Hoskinson: Crypto Lost Retail to Scams and Empty Tokens

Charles Hoskinson says the crypto industry can no longer expect retail users to return simply because another market cycle begins or a new token promises rapid gains. In his latest video, “Devs versus Builders,” he connected retail’s departure to repeated losses, misleading promises, security breaches, and projects designed primarily to extract money from buyers.

He also rejected the idea that institutional capital will repair that relationship. According to Hoskinson, Cardano and its connected projects need products that solve recognizable problems without requiring users to understand cryptography, blockchain infrastructure, or multichain transactions.

Retail Left After Repeated Losses and Extraction

Hoskinson described the previous period of crypto excess through expensive NFTs and meme tokens that reached multibillion-dollar valuations without products or utility capable of supporting them.

One example was an NFT image of a banana priced at approximately $1.5 million. He also pointed to tokens with no practical function reaching valuations of $10 billion during periods of intense meme coin speculation. Such market conditions could not remain sustainable, he argued, and the industry is now dealing with the consequences.

“Crypto got divorced by retail,” Hoskinson said, using divorce as a metaphor for the breakdown in trust between the industry and individual users.

In his account, retail participants did not leave only because crypto prices declined. They left after repeatedly losing money, being misled, suffering hacks, or entering projects structured mainly to extract value. Attempts to return were often followed by another failed token, security incident, or broken promise.

Hoskinson was particularly critical of celebrity tokens and projects that use the popularity of a public figure as a substitute for a working product. Under that model, buyers provide liquidity and attention while the person launching the token receives money and publicity. Repeated failures can create the impression that the wider market is organized against the final buyer.

The video did not include market data quantifying how many retail users or how much retail capital has left crypto. Hoskinson presented the claim as his interpretation of user behavior following multiple cycles of speculation, fraud, and security failures.

He also challenged expectations that financial institutions would push the market higher for existing holders. Institutions enter markets to pursue their own commercial interests, he said, not to increase the value of assets held by retail participants. Greater institutional involvement does not automatically restore the trust individual users have lost.

Midnight, Pogun and RealFi Target Practical Problems

Hoskinson contrasted speculative tokens with projects that he believes address identifiable needs. He presented Midnight, Pogun, and RealFi as three Cardano-connected directions focused on privacy, Bitcoin liquidity, and financial access.

Midnight was described as infrastructure for applications that need both privacy and verifiability. Instead of publishing every piece of information on a public blockchain, an application could prove a required fact while withholding data that the other party does not need to see.

Potential applications cited by Hoskinson included digital credential systems, controlled exchanges of healthcare records, and privately operated AI agents. A user could give an agent access to documents, business ideas, or intellectual property without automatically exposing that information to a centralized platform.

He also discussed digital rights management, royalty distribution, and leasing private trading strategies or specialized AI capabilities. The owner could permit another party to use a strategy without publishing the underlying model or revealing how it works.

These examples describe intended applications rather than confirmation that every product mentioned is already available. Hoskinson used them to explain the commercial activity he expects developers to build around Midnight and the $NIGHT ecosystem.

Pogun was presented as a route toward simpler Bitcoin DeFi access. Hoskinson framed the problem from the perspective of a bitcoin holder who does not want to sell the asset but would like to use it to access liquidity or generate a return.

In the experience he described, the user would select a risk profile and activate a feature, while the infrastructure handled capital allocation in the background.

Hoskinson mentioned possible returns between approximately five and ten percent and a hypothetical movement of hundreds of billions of dollars in bitcoin toward such products.

Those figures represent his view of the market opportunity, not guaranteed returns or recorded capital flows. His invitation to join the Pogun beta also separates the planned experience from a fully developed product.

RealFi was presented as a response to high financing costs in regions with limited access to banking services. In Hoskinson’s model, users could receive better loan conditions by establishing a digital identity and blockchain wallet.

That would provide access to a Web3-native system combining user-controlled identity, self-custody, and financial services connected to Cardano. The motivation to adopt the technology would come from lower borrowing costs rather than an interest in blockchain itself.

Hoskinson said this infrastructure could reduce interest rates from levels reaching 85 percent to below ten percent while lowering remittance costs. He presented those figures as the objective of a possible microfinance model, not as results already achieved by RealFi. Actual lending conditions and user adoption will determine its impact.

Cardano Products Must Hide Blockchain Complexity

For Hoskinson, utility is not enough if a product requires users to understand its technical architecture. His standard is an experience in which someone presses one button, receives the expected result, and never needs to know how many transactions, signatures, or cryptographic processes were executed.

As an example, he pointed to the internet. Most users never inspect TCP/IP packets but rely on internet services every day. PGP email encryption represents the opposite outcome. The technology has existed for decades, but wider adoption remained limited because managing keys and additional steps created too much friction.

The same principle, he argued, must apply to Midnight. Users should not have to manage zero-knowledge proofs, trusted execution environments, multi-party computation, cryptographic curves, or multiple signatures. They should not need to understand the technical relationship between $NIGHT and the other elements operating behind the interface.

Hoskinson compared this approach with Apple’s entry into smartphones. Apple spent years attempting to challenge Windows through its computers without fundamentally changing the market. The iPhone succeeded by offering a new experience that was simple, continuously available, and suited to everyday use.

His argument for Cardano was not that users must be convinced of blockchain’s technical superiority. They need an experience that makes the previous way of completing the same task feel unnecessarily complicated.

This also changes how ecosystem development is measured. The number of repositories, developers, hackathons, or lines of code does not establish that a useful product exists. A measurable result begins when someone can protect personal data, access credit, use bitcoin without selling it, or operate a private AI agent without understanding the underlying infrastructure.

Hoskinson therefore described the shift from developers to builders as more than a change in terminology. Builders must connect technology, design, distribution, and a business model into something people want to use. For Cardano, Midnight, Pogun, and RealFi, his claim about restoring retail participation will be tested through real usage, simple access, and products that solve problems without repeating the extractive models that drove users away.