Podcast Summary: "Is the Crypto-Native Era Coming to an End? - Lessons from 10 Years in Crypto with Joey Krug, Founders Fund Partner"

Bankless | December 22, 2025
Host(s): David, Ryan
Guest: Joey Krug (Partner, Founders Fund)

Overview:

In this episode, Bankless welcomes Joey Krug, OG crypto builder and Partner at Founders Fund, to reflect on a decade in crypto. The discussion explores whether the formative "crypto-native" era is over as mainstream institutions and “SuitCoiners” take center stage, and what the future holds for DeFi, prediction markets, value accrual, regulation, and investment in the space. Joey shares candid lessons from building Augur and investing in Polymarket, his thoughts on cycles, regulation, and the nuanced realities of mainstream adoption.

Key Discussion Points & Insights

1. The Evolution from Cypherpunk to SuitCoiner Era

• Crypto’s Shift to Institutionalization
  • Early Web3 was idealistic, cypherpunk, and radical; now, it’s more institutional, with Wall Street and “SuitCoiners” dominating (“It’s all suit coiners now.” – David, 06:25).
  • Joey thinks this shift is ultimately positive:

    “There’s more suits in the room now, but they're doing stuff that's more real than people were talking about six or seven years ago.” (Joey, 07:22)

• Reflection on the Loss and Legacy of Crypto-Native Culture
  • David reads a quote from Dougie DeLuca, summarizing the “crypto-native era is dead” and asks if the industry will fade into just being backend infrastructure.
  • Joey: Debates and values from the cypherpunk age did lay groundwork (e.g., smart contracts, DeFi primitives). Some battles mattered (“the part that did matter, mattered a lot”), but most users now just use the tech without knowing it’s crypto (13:20–16:37).

2. The Unseen Success of Crypto Infrastructure

• Crypto as Invisible Backend:

  “Most people don’t even know it’s a crypto product... It just happens to be the best payment rail.” (Joey, 13:57 / 15:00)

• Comparison to Linux: Like Linux in web services, crypto will increasingly form the invisible rails of finance.

3. Prediction Markets: From Augur to Polymarket’s Breakout

• Augur’s Cypherpunk Design vs. Polymarket’s Pragmatism
  • Augur was designed for maximal decentralization and censorship-resistance (i.e., could "survive a nuclear war,” Joey, 18:00), but that made it cumbersome.
  • Polymarket succeeded by leaning into practicality: centralized frontends, USDC, regulatory risk, and timing.
• Mass Adoption & Regulation
  • Polymarket’s trajectory from a contrarian $45M Series B (early 2024) to mainstream fit validates the “invisible crypto” thesis (41:04–43:58).
  • FBI raid anecdote (2024) shows ongoing regulatory risks and the unpredictable political climate (44:38–46:48).
• Market Potential
  • Joey believes prediction markets (sports, election, geopolitical, economic) could reach the scale of major exchanges (CME, NYSE):

    “They could be comparable to things like the CME or New York Stock Exchange.” (Joey, 24:28)

• Are Prediction Markets Just Gambling?
  • Joey distinguishes between gambling and edge:

    “If you have edge, it’s not gambling. If you don’t, it is.” (25:44)

• Regulation Nuances: Insider Trading, Fairness, State vs. Federal
  • Complex ethical and legal questions around insider trading (29:08–34:30).
  • State vs. federal regulatory battles expected to continue, with incumbents like sportsbooks funding anti-prediction-market advertising (39:08–41:00).

4. Founders Fund Crypto Investment Thesis

• Heavy focus on founders and “unusual” founder-market fit, not just ideas or sectors (“The best founders are extremely good at some things and extremely bad at others.” – Joey, 49:25).
• Recent investments: Polymarket, Lighter (high-throughput L2), digital asset treasuries.
• Tom Lee’s Ethereum DAT highlighted as a “team-specific bet”—emphasizes relationships and conviction over passive indexing (50:29–51:53).

5. Crypto Asset Valuation & Digital Asset Treasuries

• How to Value Layer 1 Assets (BTC, ETH):
  • Bitcoin: Holds a unique “digital gold” position; narrative-driven.

    “I think it’s like gold... People allocate small percentages of their net worth because others will.” (58:27)

  • Ethereum: Its premium relies on credible fee/burn revenue; in a world of expanding blockspace/supply, the narrative and monetary premium are under threat (58:08–62:15).

