The Impact of 'Sunk-Cost-Maxxing' on Long-Term Cryptocurrency Development

The cryptocurrency landscape is facing significant challenges in developing sustainable projects due to a fast-paced environment that encourages short-term thinking. Rosie Sargsian, head of growth at Ten Protocol, highlights the prevalence of a 'sunk-cost-maxxing' mentality among founders, impacting their ability to turn crypto ventures into long-term successes.

Key Takeaways

Short Product Cycles: The average product lifecycle in crypto has shrunk to 18 months, compared to previous cycles of 3-4 years.
Investor Behavior: Many investors and founders prioritize immediate rewards over long-term stability, leading to projects failing to develop meaningful infrastructure.
Need for Long-Term Strategies: Sustainable growth requires patience and a commitment to developing ideas over several years, despite the industry's trend towards rapid pivots.

The Dilemma of the Crypto Industry

In a recent article on X titled "Why Crypto Can’t Build Anything Long-Term," Rosie Sargsian from Ten Protocol expressed concerns over the short-term focus predominant among cryptocurrency founders. She noted that many project leaders exhibit “paper hands,” abandoning projects at the first sign of obstacles.

According to Sargsian, while traditional business advice suggests avoiding the sunk cost fallacy by pivoting when things aren't working, the crypto industry has escalated this to what she terms "sunk-cost-maxxing."

The 18-Month Product Cycle

Sargsian identified a rapid 18-month product cycle dictating how crypto projects evolve. This cycle typically sees a new narrative gaining traction, leading to increased funding and excitement before quickly fizzling out.

This process intensifies within a six to nine month period, after which interest wanes and founders are forced to find the next big idea. “This cycle used to span 3-4 years during the ICO era,” she explained. “It has since been reduced to two years, and now it’s down to an 18-month window if the project is lucky. As a result, crypto venture funding plummeted nearly 60% in one quarter (Q2 2025), pressuring founders to adapt quickly.”

While Sargsian does not entirely fault the founders for this behavior, she believes they are playing “the game correctly.” However, the industry’s framework nearly prevents long-term vision, she argues. “You can’t construct anything valuable in just 18 months. True infrastructure usually demands 3-5 years, and real product-market fit takes years to establish, not just a few quarters.”

Challenges in Long-Term Thinking

A major hurdle for cryptocurrency projects is figuring out how to engage users and encourage them to remain long term after initial excitement fades. Sectors such as NFTs often experience significant boom-and-bust trends.

Utilizing tools like token launches and airdropped rewards can attract initial interest, but without careful planning, these strategies might lead early investors to sell off their tokens right after the drop, leaving the platform behind.

In response to Sargsian’s insights, Sean Lippel, a general partner at FinTech Collective, shared similar views. He noted that some founders and investors resist adopting solutions that promote long-term thinking. “At a recent industry dinner, my advocacy for A16z’s proposal for 5+ year token vesting was met with looks of disbelief. It’s absurd how many founders have profited without creating anything sustainable in this space,” he stated.

Sean Lippel

Conclusion

The cryptocurrency industry is at a crossroads. As rapid product cycles and immediate investor gratification overshadow the need for sustainable growth, many projects risk falling into the trap of short-lived success. Fostering an environment that values long-term outcomes may be crucial for the future of blockchain technology and its applications.