We built not for the peak, but for the valley. That sentence has guided my work since the 2017 ICO collapse, when I watched a whitepaper's egalitarian rhetoric dissolve into a rug pull before my eyes. Today, I see the same pattern in a new venue: the White House's semiannual agenda, which announced a record 129 deregulatory actions for every new rule. For the macro analysts, this is a policy shift. For us in Web3, it is a mirror—reflecting both the promise of freedom and the peril of unaccountable power.
The number itself is staggering. 129-to-1. The White House claims this is a supply-side stimulus, cutting red tape to boost short-term growth. But beneath the political headlines lies a deeper question: Who profits from this unshackling? In my years auditing token distributions and DAO governance, I have learned that every system of rules—or lack thereof—favours someone. If we do not examine the beneficiary, we are merely moving the chairs on the Titanic.
Context: The Deregulatory Wave and Its Echo in Crypto
This is not the first time a government has celebrated removing guardrails. In 2000, the Commodity Futures Modernization Act effectively deregulated over-the-counter derivatives, leading directly to the 2008 financial crisis. In 2017, the SEC's initial reluctance to classify ICOs as securities created a window of regulatory arbitrage that fuelled scams. The pattern: rapid deregulation, euphoria, then collapse and a painful re-regulation. The White House's 129-to-1 ratio is a historical echo.
For the crypto industry, this moment holds both immediate and structural implications. On the surface, a pro-deregulation administration could mean friendlier SEC rules, clearer guidelines for DeFi, and reduced enforcement against protocols. We have already seen hints: the Ethereum ETF approvals, the pause on certain investigations. But the deeper signal is about legitimacy. A regulatory vacuum can be a breeding ground for innovation—or for exploitation. Which direction we take depends not on Washington, but on our own governance choices.
Core Analysis: The Dual-Edged Sword of Relaxed Rules
Let me ground this in what I observed firsthand. In 2024, during my work with "The Alignment Circle," I mentored three DAOs through their formative stage. One, a lending protocol, chose to implement a voluntary KYC layer that also protected user privacy via zero-knowledge proofs. The founders understood that regulatory compliance is not an enemy of decentralization—it is a strategic asset. Another DAO, however, hid behind the promise of "code is law" and refused any form of accountability. When a vulnerability emerged, they had no fallback, no community trust, and the project dissolved into litigation.
This is the paradox of deregulation. On the macro side, the 129-to-1 ratio will likely spur investment in sectors like energy, finance, and technology. But for blockchain specifically, the risk is that the absence of clear rules invites the very forces we sought to evade: centralized intermediaries dressed in pseudonymous code. Without a regulatory floor, large token holders—the whales, the VCs—can orchestrate governance attacks with impunity. The 2022 Terra collapse was not a failure of regulation per se; it was a failure of self-regulation. The market punished it not because the SEC sued, but because users lost their savings.
In my own analysis, I have found that the most resilient protocols are those that treat regulatory uncertainty as a design parameter, not an afterthought. For example, the protocol I audited in 2025, Harmony Bridge, embedded privacy-preserving KYC into its smart contracts. This was not forced by any law; it was a choice to build trust. “Trust is the only protocol that cannot be coded,” I wrote then, and I believe it now more than ever.
Contrarian Angle: Deregulation as a Pretense for Centralization
Here is the uncomfortable truth the 129-to-1 ratio conceals. Deregulation is often sold as freedom, but it can be a precursor to institutional capture. When rules disappear, the biggest players—those with capital, lawyers, and lobbyists—are best positioned to operate in the grey. Smaller projects, lacking those resources, are left vulnerable to fraud or simply outcompeted.
Recall the 2017 narrative: "We don't need more users; we need more stewards." That was a call for community responsibility. But today, I fear the opposite is happening. The rush to embrace deregulation is tempting founders to skip the hard work of building ethical governance. Instead of designing quadratic voting or sybil-resistant mechanisms, they rely on "we'll figure it out later." The 129-to-1 ratio becomes an excuse: "The government is stepping back, so we can step into the void with anything."
But history shows that vacuums are filled by the strong, not the just. Without proactive self-regulation, the crypto industry will invite a backlash that makes the SEC's enforcement actions look tame. The long-term instability the macroeconomic report warned about is exactly that: a pendulum swing from permissiveness to suffocating control.
Takeaway: The Stewardship Imperative
We don’t need more protocols; we need more accountable governance. The 129-to-1 ratio is a signal, but not the one politicians think. It is a warning that trust cannot be outsourced to governments. It must be encoded in our communities.
For builders: Do not celebrate deregulation without asking who it serves. Implement transparent Treasury management, quadratic voting, and dispute resolution mechanisms—before a crisis forces you to. For users: vet protocols not just by their code, but by their governance resilience. The valley will come, as it always does. Those who built foundations on trust will endure.
I close with a commitment I made during my 2022 burnout in Yilan: I will continue to write not for the hype cycle, but for the long arc of ethical decentralization. The 129-to-1 ratio is a door—whether it opens to liberation or chaos depends on the stewards who walk through it. We built not for the peak, but for the valley. Let us be ready.