People have always told stories to make sense of the world. Life is complicated, and we develop narratives to help explain it. And while the crypto sector is built around breakthrough innovations and farsighted vision, it is no less prone to narrative-building than any other sphere of human activity.
Trends appear and recede. Zero-knowledge proofs, staking and parallel execution have all trended at various points, only to be overtaken by the next hot thing.
It is natural for people to follow narratives in an attempt to "ride the wave." Founders of early-stage projects are no different, often trying to steer their vision toward ideas that can garner outsize attention and funding.
This is true in all areas of tech. Look no further than Facebook's rebranding as Meta in 2021 for proof that no one is too big or powerful to be pulled in by a compelling narrative.
Yet just as it's obvious that people chase narratives, it is also clear that the true winners -- the true visionaries -- are those who don't follow the herd.
This is easy to say, but, like calling the top of the market, it is quite difficult to follow in practice.
Peter Thiel famously said that every successful company must know a secret -- a truth that you understand but others don't recognize or believe in. And it was Keith Rabois who coined the term "narrative violation" to mean finding the opportunity that goes against the current trend, and betting on it.
Make trends; don't follow them
There's a saying: "If you can spot a trend, you've already missed it." So, how do the early movers get the jump on all the bandwagon-hoppers?
The answer is simple: Rather than try to divine what the next fad will be, they develop truly visionary ideas and commit to them. It's like they know a secret that others just don't recognize.
The history of blockchain's evolution is a story of many such "secret keepers." Bitcoin creator Satoshi Nakamoto's vision needs no explanation; the inventor of Bitcoin saw a future of sound, immutable, digital money before anyone else.
Later on, Ethereum co-founder Vitalik Buterin saw a need for programmable smart contracts, which became the basis of so many subsequent crypto crazes.
Recent: Indicted NYC mayor leaves questionable crypto legacy as controversy mounts
More recently, Solana came to market with a focus on a high-performance layer-1 blockchain at a time when most of the buzz was around layer-2 projects.
The teams behind Celestia, Avail and EigenDA were working on vertical scaling: only scaling data availability when horizontal scaling -- building rollups -- was popular.
The common thread among these innovators is that they saw possibilities and pursued them regardless of the hype.
X isn't real life
The tendency to chase trends and fads is reinforced by the fast-moving bubble of social media.
Most crypto and tech entrepreneurs are active on X -- it's "where the conversation happens."
But the social media platform's incentives reward short-term rhetorical point-scoring and groupthink. This amplifies a culture of following the current craze rather than envisioning the next breakthrough development.
Worse, X and similar ecosystems can lead to a situation where "life imitates art." Founders begin to develop projects in pursuit of the same short-term notoriety and clout-chasing cultivated by social media.
This can lead to a proliferation of highly touted, short-lived pump-and-dump projects whose objectives are to make money quickly rather than to deliver something truly new and useful to the market.
Speculation then builds on itself: Projects speculate on speculation, creating ever-accelerating feedback loops, which then cause the narrative to shift even more quickly. This results in a negative feedback loop: Even as the incentive to follow trends is reinforced, it becomes harder and harder to do so. This is bad for entrepreneurs and bad for innovation broadly.
Trust your vision
The good news is it's easy, on an individual or project level, to reject this paradigm. A founder should believe in a vision strongly enough to see it through, regardless of which hype cycle is ascendant at a given moment. With a good idea, strong execution and a little luck, that vision will be successful, and a new narrative will grow around it.
Magazine: Bitcoiners are 'all in' on Trump since Bitcoin '24, but it's getting risky
True vision is a rare thing, and most people are not visionaries most of the time. Much more common is the desire for short-term success and recognition.
It's not surprising that people would look to emulate existing success -- after all, this is a tried and true pathway in established professions such as law and medicine. But when it comes to technological innovation, emulation isn't enough.
Tech founders, developers and entrepreneurs need to have the courage of their convictions. Most of the time, that entails cutting against the prevailing narratives.
Stick to your vision and your expertise, believe in your "secret," and bring your product to market regardless of what's trending on social media. If your idea is good and serves a real need, you have every chance of success.
Shumo Chu is a co-founder of Nebra Labs. A former assistant professor at the University of California, Santa Barbara, he obtained his PhD from the University of Washington and was a research scientist at Algorand. His current research interests are in privacy-preserving systems.