Web3 never sleeps.

Just two nights ago, as people in China sighed over the lackluster Double Eleven shopping festival, Bitcoin quietly soared past $89,000 USDT—an all-time high.

It’s been seven years since Web3 first made waves in China.

In human relationships, we call it the seven-year itch. For Web3 in China, it’s been a journey from total obscurity to cautious mainstream acceptance—and everything in between. Once shrouded in mystery, the industry now follows a familiar rhythm: boom and bust cycles, impassioned debate, and a whole lot of very human drama.

Today, there are more than 500 million crypto users globally. On-chain stablecoin assets exceed $173 billion. But even now, many still don’t fully grasp what Web3 has been—or what it’s becoming.

Seven years ago, JW, a fresh graduate from Tsinghua University's Schwarzman Scholars program, stumbled into Web3. While most of her classmates went to consulting firms, investment banks, or public sector jobs, JW took a different route.

She joined a crypto fund. Today, she’s the founder of Impa Ventures.

Like she puts it: Crypto was a surreal parallel world. A space of true believers, grifters, fortune-makers, and ruin-takers. And her journey—from knowing nothing about crypto to starting a fund in the heart of it all—has been a window into this wild frontier.

Where there are people, there’s drama—and in the Web3 space, which is so close to money, the drama is brutal.

In this essay, JW reflects on the last seven years in crypto. Not just to reminisce, but to ask: where are we now, and why are we still here?

Part 0: A Day in Crypto = A Year in Real Life

Most people date the origin of Bitcoin to November 11, 2008—Satoshi Nakamoto's now-legendary whitepaper. China’s crypto timeline began on June 9, 2011, with the founding of BTCChina by Yang Linke and Huang Xiaoyu. OKCoin and Huobi followed in 2013.

But back then, it was a tiny niche. You could count China’s crypto players on two hands.

It wasn’t until 2017 that Bitcoin became a household name. Its price rocketed from under $1,000 at the start of the year to nearly $19,000 by year’s end. ICOs exploded. Crypto broke into mainstream internet and VC circles.

Everyone talked about blockchain. Whitepapers flooded the air. Prominent personalities like Li Xiaolai, Xue Manzi, and Chen Weixing preached decentralization to adoring fans while shilling the tokens they backed.

In January 2018, a now-infamous WeChat message from investor Xu Xiaoping went viral: "The blockchain revolution is here."

Then came the now-mythic "3am Blockchain Group," founded by Yu Hong and friends. Within three days, it was packed with whales. Their collective net worth? Estimated in the trillions of RMB.

Crypto has this saying:

• If you’ve never heard of the 3am group, you're not in crypto.

• If you’re not in the 3am group, you're not a whale.

• If you haven’t been spammed by it, you don’t yet understand what "one day in crypto, one year in real life" means.

But that was just the warm-up.

Part 1: "This Guy’s Korea’s E-commerce Godfather"

Summer 2018, I flew to Seoul with my former boss — one of Asia’s top fund founders — to attend Korea Blockchain Week. Korea is one of the most important crypto markets, with the Korean won being the second-largest fiat trading currency after the US dollar. Crypto entrepreneurs and investors from around the globe all wanted a slice.

Our meeting was with Terra — the top Korean project. The venue was a Chinese restaurant inside the Shilla Hotel, a traditional, somewhat conservative Korean hotel that doubles as the government’s guesthouse. The lobby was packed with crypto-crazed young people from all over the world.

Terra was founded by Dan Shin and Do Kwon. Dan’s company, Tmon, used to be one of Korea’s biggest e-commerce platforms, with over $3.5 billion in annual GMV. Do, roughly my age, had graduated from Stanford and tried his hand at several startups.

“This guy is the Godfather of Korean e-commerce,” my boss said on the way to lunch.

Just like traditional investing, people are betting on the people in Web3. Someone like Dan, who had proven success in Web2, instantly drew interest from top crypto exchanges and funds.

We ended up investing $2 million in Terra.

Maybe because Do and I are peers, we stayed in touch. He was just a typical guy with an American accent, t-shirt, and shorts — like many computer science grads.

Do told me about plans to make Terra’s stablecoin a widely used digital currency, negotiating with Korea’s largest convenience store chain, the Mongolian government, and Southeast Asian retailers. They were also building Chai — a payment app they hoped would become the “Alipay of the world.”

