Viewpoint: In the post-encryption Twitter era, non-linear returns have come to an end

Author| Lauris

Compiled by| Deep Tide TechFlow

Welcome to the "Post-Crypto Twitter" era.

The term "Crypto Twitter" (CT) refers to Crypto Twitter as a market discovery and capital allocation engine, rather than the entire crypto community on Twitter.

"Post-Crypto Twitter" (Post-CT) does not mean the disappearance of discussions, but rather that Crypto Twitter, as a mechanism for "coordinating through discourse," is gradually losing its ability to repeatedly generate significant market events.

A single culture cannot sustain itself if it can no longer produce enough significant winners to attract the next wave of new participants.

The "significant market events" mentioned here do not refer to situations like "a token's price tripled," but rather to the attention of most liquidity market participants being focused on the same thing. In this framework, Crypto Twitter was once a mechanism that transformed public narratives into a coordinated flow around a dominant meta-narrative. The significance of the "Post-Crypto Twitter" era is that this transformation mechanism is no longer reliably functioning.

I am not trying to predict what will happen next. Frankly, I do not have a clear answer. The focus of this article is to explain why the previous model worked, why it is declining, and what this means for how the crypto industry reorganizes itself.

Why Did Crypto Twitter Work?

Crypto Twitter (CT) is important because it compresses three market functions into a single interface.

The first function of Crypto Twitter is narrative discovery. CT is a high-bandwidth significance mechanism. "Significance" (Salience) is not merely an academic term for "interesting," but a market term that refers to how the landscape converges on what is currently worth paying attention to.

In practice, Crypto Twitter creates focal points. It compresses a vast hypothesis space into a small number of "actionable" objects at the moment. This compression solves a coordination problem.

To put it more mechanically: Crypto Twitter transforms dispersed, private attention into visible, public common knowledge. If you see ten credible operators discussing the same object, you not only know of the object's existence, but you also know that others know of its existence, and that others know you know of its existence. In liquidity markets, this common knowledge is crucial.

As Herbert A. Simon said, "The abundance of information leads to a scarcity of attention."

The second function of Crypto Twitter is to act as a trust router. In the crypto market, most assets do not possess strong intrinsic value anchors in the short term. Therefore, capital cannot be allocated solely based on fundamentals, but rather flows through people, reputations, and ongoing signals. "Trust routing" is an informal infrastructure that determines whose claims can be believed early enough to make an impact.

This is not a mysterious phenomenon, but rather a rough reputation function calculated continuously by thousands of participants in public. People infer who the early entrants are, who has good pre-judgments, who has resource channels, and whose behavior is associated with positive expected value (Positive EV). This layer of reputation makes capital allocation possible without formal due diligence, as it serves as a simplified tool for selecting counterparties.

It is worth noting that the trust mechanism of Crypto Twitter does not solely depend on "follower count." It is a composite result of follower count, who follows you, the quality of replies, whether credible people interact with you, and whether your predictions withstand reality checks. Crypto Twitter makes these signals easy to observe and at a very low cost.

Crypto Twitter has public trust, while over time, certain communities have gradually formed a tendency to emphasize private trust.

The third function of Crypto Twitter is to transform narratives into capital allocation through reflexivity. Reflexivity is the key to this core loop: narratives drive prices, prices validate narratives, validation attracts more attention, and attention brings more buyers, with this loop continuously reinforcing itself until it collapses.

At this point, the microstructure of the market comes into play. Narratives do not abstractly drive the "market," but rather drive order flow. If a large group is persuaded by a narrative that a certain object is "key," then marginal participants will express that belief through purchases.

When this loop is strong enough, the market will temporarily favor behaviors that align with consensus over the ability to conduct deep analysis. In hindsight, Crypto Twitter was almost like a "low-IQ version of a Bloomberg terminal": a single information stream that integrated significance, trust, and capital allocation.

Why Was the "Monoculture" Era Possible?

The "Monoculture" era was possible because it had a repeatable structure. Each cycle revolved around an object simple enough for large groups to understand, yet broad enough to attract most of the ecosystem's attention and liquidity. I like to refer to these objects as "toys."

The term "toys" is not derogatory, but rather a structural description. It can be understood as a game—easy to explain, easy to participate in, and inherently social (almost like an expansion pack for a massively multiplayer online role-playing game). A "toy" has a low barrier to entry and high narrative compressibility, allowing you to explain it to a friend in one sentence.

"Meta" refers to the manifestation of when "toys" become a shared game board. Meta refers to the dominant set of strategies and the dominant objects around which most participants revolve. The strength of the "Monoculture" lies in the fact that this meta-narrative is not merely "popular," but a shared game that spans users, developers, traders, and venture capitalists. Everyone is playing the same game, just at different layers of the stack.

