High founder-market fit in a bear market drives blockchain innovation

Author: Paul Veradittakit

Compiled by Deep潮 TechFlow

DeepChain Overview: While everyone is talking about AI absorbing $211 billion and crypto being left with only $20 billion, Pantera partner Paul Veradittakit sees the strongest cohort of founders in four market cycles during this bear market. These operators, who left Goldman Sachs, Citadel, and Stripe, are not here to chase narratives—they’re focused on the once-unsexy but now compelling hard problem of institutional-grade financial infrastructure.

Founder-market fit is the most enduring signal in venture capital. Products change, markets change, and regulations change—but the alignment between a specific founder and a specific market is the only constant, and it’s the only thing that continues to compound even when prices don’t rise.

We have never seen such a high founder-market fit in the blockchain space. The most interesting questions have converged on AI and fintech, and the most serious operators are now pouring in from Citadel, Stripe, Block, and Goldman Sachs, because the hard problem—institutional-grade financial infrastructure—has finally become the most compelling one.

We value four traits: deep domain expertise, high initiative, unfair network advantages, and obsession. Every category-defining project we bet on during the bear market—from Offchain Labs to Ondo—exhibits all four.

Founder-market fit is the only thing that continues to compound when prices aren’t rising. Products change, markets repricing, and regulations evolve. The specific pairing of a founder with a particular market is the constant—and bear markets are the best environment for discovering this fit.

If you're deciding what to do next, the market looks bleak. Bitcoin has halved from its October peak of $126,000, and market sentiment is fear. Most capital and nearly all attention have shifted to AI—last year, AI attracted approximately $211 billion, nearly half of all venture capital funding, while blockchain received only about $20 billion. Data from Electric Capital shows that blockchain code submissions have declined by approximately 75% since early 2025, and at the start of 2026, some of the industry’s most prominent figures announced their shift to AI.

But this image misses something. The vast majority of developers who left entered during the last bull market. Builders who have been here for two years or longer have just reached an all-time high and now write about 70% of the code. This is exactly what happened in 2022, when the core developer community continued to grow despite a 70% pullback. Bear markets don’t empty the room—they only remove those who came for the price.

So the question has never been whether the market will come back, but who will still be standing when it does. The answer in every cycle comes down to the fit between specific founders and specific markets—that’s founder-market fit, and it’s the most enduring signal.

The term "matching" comes from Andy Rachleff and Marc Andreessen. But blockchain has compressed this concept more thoroughly than any other market. The builders of this technology—the cypherpunks and early libertarians—were obsessed with markets even before markets existed. They had nothing else to own. Matching was everything.

Product-market fit asks whether the product has found its audience. Founders-market fit asks an earlier and more difficult question: Why is this specific person better suited than anyone else in the world to win this particular market?

This distinction is everything in a bear market. Everything else on the founder’s roadmap is temporary. In the blockchain space, the product you deliver three years from now won’t be the one you’re building today—the market will reprice, and regulations will shift beneath your feet. When founders have genuine market fit, none of this is fatal. They understand the underlying dynamics deeply enough to maintain an advantage through transformation. When they lack fit, they blindly pivot into spaces they don’t understand, and the bear market consumes them.

We made our best bets during a bear market, not a bull market, supporting founders before categories even existed—from the earliest Ethereum scaling infrastructure to today’s tokenization infrastructure. In this deeply reflexive market, alignment is our most enduring signal.

Here’s a part that should shift how you interpret brain drain. In previous cycles, talent was scattered across hundreds of speculative narratives, with most people chasing price movements. This time is different. The most interesting questions have converged into two verticals—AI and fintech—and the quality of founders choosing blockchain to solve these problems is the highest I’ve seen in four cycles.