In their warehouse-like office, as Do sipped coffee outlining his grand plans, I felt like I was dreaming. At the time, I didn’t fully understand how they’d pull it off — it just sounded so fresh and ambitious.

Back then, crypto wasn’t anywhere near consensus (and frankly, it still isn’t). Most of my classmates were either in finance, consulting, or big tech — skeptical or clueless about crypto. Meanwhile, I was chatting with a guy planning a global payment network.

It was the age of chasing narratives, big funds, and “professor coins.”

“Track this link for me and tell me how much has been deposited by the deadline this week,” my boss sent me a URL. It was a Dutch auction for a Layer 2 public sale. We never met the team — just a website and whitepaper — yet they raised $26 million in 2018. The token is now worth almost nothing.

People would rather trust a stranger halfway around the world on the internet than someone sitting in the same room.

I was barely 24 and I suspect most on the investment committee didn’t really know what they were doing — just like me. But they encouraged me to put another $500,000 into this project, “just as a friend.”

They were trying to replicate 2017’s madness: with a famous fund backing, any code name could pump 100x.

But the music soon stopped.

Part 2: “When will Bitcoin ever get back to $10,000?”

I once thought this was the best job in the world: young and traveling all over the globe; buying expensive business class tickets and staying in fancy hotels; wandering through glamorous conference venues; learning new things, making diverse friends.

But then the bear market hit, suddenly and hard.

In December 2018, Bitcoin’s price crashed from over $14,000 to $3,400. As a young professional with little savings, I watched Ethereum’s price fall from $800 to $400, then to $200—and decided to put a month’s salary in.

Looking back, it wasn’t the smartest move. Less than a month after buying in at $200, ETH fell below $100.

“That’s a scam,” I thought for the first time.

In the first half of 2020, the global pandemic hit hard, and the crypto market crashed again on March 12. I was stuck in Singapore. I remember opening price trackers repeatedly—Bitcoin was dropping $1,000 each time. A month earlier it was around $10,000; within hours it plummeted from $6,000 to $3,000—lower than when I’d first entered the space.

To me, it felt almost like a circus. I watched people’s reactions: some stood on the sidelines, some tried bottom fishing, some got liquidated.

Even seasoned investors were pessimistic. “Bitcoin will never hit $10,000 again,” they said. Some even doubted if crypto would survive, thinking it might just be a detour in tech history.

But some stayed.

My firm made no new investments then, but I kept evaluating projects.

Soon, decentralized finance (DeFi) began to buzz.

I’m not a trader myself, but my trader colleagues were skeptical: everything was slow, order book exchanges were impossible, liquidity was scarce, users few.

What I didn’t fully grasp was that DeFi’s biggest selling points were security and permissionlessness — but did permissionlessness really move the needle? After all, centralized exchanges’ KYC processes weren’t that bad.

Attending DevCon IV and V during the bear market was eye-opening.

Although I studied computer science and was no stranger to hackathons, I’d never seen so many “odd” developers in one place. Even with ETH down 90%, people passionately debated decentralization, privacy, and on-chain governance. I didn’t have faith in decentralization nor enthusiasm for anarchism — those were just classroom topics for me.

But the devs truly embraced those philosophies.

“You joined at a bad time,” a colleague comforted me. The previous year, at DevCon III in Cancun, our fund had made tens of millions just by investing in projects showcased there.

During the bear, we also missed investing in Solana when it was valued under $100 million (today it’s over $84 billion). We had interviewed founder Anatoly and Multicoin’s Kyle, who trusted the project as an “Ethereum killer.”

Solana’s TPS was 1000x Ethereum’s thanks to a consensus called Proof-of-History. But after a technical due diligence call, my colleague concluded: “Solana is too centralized. Centralized TPS is pointless — why not just use AWS?” They disliked it, and thought Anatoly, having worked at Qualcomm, didn’t fully grasp the value of a truly decentralized network like Ethereum.

(DeFi TVL growth chart — every VC’s dream chart)(Source: DeFi Llama)

With the rise of yield farming, my doubts about DeFi faded quickly. By staking tokens into DeFi smart contracts, users could become liquidity providers and earn fees plus governance tokens. Whether you call it a growth flywheel or a death spiral, DeFi protocols exploded in users and Total Value Locked (TVL).

