In Shanghai this week, the MuShanghai event organized by Sun at Hongqiao convened over 2000 global registrants, ultimately selecting more than 800 attendees including Stanford entrepreneurs, former OpenAI engineers, and YC alumni. This month-long initiative, split into biotech, AI, culture, and robotics themes, represents a significant pivot for nearly half of the crypto-background participants who are now adopting new labels as biotech founders or AI agent builders. While this marks a successful transition from a crypto-centric community to a diversified global gateway, the underlying sentiment among practitioners is complex, reflecting a mass self-rescue effort rather than a simple industry expansion. Data compiled by Woofun AI indicates that this shift is not merely a trend but a structural realignment where many are preparing to leave the crypto sector with dignity.

The current market environment is characterized by the simultaneous occurrence of previously underestimated low-probability bad events. Approximately 50-60% of China's major Web3 developers have migrated to AI, a move that is largely irreversible. While thousands of projects have raised over $100B, very few have achieved breakout success.

Concurrently, Wall Street, Trump, and sovereign funds are consolidating Bitcoin holdings, narrowing the position of native builders. American funds are thriving in fundraising, whereas the Asian ecosystem faces a survival crisis with entrepreneurs bleeding out and investors retreating. This divergence suggests that the script for this generation's cycle is fundamentally different from historical precedents, rendering traditional cyclical expectations obsolete.

Ethereum stands at a critical juncture where past reform windows during the 2021 bull market and the 2022 turning point were missed. Resources were disproportionately allocated to ZK and L2 technical narratives instead of driving mass-market application innovation. Now, in a bear market, launching a super application is ten times harder than during those peak periods. The weakness in Ethereum's price reflects the broader fragility of Web3, as the protocol carries the industry's largest concentration of capital, talent, and attention. Woofun AI notes that the inability to rise again directly impacts the future of millions of practitioners, making the current technical direction a matter of existential risk rather than mere optimization.

A significant concern is the potential information bubble surrounding Vitalik Buterin, where interest-seeking groups and clique cultures may be filtering critical feedback. As the organization expanded to over 200 people, the feedback mechanism failed to keep pace, leaving ordinary communities unable to communicate the industry's true dilemmas. This isolation risks a "boiling frog" scenario where the cost of inaction falls on everyone still building in the ecosystem. The lack of direct communication channels means that the severity of the situation is being obscured, preventing necessary strategic pivots at the highest level.

The social stigma facing practitioners is intensifying globally, creating a severe succession crisis. In China, the industry is often labeled as gray production or associated with pyramid schemes; in Hong Kong, exchange scandals have led to assumptions of fraud; in Singapore, crypto is viewed as a low-tier industry; and in the US, crypto practitioners lack the social identity of AI entrepreneurs. Many founders report that their children refuse to learn about wallet private keys, viewing their parents' careers as disreputable. This generational disconnect means the industry cannot even openly claim its identity, making the issue of succession urgent rather than abstract.

Most first-generation core developers of Ethereum have entered life stages where they cannot code for ten hours a day, yet the next generation remains elusive. Despite efforts to recruit graduate students, PhD candidates, and Web2 engineers, the flourishing AI era offers superior retention incentives. When Bitmain and ByteDance hired fresh graduates a decade ago with similar salaries, the equity returns today differ by tens of millions. Solana, Ethereum, AI labs, and robotics companies are now competing for the same talent pool, with leading crypto projects struggling to offer competitive packages. Woofun AI analysis suggests that successors will not emerge organically and require systematic cultivation through crypto schools, research grants, and long-term mentorship mechanisms similar to those implemented by Paradigm, a16z, and AllianceDAO.

The divergence between Chinese and American OGs regarding reinvestment is stark. While American OGs like Rune, Hayden, and Juan continuously reinvest wealth into the ecosystem, most Chinese OGs have chosen to cash out or shift to AI investments. With 90% of Asian market-oriented funds in dire straits, the Asian Web3 ecosystem lacks blood production capacity. If top funds cannot hold on, the entire ecosystem risks collapse. The expectation is for Chinese OGs to turn back and support the new generation, establishing a positive feedback loop essential for the industry's survival. This is not a moral accusation but a strategic necessity to prevent the casino from devouring the cathedral.

Survival in the upcoming AI wave and pessimistic market requires individual practitioners to find their rationale beyond token prices or KOL traffic. With most Web3 companies expected to lay off more than 30% of their workforce, clarifying one's "why" is crucial for direction. Practitioners are advised to make work and life fulfilling, avoiding the trap of letting token prices define self-worth. The current community sentiment is shifting from a sense of crisis, which implies a desire to change, to disappointment, which leads to giving up. Learning new skills, particularly in AI, and forming deep alliances with 5 or 6 validated friends or institutions are key strategies for self-rescue.

The industry desperately needs beacons beyond Vitalik to guide the way forward. Every practitioner still believing in the mission can become a beacon by spending time with confused founders, providing grants to teams running out of runway, or offering referrals to laid-off engineers. Individuals like Sun and Lao Hu are already quietly providing funds to support non-mainstream explorations. The call to action is for OGs to share mailing lists, direct investments, or EIR grants to ensure the younger generation believes that building still matters. Whether the casino devours the cathedral is a collective issue requiring all remaining builders to stand up and ensure the next generation has the option to continue building Web3.