Anatomy of Failure, Angel Sirakov, SoCyber | ETHSofia 2025

Thank you for the kind words. I don't see anyone. So, yeah, my name is Angel. Uh, and as the presenter said, I have a lot of experience in crypto. And I'm probably the only person that will be presenting today that no longer works in crypto.

And there is a reason for that because I don't believe that we follow the initial principles that we had back in the day when I started in 2017. And now I will tell you why. Yeah, thank you for that. I have created a little presentation and a little bit more laid-back style. I believe that we need to look at things that we have failed in a fun manner.

We want to learn, we want to progress, build something better. Right? So a major point in building web 3 communities and web3 products obviously is the form of gamification. So that's why I chose this amazing pixel design for the presentation. Again I want to start with my opinion on these three topics.

The main three failures of web three for me are first of all uh communication with community u misunderstanding business objectives and then failure of talent. These are the three main concepts which has led us to fighting the wrong battle and then getting the wrong rewards at the end. Right? And here we're starting with something from um Charlie Mer which obviously is very famous and say states show me the incentives and I will show you the outcome. And every single time that we had a cycle in web three this has been probably the most um descriptive um I would say statement.

You had the ICO. The only incentive was to get money and what was the end effect? Someone got money. No products developed. Then we got the NFTts again.

What was the incentive? Just make money out of resel. Two years later, no one is hearing about NFTs. I really hope and I'm praying that we start building better products. But why this is happening?

Why the end result of all of our efforts, your efforts, participation, people that are building, why are there leaving us these results? First, for me, as that's what a person sees when they enter the web three space. This is a cacophony of different types of information coming from people with various uh reputations. Uh there are popular people like the guys here on the images uh who have scammed multiple times that without any repercussion and they have built a very negative uh connotation to the business itself. Allowing these people to freely scam people without repercussions is a responsibility of us as builders as well as the regulators which we so much fear and we want to escape from.

Without the guardrails we have actually turned a lot of the people who can who could have been advocates for web three for progress into exit liquidity. And there's so much time that you can many times I'm I'm sorry that you can spend as being someone else's cash out. You know this is happening right now on pump fun. This is happening on many different types of platforms where the only goal is interactions and therefore fees. Now if the platform is generating fees, they don't care.

Binance did not care in 2017 with their ICO platform whether you're winning or losing. They just wanted to get fees and get this uh profit so they get more tokens of their own. Now this is not a problem exclusively for web 3. Uh right now there's something very dangerous happening in US and Europe. Uh it's called buy now pay later.

This is an absolute plague to society. You should not be supporting any models like this. Uneducated people should not have access to complex um uh financial instruments. This is just if you don't provide the education, you should not be able to distribute dangerous materials. People lose their lives, people lose their health, people lose their children and stuff like this.

But the main three reason three reasons sorry the main three reasons for me at least why this is happening first of all obviously is the media. Uh I would call crypto media just slop. There's no thinking. Whoever is paying the most gets the PR release. We are long away from 20134 where people were writing on CoinDesk how they going to fight the banks or how they going to revolutionize something.

The news right now is Bitcoin is up because of this. Bitcoin is down because of that. Uh I find this extremely unusful for uh new people and I think that we need to change the way that we introduce people because if they the only thing that they see from the get- go is money the only thing that at the end they'll think as is money. Now uh the the main problem with this is in 2017 in the early days with the ICOs and all the stuff there is a popular saying DR you know do your own research right but what is what is research based on I'm a new person how do I find the information well I look at these websites if all of the available information is predefined wrong or misleading how would you say that doing your own research is helping you somehow right for me this is complete lack of responsib possibility from the people who are making the actual money and then uh specifically in the NFD days right in the ICO days we did not have that many problems with um with community because the ICOs were created separately we did not have the infrastructure to create these things like discord channels or telegram stuff everything was you go on their website you find the contract you do the analysis and then you make your own decisions you know I participated in the ICO of throne which is uh in ether Delta, you know, we're talking 2017 at some point. Everyone was on their own.