@icobeast wrote an excellent article about the cyclical nature and changing essence of "trendy things," which I highly recommend reading. https://x.com/icobeast/status/1993721136325005596

The market system we have experienced requires a "window of inefficiency" that allows people to quickly earn "incredible wealth."

In the early stages of each cycle, the market is not fully efficient because the infrastructure for large-scale participation in the meta-narrative has not yet been fully established. While opportunities exist at this time, the niche spaces in the market have not been completely filled. This is crucial because the broad accumulation of wealth requires a window that allows a large number of participants to enter the market, rather than facing a fully hostile environment from the start.

As George Akerlof said in "The Market for Lemons":

"The asymmetry of information between buyers and sellers leads the market away from efficiency."

The key is that for this system to work, you need to provide a highly efficient market for some people, while for others, this market is a typical "lemon market" (i.e., a market filled with information asymmetry and inefficiency).

The monoculture system also requires a large-scale shared context, and Crypto Twitter (CT) provided this context. Shared context is rare on the internet because attention is usually dispersed. However, when a monoculture forms, attention tends to concentrate. This concentration can reduce coordination costs and amplify the effects of reflexivity.

As F. A. Hayek said in "The Use of Knowledge in Society": "The information about the circumstances we must utilize never exists in a concentrated or integrated form, but is dispersed among all individuals in those incomplete and often contradictory bits of knowledge."

In other words, the formation of a shared context allows market participants to coordinate actions more efficiently, thus promoting the prosperity and development of the monoculture.

Why was the "single meta-narrative" once so credible? When the constraints of fundamentals on the market are weak, significance (Salience) becomes a more important constraint than valuation. The primary question for the market is not "How much is it worth?" but rather "What are we all paying attention to? Is this trade already too crowded?"

A rough analogy is that mass culture was once able to concentrate attention on a few shared objects (like the same TV shows, chart-topping music, or celebrities). Nowadays, attention has been dispersed into various niche areas and subcultures, with people no longer sharing the same reference set on a large scale. Similarly, Crypto Twitter (CT) as a mechanism is undergoing a similar transformation: the top-level shared context is diminishing, while more localized contexts are beginning to emerge in smaller circles.

Why Is the "Post-Crypto Twitter" Era Coming?

The emergence of "Post-Crypto Twitter" (Post-CT) is due to the gradual failure of the conditions that supported the "monoculture."

The first failure is that "toys" are being cracked more quickly.

In previous cycles, the market learned the rules of the game and industrialized those rules. Once the game rules are industrialized, the window of inefficiency closes faster, and the duration becomes shorter. The result is that the distribution of returns becomes more extreme: there are fewer and fewer winners, while structural losers are on the rise.

Memecoins are a typical example of this dynamic. As an asset class, they are effective because they have low complexity while possessing high reflexivity. However, it is precisely this characteristic that makes memecoins easy to produce in bulk. Once the production line matures, the meta-narrative becomes an assembly line.

As the market evolves, the microstructure has changed. The median participant is no longer trading with other ordinary people, but rather against the system. When they enter the market, information has already been widely disseminated, liquidity pools have been "pre-buried," trading paths have been optimized, insiders have completed their layouts, and even exit paths have been pre-calculated. In such an environment, the expected returns for the median participant are compressed to very low levels.

In other words, in most cases, you simply become someone else's "exit liquidity."

A useful mental model is that order flow in the early stages of a cycle is primarily dominated by naive individual investors, while order flow in the later stages increasingly exhibits adversarial and mechanical characteristics. The same "toy" can evolve into entirely different games at different stages.

A monoculture cannot sustain itself if it cannot produce enough significant winners to attract the next wave of new participants.

The second failure is that value extraction has overwhelmed value creation.

Here, "extraction" refers to those actors and mechanisms that capture liquidity value rather than create new liquidity.

In the early stages of a cycle, new participants can add net liquidity while benefiting from it, as the market environment expands faster than the harvesting speed of the value extraction layer. However, in the later stages of a cycle, new participants often become net contributors to the value extraction layer. When this sentiment becomes widely recognized, market participation begins to decline. The decline in participation weakens the strength of the reflexive loop.

This is also why changes in market sentiment are so consistent. If a market no longer provides broad, clear paths to victory, overall sentiment gradually deteriorates. In a market where the median participant's experience is "I am just someone else's liquidity," cynicism often becomes rational.

To understand the overall market sentiment of current retail participants, you can refer to this post by @Chilearmy123.

The third failure is the dispersion of attention. When no single object can attract the attention of the entire ecosystem, the market's "discovery layer" loses clear significance. Participants begin to differentiate into narrower fields. This dispersion is not only cultural but also brings significant market consequences: liquidity is scattered across different segments, price signals become less intuitively visible, and the dynamic of "everyone doing the same trade" disappears.

