Crypto Eats Itself, Not Web2

"But why does this need crypto?" I asked.

"That's actually a good point. I'm struggling to grapple with that myself. I don't know if it's like an emotional attachment too, because we — as a protocol, as a team — have been building crypto-specific products for years."

This conversation with a founder/team member from a prominent crypto social project stuck with me. It captures the quiet doubt creeping into the space. As of January 29, 2026, the cracks have become chasms:

• Rodeo, the social NFT collecting platform that aimed to make onchain collecting expressive and creator-rewarding, announced its shutdown. It will go read-only soon and fully close by March 10 after failing to scale sustainably amid collapsing NFT volumes and user growth.
• Lens Protocol is being handed over/stewarded by Mask Network, with the new stewards explicitly aiming to build "products people actually use" rather than more protocols.
• Farcaster was acquired by Neynar. The protocol continues operating, but the original team has stepped back, the app and tools are under new ownership, and there are plans to repay significant VC capital amid shifting direction.

Crypto social usage is at historic lows. Engagement, active users, and developer momentum have evaporated outside narrow niches. This isn't limited to social — most non-DeFi, non-prediction-market, non-trading crypto experiments (games, consumer apps, "Web3 experiences") are struggling or dead. Meanwhile, core DeFi, RWAs, and trading infrastructure continue evolving.

The Broken Promise

Crypto's original promise was transformative: take existing apps, games, and experiences and finally make them secure, trustless, user-owned, and censorship-resistant. No more platform lock-in. Real digital property. Verifiable interactions. Why, then, is everyone shying away from the "crypto" version of social?

Blind Scientists Disease

History is full of brilliant minds — crazy-haired intellectuals in basements and labs — building endlessly without pausing to ask: Will this be useful? Necessary? How do I make it intuitive for normal people? Most importantly: Does anyone actually want this?

We call it the Blind Scientists Disease in crypto circles. Even the brightest minds fall victim. They obsess over decentralized identity, token-gated feeds, onchain reputation, or composable social graphs, but forget the fundamentals of product-market fit.

Users don't wake up wanting a wallet, gas fees, seed phrases, or the ability to "own their follows" as ERC-721s. They want friends, discovery, expression, connection, and entertainment. Crypto often adds friction (UX nightmares, volatility, scams) without delivering proportional value for everyday social use cases. Social thrives on speed, virality, simplicity, and network effects — not on proving ownership of every post.

Sunk Cost Fallacy

Teams and builders have poured years into crypto-native stacks. Pivoting away — or even questioning the necessity of tokens, blockchains, and wallets — feels like betrayal. "We've been in these cycles so long." Emotional attachment + career capital + community expectations lock them in. Admitting that a social product might work better (or at all) without forced crypto elements is psychologically and reputationally costly.

Crypto VCs: Especially Problematic

Most VCs have flaws, but crypto VCs often amplify them. The vigor with which they fund and hype token-heavy, protocol-first projects — pushing incentives like airdrops, governance tokens, and "decentralization theater" — creates misaligned products. Teams chase token launches and hype cycles instead of user retention or organic growth. When usage inevitably falters, the response is more incentives, more layers, more complexity. It's a vicious cycle that prioritizes fundraising and speculation over solving real problems.

The Solution: Delete the Fat

Stop asking: "How can I add crypto to this project?"

Start asking: "Does this project need crypto at all? If yes, what is the most minimal way to incorporate it while delivering 10x better user value?"

Crypto shines in specific areas: verifiable ownership, censorship resistance, permissionless value transfer, immutable records, or trust-minimized coordination (e.g., DeFi settlements, prediction markets, certain financial primitives). For social? Rarely.

Great social products solve discovery, personalization, moderation, virality, and emotional connection first. Layer crypto only where it genuinely enhances trust, ownership, or incentives without killing usability.

Build the best possible social (or consumer) experience in Web2-friendly ways if needed — simple logins, seamless UX, mobile-first. Then, if ownership of data/content, monetization, or interoperability truly requires it, add blockchain elements sparingly (e.g., optional onchain publishing, portable identities, or minimal token mechanics).

At Onairos, we're focused on unifying user data into a controllable digital persona ("Own Your Mind"). Apps get better personalization (dating, social, productivity, entertainment) with explicit permission — not forced wallets, tokens, or onchain everything. Privacy-first data control delivers real value without the crypto overhead that repels mainstream users. Crypto can play a role for verifiable aspects of identity/ownership where it makes sense, but it's never the starting point or the default.

There Is No "Crypto Social." Just Social.

The label itself is the problem. Forcing "crypto" into social creates a niche ghetto rather than mass adoption. Users don't care about the tech stack — they care about the experience. The winners will be the products that feel like the best social apps (intuitive, fun, connective) while quietly using whatever tools (including minimal crypto) deliver superior security, ownership, or economics.

Crypto isn't eating Web2. In non-financial domains like social, it's eating itself through over-engineering, misaligned incentives, and refusal to prioritize users over ideology or sunk costs.

The path forward is humility: build what people actually want, delete unnecessary complexity, and use crypto surgically — not as a hammer for every nail.

Let's stop building for crypto natives and start building products that onboard the next billion users. The internet is personal, controllable, and valuable when it works for people — not when it lectures them about decentralization.