We were paying like $100 fees to buy $100 of tokens, you know, because the main motivator when the only thing that you see is money is greed and greed is not a vehicle to deliver progress at least in my opinion. Now to understand the game, we obviously need to understand what are the players, right? Let's imagine that we are building a product and we want to know who will be uh creating a product right that there's there's a design problem but that's something else. Now the three motivations for people who participate in crypto uh in general there's more but these are the main ones right first are motivated by price whatever has the highest percentage whatever platform gives me the most profit I'm going to use this right you cannot build around this unless you are providing the best service in in this case meaning the most profitable service and again this becomes a problem because when competition arises there's very few ways to create more value out of thin air so then we move into the second layer of uh let's call it balloon which is for example an airdrop right an airdrop is something which creates artificial value based on on nothing mostly b interactions and things which do not deliver any meaningful progress towards the end goal of any product regardless of what the product is uh just for context we did an airdrop of a huge thing like last year I'm going to give you more context on that later it failed because of just literally one number co put the wrong number of percent distribution intentionally obviously uh and then the whole project uh went to nothing out of 600 600 700 million so you can see how these things are very dangerous now the second group of people is focused on worth uh I think a lot of people here are mostly around this thing this is people who believe that the bitcoin uh value will grow up because of uh let's say the word that it's giving to uh store of value or different types of things access or because the banks will buy more and things like that, right? While I do agree this is a good uh mindset to have, you're going to encounter uh arguments along the way which will be very hard for you to fight because if you don't hold Bitcoin for a lot of time, it's not a that big of a store of a value.

You know, if you bought this year, this just doesn't become like a something for you unless the value goes up, right? But these probably are the most active people. Most of the people that organize events are in this uh segment, right? And then you have the valuedriven people. These are the people that create blockchain, build blockchain.

They don't care about the price. These are developers mostly. You're rarely going to see them online because they don't care about anything that's written online. They sit around and build. Right?

So, these are the three types of players that you essentially meet. Right? For me, the main player who should be the main player in a decentralized economy, which is the end user or uh someone who can benefit from services, is yet to be unlocked. Unfortunately, I don't see any blockchain services out in the wild that have been used right now. For me, the biggest issue with especially with founder teams is the lack of understanding of what does it mean to deliver something.

Right? We've seen a lot of people promising a lot of things over the years based on limited information because there's no secret CEO Telegram where people are getting their own secret information to build better products. you're rather good on in what you do because of your experience in context and because of the problems that you've solved or you just don't know what you're doing and this type of let's call it fake skill levels or these type of CEOs that have created products based on ICOs or different things they created an aura of authority around them without any cover when it comes to skill development or delivery which at the end of the day is the most important part right now lack of expertise leads to obviously delivering some stuff which no one cares about and let's say for example the whole NFT sphere the lack of the expertise of people who developed NFTs led them to believe that having uh recordable things on any form of ledger is something valuable for the end user which was not the case because they did not work in Disney and he didn't understand that copyright laws cannot be transferred in this way because it's not legal and a legal let's say change of something like this requires ears maturity, security, and different types of things that any capable developer could have told them, but they didn't. And everyone again went back to the Dior. No one had the ability as an end user to find this information because they covered with media slop, which is constantly pushing uh some fast profits and things which do not deliver long-term value.

Now this this also created the second wave where people who have made some money based on let's say keeping their money in Bitcoin. You know if you kept your money from 2017 in Bitcoin you made a lot of money. Does this mean that you can develop products? No, it does not mean that. The fact that you're holding something and it goes in value does not make you a creator.

If you have a gold does not make you a jeweler, you know. So in the same way we created a cloud of people with influence especially on LinkedIn and Twitter uh which then is again broadcasting untested ideas to broader audience leading to bubble type behavior. Again, similar thing on a very low level. This is the same thing which is happening on Telegram with the bots and people that are trying to sell you uh stuff on pump.com for example.

You know, again, it's it's the similar thing, similar principle. Now, all of this that is happening right now is leading us to the belief especially in the second group of people who are believing mostly in the worth of something. Let's say the store of value believing that this is what we should be aiming for. Now aiming for the help of the banks for example JP Morgan has this much bitcoin this is this considered something great you know the pension funds will be allowed to put the 401k and our portfolios will go up right investment funds will put an allocation and so on you know you've read the news right well there is no possible way that a corporation or any form of organized entity with shareholders is thinking more about the end user than the shareholder this is This does not exist in the corporate world. So therefore, any interaction with this will take a fee of any form of uh decentralized money or bitcoin or something like this.