Specifically, TVL went from under $100 million in early 2020 to over $100 billion by mid-2021. Thanks to open-source tech, cloning or tweaking a DeFi protocol took just hours. Since liquidity provision was called “yield farming,” many protocols adopted food-themed names.

For a while, new “food tokens” appeared daily — from Sushi to Yam. Crypto folks loved the wordplay — even a protocol with millions of trades could be named after food, complete with emoji logos.

But hacks and exploits made me nervous. I’m not a risk-taker. My friends, however, were farming hard — setting alarms at 3 a.m. just to be the first into new liquidity pools.

In summer 2020, APY (annual percentage yield) was the hottest topic — everyone chasing the highest returns.

Noticing this, veteran Andre Cronje launched Yearn, a yield aggregator that created a huge buzz.

As more money poured into DeFi, Twitter birthed some “gods” — like SBF from FTX, Do Kwon from Terra, and Su and Kyle from Three Arrows Capital.

Terra launched multiple DeFi products, including Alice (a US-focused payment app) and Anchor (a lending protocol). Anchor was designed for newbies like me — just deposit stablecoins and earn close to 20% APY, with zero hassle.

At its peak, Anchor’s TVL topped $17 billion.

“Congrats Anchor, great product, I invested some money too,” I messaged Do on WeChat, unsure if he’d reply.

He did — but I sensed he wasn’t the same young guy I knew. He had a million Twitter followers and announced plans to buy $10 billion in Bitcoin.

“Thanks — you’re doing well in your portfolio too,” he replied, referring to my early gaming investments. DeFi was changing crypto’s game space — everything now was about “earning.”

As the frenzy continued, I invested in a Three Arrows Capital lending project.

Months later, doubts arose over Anchor’s profitability. Terra’s lending products weren’t generating enough yield to cover interest paid to liquidity providers like me; subsidies from the Terra Foundation masked the shortfall. Seeing this, I withdrew funds immediately and also redeemed my investment from Three Arrows.

Crypto’s Twitter vibe grew strange. When Do tweeted “Enjoy being poor” and Su was seen shopping lavishly in Singapore, it felt like a market top signal.

I dodged the Terra and Three Arrows collapse — but I wasn’t so lucky with FTX.

Rumors swirled for weeks that FTX suffered huge losses in Three Arrows and Terra’s meltdown, possibly insolvent. Billions were being withdrawn daily. We cautiously pulled some but not all funds from FTX.

It was turbulent. Panic rumors of USDT and USDC de-pegging flew, Binance bankruptcy whispers circulated. Yet we held hope; I trusted SBF — a billionaire sleep-deprived in the trading pit, surely he couldn’t do wrong?

One day, on my way to the gym, my partner called: FTX filed for bankruptcy, $8 billion missing. Due to user asset mismanagement, we might never get our money back.

Surprisingly, I felt calm. Maybe this is our industry: magic Internet money. All assets are just digits on a screen.

Money tests character, and crypto accelerates everything.

Even now, I don’t doubt Do and SBF’s original intentions were good. Maybe they got drunk on unrealistic growth or thought they could “fake it till they make it.”

DeFi was like Prometheus’ fire for crypto: full of hope, but with a heavy price.

Part 3: The Misunderstood Crypto World

As the old Chinese saying goes, “Illness strikes like a mountain falling, recovery is like pulling silk.” The crypto industry took several years to recover from its crashes.

From an outsider’s perspective, it often seems like just another Ponzi scheme. People associate crypto founders with flashy clothes, a love for internet memes, wild global parties, and extreme get-rich-quick antics.

At a recent alumni reunion, I caught up with old classmates. When I mentioned I invested in crypto, they joked, “So you’ve become a crypto bro now.” I didn’t take offense, but it’s a strange label—almost as if crypto is separate from tech and VC, and for a well-educated young person, joining crypto might seem like a detour.

For a long time, the terms “Web3” and “Web2” have been used in opposition. But this kind of divide doesn’t really exist in other industries. No one tries to separate AI founders from SaaS founders, for example.

So what really makes Web3 unique in the VC context?