    “If the revenue kind of rounds down to zero, then people have this attitude that there’s no floor...” (Joey, 59:30)

  • Joey would “bet on” ETH if it finds sustainable revenue; skeptical of the pure monetary premium path.

6. Market Cycles, Shifting Attention, and Frontier Investing

• Cryptocurrency Cycles:
  • Four-year cycles may be ending due to ETFs and institutionalization; but 2026 could still see a bear due to attention shift and correlation with public offerings in AI, space (74:27–75:02).
• Attention Scarcity:
  • AI, robotics, energy, and other techno frontiers are drawing capital and mindshare, diluting crypto’s former “center stage” status.
• Investment Focus:
  • Joey now spends about 2/3 on crypto, 1/3 on other frontiers (biotech, AI).
• Predictions:
  • The next decade is about further integrating crypto’s foundational technology into the mainstream and legacy systems, improving access and distribution (81:09–83:06).

7. AI & Crypto: Competition or Counterbalance?

• Centralization vs. Decentralization:
  • Peter Thiel’s dichotomy: AI centralizes, crypto decentralizes—Joey agrees in practice.
• Interplay Remains Unclear:
  • Real-world crypto use for distributed GPU/compute is still early, but permissionless payments provide resistance to “1984 style” dystopias.
• Current AI x Crypto Examples:
  • Crypto integration with AI for payments, portfolio rebalances, agent automation is useful but not revolutionary yet (68:12–70:10).

Notable Quotes & Memorable Moments

• On "SuitCoiners" and Institutionalization:

  “There’s more suits in the room now, but they're doing stuff that's more real than people were talking about six or seven years ago.” (Joey, 07:22)

• Crypto as Infrastructure:

  “Most people don’t even know it’s a crypto product... It just happens to be the best payment rail.” (Joey, 13:57 / 15:00)

• On the End of the ‘Crypto-Native’ Era:

  “The mission was never to make everyone crypto native. The mission was to make the world with the tools we built better, even if the world forgets what they’re called.” (read by David, 12:08)

• Prediction Markets Scale:

  “They could be comparable to things like the CME or New York Stock Exchange.” (Joey, 24:28)

• Founder Bet Investing:

  “The best founders are extremely good at some things and extremely bad at others... The well-rounded people never really do anything.” (Joey, 49:25)

• Insider Trading Debate:

  “Insider trading being illegal just hands rent to people willing to break the law.... My hypothesis is there is more value lost for the average shareholder from insider trading being illegal than if it were legal.” (Joey, 34:35 / 36:12)

• ETH’s Value Dilemma:

  “I think ETH’s monetary premium expands when the market believes that it can also capture some sort of fee or burn revenue.... When the revenue rounds down to zero, then people think there’s no floor.” (Joey, 59:02-59:35)

Important Timestamps

• 06:25 — Discussion of the “SuitCoiner” era of crypto
• 13:20–16:37 — Crypto as invisible infrastructure, Linux analogy, Polymarket example
• 18:00 — Augur design: “built to survive nuclear war” vs. Polymarket’s pragmatism
• 24:28–25:44 — Prediction markets potential, gambling debate
• 29:08–34:35 — Regulation & insider trading: ethics, practicality, possible reforms
• 41:04 — Why Founders Fund doubled down on Polymarket pre-breakout
• 44:38–46:48 — FBI raid story, government as a “scapegoat”
• 49:25–51:53 — Investing philosophy at Founders Fund; importance of “unusual” founders
• 58:08–62:15 — Asset valuation: Bitcoin as “digital gold,” ETH’s fee revenue challenge
• 70:10–71:55 — Attention shift: AI, robotics, and other tech frontiers vs. crypto focus
• 75:02–76:18 — On the persistence or end of crypto’s four-year cycle
• 81:09–83:06 — Joey’s “10 years in crypto” summary & next-decade outlook

Conclusion: Past & Future of Crypto

• This Decade’s Accomplishments:
  • Bitcoin as digital gold
  • Ethereum as programmable money
  • Working DeFi and stablecoin primitives
  • Prediction markets are now real and growing
• The Challenge Ahead:
  • Distribution and mainstreaming—the next 10 years are about bringing these invisible, effective rails to the world at scale.

“Basically all this stuff needs to be kind of taken to the next level, though, where kind of the average person can use it more.” (Joey, 82:16)

Bankless Takeaway:
Crypto is less about making everyone “crypto-native" and more about quietly upgrading the world beneath the surface. The next decade will be about distribution and bridging, even if the words “crypto” and “blockchain” fade from the user’s sight.