they can’t retain value on-chain. Value flows through the system but never settles into the ecosystem. Economic value is captured off-chain by startup equity holders, while the blockchain itself is treated as a commodified internet cable—simple, cheap, and invisible.
True crypto isn’t just “sending money.” It’s about synchronized logic execution. In legacy finance, systems are asynchronous, liquidity is fragmented across NYSE, NASDAQ, London, Tokyo. Moving funds from broker to bank to lending platform takes days (T+2 settlement). It involves three different ledgers, three trust assumptions, and friction at every step.
In DeFi, liquidity pools are a global resource accessible instantly by any app, bot, or user without permission from intermediaries. This isn’t “idealism” or “fundamentalism.” It’s capital efficiency.
2002 vs. 2026: The Shift from “Practicality”
Can’t ignore the elephant in the room: AI. Artificial intelligence has sucked the oxygen out of the room, delivering tangible, miraculous, productivity-boosting results that make crypto’s clunky UX and governance circus look outdated.
This has triggered a crisis of faith. Founders are pivoting. VCs are rebranding. The narrative shifts from “decentralized world” to “reducing settlement time by 0.5 seconds.”
But history has an interesting rhythm.
We are currently at the digital version of 2002.
It’s already collapsed. Media proclaimed the internet was only useful for email and buying books. “Interesting questions” were supposedly answered. After the dot-com bubble burst, the narrative was the same. The “information superhighway” was seen as a failure.
Why? Because early internet companies were just “newspaper wrappers”—they put physical newspapers on screens. They didn’t leverage the internet’s native properties (hyperlinks, social graphs, user-generated content).
But when visitors left and speculators went bankrupt, the builders who remained quietly laid fiber optic cables and wrote code for the cloud, social media, and mobile internet. The “boring” years from 2002–2005 were the incubation period of the world we live in today.
We are at the same moment now. “Fintech wrappers” are the “newspaper wrappers” of our era. They put old finance onto new rails.
The next cycle’s winners will be the anti-establishment rebels who stop trying to please institutions with private networks and start harnessing blockchain’s native physical properties:
- Global state rather than isolated databases.
- Atomic composability rather than API integration.
- Permissionless liquidity rather than walled gardens.
Anti-Establishment Bets: Beyond Ledgers
Kyle Samani believes blockchain is just an asset ledger. That’s the consensus view—that crypto will simply make Wall Street more efficient. But consensus rarely leads to alpha in investing.
The anti-establishment bet is that we are only scratching the surface of what trustless coordination can do.
We’re not here to build better databases for BlackRock. We’re here to build things that can’t exist on private servers.
Conclusion
This is the darkest hour for founders. The hype is gone. Easy money is gone. The pioneers of wisdom are leaving.
Good.
Let them go. Let the price chasers chase. Let institutions build their private ledgers and call it innovation.
This is the great filter. The crypto projects that will seize the biggest opportunities on blockchain won’t be those mimicking banks. They will be those doubling down on core blockchain properties—permissionless, composable, trustless—to solve problems legacy systems can’t.
“This is the best of times, it is the worst of times.” We are not ending. We are just beginning the end. The era of “fintech wrappers” is a distraction. The real work—the building of a sovereign internet—starts now.
Stay focused. Build the impossible.