My personal view is that crypto fundamentally changed how venture and early-stage investing works, meaning crypto startups face slightly different success criteria than equity-based startups. In short, token economics create unparalleled opportunities for startups and VCs alike. At its core, it’s still about product-market fit (PMF), user growth, and value creation—just like Web2.

And as crypto matures, the lines between Web2 and Web3 companies are blurring more and more.

It’s time to rethink this industry.

In crypto’s early days (and we’re still early), people craved grand visions—a digital currency independent of central banks, a new computing paradigm (general smart contracts), a hopeful story (like replacing AWS with decentralized storage), or sometimes just a Ponzi scheme to get ahead.

Now crypto users know what they want, and they back it by paying or moving capital.

For outsiders, it can be hard to grasp how “magic internet money” actually generates revenue; some crypto assets even offer more attractive P/E ratios than stocks. I’ll try to illustrate with data—

• $2.216 billion — Ethereum’s protocol revenue over the past year;

• $1.3 billion net operating profit in Q2 2024 for Tether, the stablecoin issuer, which holds $97.5 billion in US Treasury securities;

• $78.99 million — revenue generated by meme token platform Pump from March to August 1, 2024.

Even inside crypto, memes are controversial: some see them as a new cultural wave and a tradable consensus—like Elon Musk planning to use Dogecoin on his Mars colony; others view memes as a toxic plague since they often lack real products or user value.

But just by participation numbers and money size alone, memes have become an undeniable social experiment—tens of millions of users worldwide and hundreds of billions in real money. Maybe there’s no tangible meaning, but by the same logic, what about postmodern art?

For many, crypto still conjures images of storytelling, hype, and trading. This was somewhat true in the 2017 ICO bull run, but after several cycles, the industry’s game has changed significantly.

Five years in, DeFi protocols’ revenue generation proved product-market fit. Comparing trading multiples, these projects’ valuations increasingly resemble traditional equities.

Aside from liquidity differences, the main perceived divide between Web2 and Web3 lies in their connection to the real world.

Compared to AI, social apps, SaaS, and other internet products, Web3’s offerings still feel somewhat distant from everyday life. But in some countries, like Southeast Asia, major super apps like Grab (offering rides, food delivery, and financial services) already support crypto payments. In Indonesia—the world’s fourth most populous country—crypto traders outnumber stock traders. In places with heavy currency devaluation like Argentina and Turkey, crypto has become a new asset reserve option. Argentina’s crypto trading volume surpassed $85.4 billion in 2023.

While we haven’t yet fully realized an “ownership internet,” we’ve witnessed crypto’s vibrant innovation on the current web.

For example, stablecoins like Tether (USDT) and Circle (USDC) quietly reshape global payment networks. Coinbase research shows stablecoins are the fastest-growing payment method. Stripe’s $1.1 billion acquisition of stablecoin infrastructure startup Bridge is also the largest crypto acquisition to date.

Blackbird, founded by Resy’s co-founder, aims to revolutionize dining by letting customers pay with crypto, especially using its own token $FLY. It connects restaurants and diners through a crypto-driven app that doubles as a loyalty program.

Worldcoin, co-founded by Sam Altman, is a pioneering universal basic income movement relying on zero-knowledge proofs. Users scan their irises with a device called Orb, generating a unique identifier called “IrisHash” to fight fake accounts and bots in digital spaces. Worldcoin now has over 10 million participants worldwide.

Looking back to summer 2017, few could have predicted what seven years would mean for crypto—how many applications would grow on blockchains, or how hundreds of billions in assets would be locked in smart contracts.

Part 4: Viewing Crypto Through the AI Lens

I want to talk about crypto and AI—because many often compare the two.

Comparing crypto and AI is like apples and oranges. But from a crypto investor’s view on today’s AI investing, you might spot some similarities: both are full-stack technologies with infrastructure and application layers. But the confusion is similar: it’s unclear which layer will capture most value—infra or applications.

“ What if ByteDance does what you want to do?” — the nightmare of every startup. Internet history shows this fear is real—from Facebook cutting ties with Zynga and building its own games, to Twitter’s live streaming war with Meerkat—big players’ resource advantages can crush startups.

