‘Sunk-Cost-Maxxing’ Threatens the Future of Long-Term Crypto Innovation
The rapid pace and ever-changing narratives of the crypto industry are stifling sustainable development, argues Rosie Sargsian, head of growth at Ten Protocol. In her recent analysis titled “Why Crypto Can’t Build Anything Long-Term,” Sargsian highlights how constant pivots and short-lived hype cycles are undermining the potential for meaningful innovation in blockchain and decentralized technologies.
Sargsian introduces the concept of “sunk-cost-maxxing” — a phenomenon where crypto projects over-commit to short-term trends despite diminishing returns, rather than investing in long-term infrastructure. Unlike traditional business strategies that recommend pivoting away from failing initiatives, the crypto industry often takes this to the extreme. Founders are incentivized to abandon original visions in favor of the next viral narrative, leading to a culture of ephemeral projects.
According to Sargsian, the crypto sector now operates on an “18-month product cycle.” Within this compressed timeframe, a new trend emerges, funding surges in, and projects rush to capitalize. However, within six to nine months, interest fades, prompting a wave of pivots. “This cycle used to last three to four years during the ICO era,” she notes. “Then it shrank to two years. Now, you’re lucky if it lasts a year and a half.” She adds that crypto venture capital funding dropped nearly 60% in Q2 2025 alone, reducing the runway for projects to mature before the next trend takes over.
While Sargsian doesn’t place the blame squarely on founders, she emphasizes that the structure of the industry makes long-term planning nearly impossible. “They’re playing the game the way it’s designed,” she explains. “But the game itself is broken.” True infrastructure, she argues, takes years to build — typically three to five. Similarly, achieving product-market fit demands prolonged experimentation and iteration, something that quarterly cycles simply don’t allow.
The problem is further compounded by the way projects incentivize adoption. Token launches and airdrops may succeed in attracting early users, but without a sustainable framework, these incentives often backfire. Many early adopters “dump” their holdings as soon as value materializes, leading to a collapse in community engagement and platform usage. This pattern has been especially apparent in sectors like NFTs, where speculative booms have been followed by sharp busts.
Sean Lippel, general partner at FinTech Collective, echoed Sargsian’s concerns. He pointed out that long-term vesting schedules — such as the 5+ year model proposed by A16z — are often met with resistance. “I mentioned support for it at an industry dinner, and people looked at me like I was insane,” he said. “It’s astonishing how many founders have gotten rich building nothing of lasting value.”
The debate raises a critical question: Can crypto evolve beyond the hype-driven cycles that currently define it? If meaningful innovation requires years of focused development, then the industry must rethink how it rewards builders and investors.
One of the core challenges lies in aligning incentives for both short-term liquidity and long-term commitment. While speculative interest provides necessary funding, it often undermines the very outcomes it seeks to support. For example, token price surges may temporarily increase user engagement, but unless the underlying product solves a real-world problem, users will quickly move on.
Furthermore, the psychological toll on developers cannot be ignored. Constantly chasing trends creates burnout and discourages deep technical work. In such an environment, it’s no surprise that many talented engineers opt for more stable industries where they can focus on building, rather than pitching.
Another contributor to the problem is the lack of regulatory clarity. Many projects operate under legal uncertainty, which makes it difficult to plan for the long term. Without clear guidance on token classifications, securities laws, and compliance frameworks, founders are often forced to make reactive decisions rather than strategic ones.
To shift toward sustainability, the industry needs a cultural change. That includes embracing longer vesting schedules, rewarding long-term product development, and supporting teams through multiple iterations — not just during bull markets. Venture capital firms, too, must adjust their expectations, valuing patience over rapid exits.
Education also plays a role. New entrants to the space must understand that real innovation takes time. Highlighting case studies of successful projects that took years to mature — such as Ethereum or Cosmos — can help recalibrate expectations and encourage perseverance.
In addition, the development of modular and composable infrastructure can help mitigate some of the risks. By building tools and frameworks that others can reuse, teams can contribute to a broader ecosystem without having to reinvent the wheel with every new cycle.
Ultimately, the crypto space must decide whether it wants to be a playground for speculation or a foundation for the future of finance and technology. If it chooses the latter, then the current model of “sunk-cost-maxxing” must be replaced with a more sustainable, disciplined approach to building.
Without systemic changes, the industry risks becoming a graveyard of half-built ideas — each abandoned at the first sign of waning interest. Only by committing to long-term thinking can crypto fulfill its promise of decentralization, transparency, and global accessibility.