The Great Repricing

The current state of the crypto industry is a paradox: as an industry we are succeeding beyond our wildest imaginations, yet the prevailing mood is the most downtrodden we have seen in a long time. Jonah and Spencer break down The Great Repricing that is currently underway.

The Industry Was Right

The industry was right about onchain payments and remittances. Stablecoin volume hit a record $33 trillion in 2025, up 72% year-over-year. Retail transactions surged from 314 million to 3.2 billion in 2025 alone.

The industry was right that crypto-native apps would reach massive scale. Polymarket became a wildly popular tool for forecasting global events. Phantom became the wallet millions reach for every day — 15 million MAU and growing.

The industry was right that DeFi would work. If Aave were a bank, it would rank amongst the largest on Earth if measured by deposit base.

The industry was right that nearly every major fintech and bank would execute an onchain strategy‍. Stripe, BlackRock, SoFi, Goldman Sachs, Citi, JPMorgan Chase, Visa, PayPal, Revolut, Nubank. They're all here.

It's seemingly never been clearer we're building the right technology, yet the mood is anything but celebratory.

The Disconnect

Given the success, why isn’t everyone ecstatic? The easy answer is price: it feels like tokens have traded down-only for months.

But crypto markets have experienced plenty of major pullbacks since inception, so why does sentiment feel worse this time? Some point to metals and equities hitting new highs while tokens slide. But we think that’s merely an exacerbating factor; it’s salt in the wound rather than the wound itself.

The real reason may be that the market is forcing industry contributors to digest a new, harsher reality: the divergence between traction and token prices may not self-correct. The game has changed and new data potentially invalidates long-held theses.

This is different from prior, cyclically-driven drawdowns and reflects more of a structural repricing as to where value is most likely to accrue.

In past downturns, teams could look inward to focus on product development and feel confident that their ability to ship a widely used network or protocol would translate into token appreciation. But now it seems that confidence no longer holds. The protocols have shipped, adoption scaled, yet token prices have not followed.

For builders and investors whose conviction is expressed through token exposures, the net result is that they got the thesis right but the asset exposure wrong.

Where the Thesis Broke

A simplified token thesis largely rests on three beliefs:

1. People will build something that CREATES a lot of value
2. That thing will CAPTURE some meaningful portion of the value created
3. That captured value would FLOW to token holders

For years, the questions were simple: does it work and will it scale? Now that the big questions are answered (yes, it works; yes, at scale), the market has shifted focus to value capture. And here's what became clear: people were RIGHT about #1. Massively, undeniably right. But most value has NOT accrued to token holders.

Value Moved Up the Stack

Most people's crypto exposure is through tokens. And most tokens represent infrastructure: L1s, L2s, bridges, oracles, middleware, protocols, DEXs, vaults, etc.

But the entities capturing the most value today look very different: Phantom, Polymarket, Tether, Coinbase, Kraken, Circle, Yellow Card. These are companies without a token (yet).

The reason is simple: the most valuable asset in crypto is the user relationship.

If you control the user interface and the flow of transactions, you control distribution. And, if you control distribution, you can monetize nearly any onchain product your users touch (swaps, lending, staking, mints, etc). We have written about this dynamic here and here.

Infrastructure, on the other hand, is increasingly interchangeable. When blockspace is abundant and switching costs are low, the only thing left to compete on is price. Bridges, L2s, DEXs, and even liquidity can be substituted. Pricing power erodes.

Ultimately, in this battle for economics between the infrastructure layers and the distribution layers, we believe the distribution layers are winning decidedly. Control of distribution creates routing power. Routing power commoditizes infrastructure. Commoditized infrastructure pushes economics toward marginal cost.

This Wasn't Obvious

This inversion of value capture is rattling the industry because it defies many long-held theses and architectural assumptions about how infra-layer networks and protocols might capture most of the value.

But this uncertainty isn’t a crypto-specific anomaly, it’s a consistent theme across tech cycles and history suggests that the most important questions about value capture and profit settlement are rarely answered early.

In early internet days, some assumed telecom companies would be the biggest winners because they owned the pipes through which every byte of data flowed. The bullish case, that telcos could charge in proportion to the value of transmitted data, wasn’t unreasonable. However, fierce competition drove data prices to marginal cost, commoditizing the telcos while the value flowed up the stack.

Not every technology cycle rewards the application layer though. For semiconductors and cloud computing, the infrastructure providers ultimately captured a lot of value. In those cases, it was scarcity, capital intensity, and switching costs that concentrated economic power at the base of the stack.

AI faces the same question right now: will base models capture the value, or will open source commoditize them and push value up the stack?

In crypto’s version of this, the hypothesis was that liquidity and network effects would create durable infrastructure winners and enable meaningful value capture. Today, apps and aggregators sit between the user and the underlying infrastructure,  routing volume rationally to wherever fees are lowest. The result is a structural decoupling: the "pipes" are fuller than ever, but  value capture has moved up the stack to where the user relationship resides.

What Comes Next

This is not a eulogy for tokens, nor is it the death of infrastructure investing.

Crypto has now moved through three distinct regimes: first speculation, then validation, and now we’re settling where the value capture will take place. The current discomfort comes from that final shift.

Infra and apps exist in a constant feedback loop: as apps reach new scales, they eventually hit bottlenecks that require next-generation infra to solve, and a new cycle of opportunity ensues. Moreover, there are awesome infrastructure products with real pricing power, but that power must be earned and demonstrated, not assumed.

Tokens will make a comeback too, but they will likely look different as they shift away from a governance-heavy emphasis and toward direct participation in app-layer economics or even becoming tokenized equity instruments with direct claims on cash flows.

Hyperliquid is one example of an onchain application with a real distribution strategy and economics unified around a single asset. And the broader evolution in this direction is already playing out: Morpho, Uniswap, and now Aave all seem headed down the path of unifying both protocol and application layer economics around their respective tokens.

For now, the state of play has shifted and the market is sending a clear signal: Utility alone is insufficient. Scale alone is insufficient. The market is demanding a direct and demonstrable link between usage, revenue, and asset value.

The industry was right about the technology. Now the market is deciding who gets paid. The builders who solve for value capture, not just value creation, will define the next era of the industry.