In crypto, protocol and app layers have different economic models. For public chains (ETH, Solana, etc.), the more users, the more gas fees, and thus the higher the token value. So top crypto projects mainly focus on ecosystem building and attracting developers. Only blockbuster apps boost base chain usage and token value. Early infrastructure projects even give millions to qualifying app developers.

Our observation: infrastructure and app layers both capture value, with capital alternating between them, but winners take all. For example, lots of capital into public chains drives performance improvements, spawning new app models and killing off weaker chains. Capital into new business models grows user bases, spawning dominant apps that demand better infrastructure, forcing chain upgrades.

What does this mean for investors? Simply put, betting on infrastructure or apps is fine—core is to find the winner.

Fast-forward to 2024—what chains survive? Three simple conclusions:

1. Disruptive tech matters less than you think. VC-favored “Ethereum killers” (Thunder Core, Oasis Labs, Algorand) mostly failed. Avalanche survived, but only after professors left and it fully embraced Ethereum compatibility. Polygon, dismissed for copying Ethereum, now ranks top 5 in chain assets and users.

2. Developer and user stickiness come from ecosystem. Besides end users, chains rely on developers (ignoring miners, which have a separate model). Developers prefer ecosystems with many users and good infra like wallets, explorers, DEXs. This creates a flywheel effect.

3. Network effects are stronger than imagined. Ethereum’s users and locked funds exceed all its “killers” combined. Ethereum is synonymous with smart contract chains—everyone thinks of it first, like OpenAI is with AGI. Plus, top chains hold huge cash reserves to invest or grant developers, a level startups can’t match. And because many projects are open source, mature ecosystems enable more modular dApps.

So what differs between chains and large AI models?

• Infrastructure demands: a16z stats show 80-90% of early AI startup funding goes to cloud. AI apps spend 20-40% of revenue per customer on fine-tuning. Most money goes to Nvidia and cloud providers. Blockchains rely on miners for hardware/cloud, and handle far less data compared to AI’s billions of labeled data points. So infra costs are much lower for chains.

• Liquidity, liquidity, liquidity. Chains can issue tokens pre-mainnet, but AI model startups without users or revenue struggle to IPO. So even underperforming “professor chains” rarely lose all investor money, but AI startups can easily die without funding or buyers. VCs should be more cautious here.

• Real productivity gains. ChatGPT found PMF and is massively used by B2B and consumers, boosting productivity. Chains had two bull-bear cycles but still lack killer apps; use cases are still evolving.

• End user perception. Chain users must know which chain to use, moving assets to form stickiness. AI is seamless, like cloud services or processors—users don’t care if their ride app runs on AWS or Alibaba Cloud. ChatGPT’s memory is short, and users don’t care if chatting on the main page or an aggregator, so user retention is harder.

Regarding crypto in AI, many teams offer insights; consensus is decentralized finance networks will become AI agents’ default financial networks. The chart below captures this stage well.

Part 5: Hunting Needles with Agility in the Haystack

When I first joined the crypto industry, I had almost no faith in the idea of decentralization. I think most people starting out felt the same. Everyone got involved for different reasons—some for the money, some for the tech, some out of curiosity, and some just by chance.

But if you ask me now whether I believe in crypto, my answer is a definite yes. You can’t dismiss an entire industry just because it’s had its share of scams—just like you wouldn’t write off traditional finance because of Madoff’s scandal.

A recent example from my own circle is a friend of mine, let’s call him R. He turned a simple idea into a company with 200 employees, positive cash flow, and a valuation north of $200 million.

R’s startup was born from his understanding of decentralization’s value. “My girlfriend is a minor influencer on TikTok, but influencers only get a tiny slice of what their fans tip them,” he told me. The biggest creator networks in the world aren’t fair, he said, “So I wanted to build a decentralized version.” At first, I thought he was joking. But about three years later, his platform went live and now has hundreds of thousands of users.

For someone like me who joined this space fresh out of college at 24, these past seven years have been a window into many sides of this world: idealists, gold diggers, winners, and those who lost everything.

Remember my old boss I mentioned at the start? A crypto OG who made a fortune once said to me, “You’ve got to hustle hard, or you’ll just end up a rich ordinary person.”

I like how a respected investor once described VC work as “looking for needles in a haystack.” For me, crypto VC is exactly that — hunting for needles in a haystack.

The only difference? In crypto, the haystack demands you to be agile.