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 the crypto industry 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 The electric chaos and idealism of 2021 have been replaced by a dull, collective silence with nothing new to say.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:

1. Cryptocurrency fundamentally isn’t as interesting as we hoped
2. Blockchain is just a ledger of assets
3. 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 drift 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 further.

Institutions aren’t building on crypto innovation or permissionless spirit. They’re building “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. For 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 need permissioned APIs 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’s not a crypto product. It’s just an IT upgrade.

The “Western Union Syndrome”

The most severe “fintech wrapper” syndrome is caused by 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 a crypto product. It’s Western Union with private keys.

The fatal flaw of these wrappers is that they can’t store value on-chain. Value flows through the system but never settles into the ecosystem. Economic value is captured off-chain by the startup’s 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, and 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.

But 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: From “Practicality” to “Utility”

We can’t ignore the elephant in the room: AI. Artificial intelligence has sucked all 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 reshaping their narratives. The story shifts from “decentralized world” to “reducing settlement time by 0.5 seconds.”

But history has interesting rhythms.

We are currently at the digital equivalent of 2002.

It has already collapsed. Media proclaimed the internet was only useful for email and buying books. The “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 cloud, social media, and mobile internet. The “boring” years from 2002–2005 were the incubation period for 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-mainstreamers 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.

The Anti-Mainstream Bet: Beyond Ledgers

Kyle Samani believes blockchain is just an asset ledger. It’s a consensus view that crypto will only make Wall Street more efficient. But in investing, consensus rarely leads to alpha.

The anti-mainstream bet is that we’ve only scratched 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 visionary pioneers are leaving.

Good.

Let them go. Let 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’ll be those doubling down on core blockchain properties—permissionless, composable, trustless—to solve legacy system problems that can’t be fixed otherwise.

“This is the best of times, this is the worst of times.” We’re not ending. We’re 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.