Author:DeFi Cheetah
PANews
Kyle Samani is moving on, turning to the fields of AI, longevity technology, and robotics. If you are a founder, a developer, or a believer who still stands firm in the crypto industry today, you can feel it. The air has changed. The electrifying, chaotic idealism of 2021 has been replaced by something mundane and collectively silent.
Why did Kyle leave? You can find the answer from his quickly deleted tweets:
1. Cryptocurrencies "are fundamentally not as interesting as we would like.
2. Blockchain is merely an asset ledger
3. Most of the "interesting questions have already been answered"
For me, this is not just the fatigue of an investor. This is the surrender of blockchain and cryptocurrencies. When high-conviction capital begins drifting toward the dazzling light of AI, relegating cryptocurrencies to a boring back-office role in finance, it marks a profound shift.
But I am writing this article to tell you that this despair is deceptive.
We have reached the most dangerous, yet also the most critical turning point in the industry. We are witnessing the "aristocratization" of cryptocurrencies, and if we are not careful, we will let the real revolution die at the hands of "fintech wrappers."
The Rise of "Fintech Wrappers"
Top news cheers as institutions finally enter the field. ETFs are approved, banks are piloting subnets, and asset management companies are tokenizing government bonds. But look further ahead.
Institutions are not building based on the innovation and permissionless spirit of cryptocurrencies. They are building "fintech wrappers"—products that merely utilize blockchain technology to improve settlement efficiency while retaining the same rent-seeking, intermediary structures from legacy systems.
They are not investing in the innovative architecture of cryptocurrencies; they are transplanting their own isolated islands onto the blockchain. To them, the blockchain is just a cheaper global SQL database. If their products can exist on a private network (which most should), they are not building cryptocurrencies; they are simply upgrading their IT infrastructure.
When a bank launches a private blockchain or a "walled garden" stablecoin, they are building a fintech wrapper. They are merely using this technology to improve settlement efficiency, while retaining rent-seeking, intermediary structures from legacy systems.
They split the liquidity.
They need a permitted API to interact.
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 is not an encrypted product. It is merely an IT upgrade.
"Western Union" Syndrome
The worst culprits of the "fintech wrapper" syndrome are the endless stablecoin payment startups.
These projects brand themselves as revolutionary because they allow you to send dollars across borders in seconds. But look at their architecture. They only view the blockchain as a transportation track.
User A inputs fiat currency.
The agreement is converted into stablecoins.
Stablecoins are moved from wallet X to wallet Y.
User B off-chain converts to fiat currency.
This is not an encrypted product. This is a Western Union with a private key.
The fatal flaw of these wrappers is that they cannot retain value on-chain. Value flows through the system, but never settles into the ecosystem. Economic value is captured off-chain by equity holders of startups, while the blockchain itself is viewed as a commoditized internet cable—simple, cheap, and invisible.
Real crypto is not just "send money." It is about the synchronized execution of logic. In the legacy financial world, systems are asynchronous, and liquidity is fragmented between NYSE, NASDAQ, London, and Tokyo. If you want to transfer funds from a broker to a bank and then to a lending platform, it takes days (T+2 settlement). This involves three different ledgers, three different trust assumptions, and friction at each step.
But in DeFi, liquidity pools are a global resource, instantly accessible by any application, bot, or user, without needing to request permission from intermediaries. This is not "idealism" or "fundamentalism." This is capital efficiency.
2002 vs. 2026: The Shift Toward "Practicality"
The elephant in the room cannot be ignored: AI. Artificial intelligence has sucked the oxygen out of the room, delivering tangible, magical, productivity-enhancing results, making cryptocurrency's clunky UX and governance farces look outdated.
This has led to a crisis of faith. Founders are pivoting. VCs are rebranding. The narrative is shifting from "decentralized world" to "reducing settlement time by 0.5 seconds."
But history has an interesting rhythm.
We are currently standing at the digital version of 2002.
It has already collapsed. The media proclaimed the Internet was only useful for email and buying books. "Interesting questions" were said to have been 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 the screen. They didn't leverage the native attributes of the internet (hyperlinks, social graphs, user-generated content).
But as tourists left and speculators went bankrupt, the builders who remained were quietly laying fiber-optic cables and writing code for the cloud, social media, and mobile internet. The "boring" years of 2002–2005 were the gestation period for the world we are in today.
We are at the same moment. "Fintech wrappers" are the "newspaper wrappers" of our era. They put old finance on new tracks.
The winners of the next cycle will be the contrarians who stop trying to please institutions with private networks and start leveraging the native physical properties of blockchain:
Global state instead of island databases.
Atomic composability instead of API integration.
Permissionless liquidity over walled gardens.
Against the Mainstream Wager: Beyond the Ledger
Kyle Samani thinks blockchain is just an asset ledger. This is the consensus view that cryptocurrencies will simply make Wall Street more efficient. In investing, consensus views rarely are where alpha is.
Against the mainstream bet, we have not even scratched the surface of what trustless coordination can do.
We are not here to build a better database for BlackRock. We are here to build things that cannot exist on private servers.
Conclusion
This is the founder's darkest moment. The hype is gone. The "easy money" is gone. The smart pioneers are leaving.
Good.
Let them go. Let the price chasers chase. Let institutions build their private ledgers and call it innovation.
This is the big filter. The crypto projects that will capture the biggest opportunities of blockchain will not be the ones that imitate banks. They will be the ones that double down on the core properties of blockchain—permissionlessness, composability, and trustlessness—to solve problems legacy systems can't.
"This is the best of times, this is the worst of times." We are not ending. We are only the beginning of the ending. The era of the 'fintech wrapper' is a distraction. The real work—the work of building a sovereign internet—begins now.
Stay focused. Build the impossible.