The clearest evidence is who is showing up. The hard problem in blockchain has now become institutional-grade financial infrastructure—the very problem the best traders in traditional finance have spent their careers solving. Nathan Allman left Goldman Sachs’ digital assets division to found Ondo, now managing a product suite of approximately $2.6 billion that brings Treasuries and other assets on-chain. Ed Felten left his position as a Princeton professor and the White House to co-found Offchain Labs, building Arbitrum. Even within our own company, my partner Franklin Bi came from JPMorgan’s Onyx blockchain division. Today, founders walking into our meeting room come from Goldman Sachs, Citadel, Stripe, and Block—they’re not here to trade narratives. They’re here because the hard problem has finally become the interesting one.

Market data supports them. Tokenized real-world assets on public blockchains have surpassed $300 billion, growing over 400% since early 2025, alongside approximately $3 trillion in stablecoins. Goldman Sachs, JPMorgan, and BNY Mellon have all launched tokenized products. The GENIUS Act provided a federal framework for U.S. stablecoins last summer. BCG predicts that tokenized assets could reach $16 trillion by the 2030s. When the serious version of a problem arrives, serious founders follow. This is founder-market fit at scale—unprecedented in concentration compared to any previous bear market.

When I meet a founder in this kind of market, I’m looking for four things.

Deep domain expertise. You’ve lived in the market, not just read its map. In bear markets, buyers only show up for meaningful meetings, and technical depth always beats slick sales pitches. Before co-founding Offchain Labs and building Arbitrum, Ed Felten spent his entire career tackling the hardest problems in systems and security. We led the seed round. This depth is why the team could clearly see the scaling problem while most of the market was still debating whether it existed.

High levels of initiative. The ability to sell a vision by demonstrating your genuine understanding of specific market trends to skeptical, dense talent. Stani Kulechov did exactly that. With no financial background, he transformed ETHLend into Aave solely through conviction and insight, and went on to build the defining money market protocol in DeFi.

Unfair network advantages. When you have both context and connections that give you a faster start than others, vision becomes even more critical. A warm introduction goes further than any cold start, and in the categories being built today, this advantage compounds. Nathan Allman came out of Goldman Sachs’ digital assets world with the network and conviction that this was the right time to launch Ondo. I led our seed round in 2021, and today Ondo controls the majority share of the tokenized equities market.

Obsession. People leave when things get tough. The truly obsessed have been in the game for years, riding through cycles, starting long before any returns. Hal Finney, Nick Szabo, and Adam Back spent decades researching digital cash with no market and no money—purely on belief. This is a trait that won’t appear on a resume but matters more than anything else.

In a bear market, belief is the only fuel left.

In a bull market, momentum does the work for founders. Capital is cheap, hiring is easy, and every launch receives attention it doesn’t deserve. A bear market strips away all of that, leaving only belief as the force that drives founders forward.

Belief is not an emotion. It is the observable output of true founder-market fit. Founders who deeply understand their market continue building even when their token drops 50% and all the headlines shift to AI, because they can see the endpoint the market hasn’t yet priced in. Those without belief look at the same charts, lose courage, and walk away. That’s why bear markets are the best time to evaluate founders. Price does the filtering for us—the survivors are precisely the signals we’re trying to buy.

If you’re one of the traders at Goldman Sachs, Citadel, or Stripe wondering whether now is the right time, here’s my message: yes. A bear market is not a risk—it’s an proving ground, the cleanest environment for building compounding alignment. Blockchain doesn’t need more tourists. It needs more founders with true alignment to advance financial infrastructure—and there’s never been a better time to start than now, when everyone else is leaving.

To founders already in the arena: Stay focused and keep building. Founder-market fit is what compounds when the price isn’t rising, and the price will test that belief. Fit is what allows you to persevere.

Our commitment hasn’t changed. We launched the first Bitcoin fund in the U.S. in 2013 when the price was $65, and since then, we’ve made category-defining bets in every bear market—including the seed round of Arbitrum in the last bear market. We’ll continue doing the same in this one. If you’re building at the intersection of market and belief, that’s exactly where we want to get in early.