Now Is The Best Time To Build In Crypto

We have entered a “golden age of crypto building.” The foundational infrastructure—chains, stablecoins, and development tools—has matured to a point where the focus can shift from building the rails to creating applications. The challenge for entrepreneurs now is to use these tools to build 10x consumer experiences and business solutions.

From Fintech 1.0 to Fintech 3.0

The evolution of financial technology can be viewed in three stages:

• Fintech 1.0: The 1990s era of companies like PayPal, which accustomed consumers to making payments online.
• Fintech 2.0: The last decade’s wave of startups that built user-friendly interfaces on top of the existing, legacy financial system.
• Fintech 3.0: The current opportunity to rewrite the financial system from the ground up on a programmable software platform where money is a native component.

The “Broadband Moment”: Key Technological Enablers

Several key technological shifts have made today the right time to build onchain, analogous to the internet’s transition from dial-up to broadband.

1. Scalability and Cost Reduction: Five years ago, building consumer applications was unviable due to high and unpredictable transaction costs (gas fees), where a $5 transaction could cost $5 in fees. Today, thanks to scaling solutions, those costs have plummeted to fractions of a cent. This massive cost reduction opens up the design space for countless new applications that were previously impossible.

2. The Rise of Layer 2 (L2) Blockchains:

• Layer 1 (L1): The base layer of a blockchain (e.g., Ethereum, Solana) is optimized for maximum decentralization and security. The Ethereum community recognized the inherent trade-off between this decentralization and the scalability needed for mass adoption.
• Layer 2 (L2): L2s like Base are built on top of L1s to solve this scalability challenge. Base functions like an “HOV lane” for Ethereum; it bundles and compresses millions of transactions before publishing them to the L1. This process allows it to inherit Ethereum’s security and decentralization while achieving massive cost efficiencies.

The Regulatory Unlock

A significant catalyst for the current moment is growing regulatory clarity.

• The Past Bottleneck: For years, founders in the crypto space often spent as much money on lawyers as on engineers due to the unclear regulatory landscape. This “chilling effect” discouraged many talented builders who couldn’t focus on product development and user feedback.
• The Current Shift: With emerging legislation providing clearer “rules of the road,” the barrier to entry is significantly lower. Entrepreneurs can now build with more certainty, enabling them to apply lean startup principles and innovate faster.

Stablecoins: The Killer Use Case

Outside of trading, stablecoins have emerged as crypto’s killer application.

• Global Access to Dollars: The first major unlock was providing anyone in the world with access to programmable dollars. This is a profound change for individuals and businesses in countries with high inflation or limited access to the traditional US dollar system, with remittances being a primary use case.
• The Next Frontier: Local Stablecoins: While dollar-backed stablecoins are dominant, a massive opportunity exists in creating stablecoins for local currencies (e.g., Brazilian Real, Nigerian Naira). This allows entrepreneurs to leverage the benefits of onchain finance—such as efficient lending, borrowing, and payments—within their local economies without forcing dollarization.

Tokenization: From Legacy Assets to New Markets

Tokenization represents the migration of assets from legacy systems to programmable onchain environments.

• Rewriting Legacy Finance: A huge opportunity lies in moving traditional financial assets (stocks, bonds, real estate) from siloed, inefficient record-keeping systems to open, programmable smart contracts. The Coinbase and Shopify commerce payments protocol is a key example, where a system of over a million lines of code for handling escrow, fees, and chargebacks was distilled into a smart contract of about a thousand lines. This demonstrates the potential for radical efficiency improvements.
• Emergent Asset Classes: An even larger opportunity may be in creating entirely new asset classes. The prime example is the creator economy. Currently, creators generate immense value that is captured by centralized platforms. By tokenizing content and creators themselves, a free market can emerge where this value is realized directly by the creators, enabling them to finance their work and build capital markets around their content.

The Intersection of AI and Crypto

AI and crypto are developing in parallel and are highly complementary.

1. Verification: In a world where AI can generate infinite content, crypto can serve as a verification layer to prove authenticity and provenance.
2. Native Money for AI Agents: AI agents are programmable actors that need a native financial substrate to operate effectively. Crypto provides this, allowing an agent to call a smart contract to transact, rather than navigating legacy financial rails through a browser.

Advice for Founders

• Getting Started: A great “Hello World” project for a developer new to the space is to build a user interface for a decentralized exchange (DEX) to understand wallet interactions.
• What to Look For: The most successful founders are builders who understand the technology deeply and can connect it to solving a real customer problem. Often, the end-user doesn’t need to know they are using crypto. YC and Coinbase are looking for hardworking, creative, and team-oriented founders from anywhere in the world.
• The Thesis: The core advice is to “come up with a thesis of what you think is broken and then show up every single day trying to either prove or disprove that thesis.”

• Tags:
• AI
• Tokenization
• Feature
• Crypto
• Fintech
• Y Combinator
• Onchain
• Stablecoins
• Layer 2
• Coinbase
• Base