Additionally, there is one more factor that needs to be briefly mentioned: macroeconomic conditions matter.

The strength of the reflexive loop. The "monoculture" era coincided with a period of strong global risk appetite and liquidity environment, making speculative reflexivity appear to be a "norm." However, when capital costs rise and marginal buyers become more cautious, narrative-driven capital flows become harder to sustain in the long term.

What Does "Post-Crypto Twitter" Mean?

"Post-Crypto Twitter" (Post-CT) refers to a new market environment in which Crypto Twitter is no longer the primary coordinating mechanism for capital allocation across the entire ecosystem, nor is it the core engine around which on-chain markets concentrate on a single meta-narrative.

In the "monoculture" era, Crypto Twitter repeatedly and massively linked narrative consensus with liquidity concentration. In the "Post-Crypto Twitter" era, this connection becomes weaker and more intermittent. Crypto Twitter still serves as a discovery platform and reputation indicator, but it is no longer the reliable engine that synchronizes the entire ecosystem around "a trade," "a toy," or "a shared context."

In other words, Crypto Twitter can still generate narratives, but only a few narratives can translate into "common knowledge" on a large scale, and even fewer "common knowledge" narratives can further translate into synchronized order flows. When this transformation mechanism fails, even if many activities are still happening in the market, the overall feeling will seem "quieter."

This is also why subjective experiences have changed. The market now appears slower and more specialized because broad coordination has disappeared. Emotional changes are primarily a response to expected value (EV) conditions. The market's "quietness" does not mean there is no activity, but rather a lack of narratives and synchronized actions that can resonate globally.

The Evolution of Crypto Twitter: From Engine to Interface

Crypto Twitter (CT) will not disappear, but its functions have shifted.

In the early market system, Crypto Twitter was upstream of capital flow, to some extent determining the market's direction. In the current market system, Crypto Twitter is closer to an "interface layer": it broadcasts reputation signals, surfaces narratives, and helps route trust, but actual capital allocation decisions are increasingly happening in "subgraphs" with higher trust levels.

These subgraphs are not mysterious. They are dense networks with higher information quality and frequent interactions among participants, such as small trading circles, communities in specific fields, private group chats, and discussions among institutions. In this system, Crypto Twitter resembles a superficial "facade," while the real social and trading activities occur in the underlying social network layer.

This also explains a common misconception: "Crypto Twitter is declining" usually means "Crypto Twitter is no longer the primary place for ordinary participants to make money." Wealth is now more concentrated in places with higher information quality, restricted access, and more private trust mechanisms, rather than through open, noisy trust calculations.

Nevertheless, you can still achieve considerable gains by posting on Crypto Twitter and building a personal brand (some of my friends and nodes have done this and continue to do so). But the real value accumulation comes from building your social graph, becoming a trusted participant, and gaining more access to the "back-end layer."

In other words, surface-level brand building is still important, but the core competitiveness has shifted to building and participating in the "back-end trust network."

I Don't Know What Will Happen Next

I will not pretend to accurately predict what the next "monoculture" will be. In fact, I am skeptical about whether a "monoculture" will form in the same way again, at least under current market conditions. The key is that the mechanisms that once nurtured the "monoculture" have degraded.

My intuition may carry some subjectivity and contextuality, as it is based on the phenomena I currently observe. However, these dynamics began to manifest earlier this year.

There are indeed some active areas, and it is not difficult to list categories that attract attention. But I will not mention these areas, as it does not substantively contribute to the discussion. Overall, aside from pre-sales and some initial distributions, the trends we see now are that the most overvalued categories are often "adjacent" to Crypto Twitter (CT), rather than directly driven by it.

Argument

We have entered the "Post-Crypto Twitter" (Post-CT) era.

This is not because Crypto Twitter is "dead," nor because discussions have lost meaning, but because the structural conditions supporting the recurring systemic "monoculture" have weakened. The game has become more efficient, value extraction mechanisms have matured, attention has become more dispersed, and reflexive loops have gradually shifted from systemic to localized.

The crypto industry continues, and Crypto Twitter still exists. My view is narrower: the era in which Crypto Twitter could reliably coordinate the entire market into a shared meta-narrative and create widespread, low-barrier nonlinear returns has, at least for now, ended. Moreover, I believe the likelihood of this phenomenon reappearing in the next few years is significantly reduced.

This does not mean you cannot make money, nor does it mean the crypto industry is coming to an end. This is neither a pessimistic viewpoint nor a cynical conclusion. In fact, I have never been more optimistic about the future of this industry than I am now. My point is that the future distribution of markets and significance mechanisms will fundamentally differ from those of the past few years.