None of these parties will ever do a single step without profit with a total amount of let's say for example 21 million for bitcoin or whatever it's the amount for other currencies. That means that every interaction will put more money into the hold of these people. And I find this extremely disturbing. I don't know about you. And it's not about the price of Bitcoin because it doesn't really matter what's the price of Bitcoin.

If Coinbase holds two billion, JP Morgan holds two million and the rest of the people hold this many whatever millions of bitcoins. I think that this is probably the biggest mistake, aiming for the wrong goal for the sake of profit in the long run and then leading us to the space where we are right now where there's literally zero interest in blockchain technology unless it's profit or some corporation has specific um what's the name? specific implementations that can help them manage something which there already are products for this. They are part of other ecosystems and they can allow this type of development to happen. Right now what is the final boss actually for me?

Yeah. Now to understand what's the final boss obviously we need to return to ground zero for those who can't read to the the floor. This is incre this is engraved in the first block of Bitcoin. It says the times 3rd of January 2009 the chancellor is on the brick of sec brink of second bailout for the banks. Bitcoin was created to run away from the banks going to the banks giving them distribution and any form of control over these type of decentralized currency goes against the initial belief of the people that build it.

Whether it's whoever is Satoshi Nakamoto, whoever is the other people that help them, they intentionally worked since the 90s with different types of e money uh there are many many things you know books neurommancer stuff like this crypto um cryptonomia and something like this. This idea comes from the '9s from the 80s and the only goal of this decentralized system is to run away from the centralized government and the banks and right now we are all going precisely in this direction with the goal of profit. And I I find this very disturbing to the um for the initial goals. Now this was a little bit gloomy but obviously there are different types of things that every one of us can do. I'm trying to do this.

I tried to do this actually when I was working in the the blockchain world to speak with people around me about what can be alternatives of what is currently happening. Uh it doesn't mean the blockchain gives you the ability to decentralize governments on on any level. People should be thinking about local government, how they can help, how can they can provide visibility and value on a level that actually helps the everyday user. This for me will be the the final adoption. For example, other thing which is very important if you are lying on a third party service or third party ecosystem, let's say for example shares or um gold or something like this, you are just um an add-on.

If the value comes from somewhere else and not from the things that you're building, when it comes to the discussions of how a product is built or where the product goes, the only thing that would matter would be the underlying asset and not the blockchain technology that is powering the trading itself. Um I had the uh the thought process about this presentation based on my current experience in cyber security which is totally not related. And the main difference between working in blockchain and cyber security is uh responsibility. There is no way to develop or deploy anything in cyber security unless you have proven beforehand that it works in the long run. There are standards.

There are very intelligent people that created these standards that run the cyber security industry as a whole. They would never allow any any of this to happen at all. Not because they don't believe in decentralization. Actually, a lot of the cyber security people are some of the biggest believers in crypto and they actively participate in different types of things even on the dark web and stuff. But they think that even they think that the way that we have built uh the community and the way that we have built incentivized systems are not great.

And uh just to finish off I I'll give you two examples which are very important and can highlight how can you fail that they are from my personal experience. Uh one of them is related to the NFTs. You know we heard about the NFTs. When I was working in crypto we decided that NFTs on their own did not make any sense to us because someone else is you know controlling the contracts things like that. So we created a standard for programmable tokens.

These programmable tokens they acted like um similar to NFTs but the features do not require interactions with smart contract they were inside the token. You open the token, you press a button inside the token, something happens, right? And we created this program, that loyalty program for one of the biggest uh cricket players in the world. His name is Glenn Maxwell. I don't know if you know cricket.

This is the most viewed sport in the world right now. I think maybe it's after football, but maybe it's before. Every single game is watched by hundreds of thousands of people. Every single cricket fan has millions of subscribers online. And we had the ability to work with the with the person.

We developed the whole program. We developed the the infrastructure, the discord, the websites and so on. We created the initial um how do you call that the initial rails to deliver long-term loyalty program with them. And then with the moment we have developed it, we have 25,000 people on this court. We're doing the interviews with this cricket player.

It's like having Cristiano Ronaldo on this court, right? His wife is there. It's amazing. Everyone loves it. The moment when we reached out to the the partners with who signed the contract, they immediately said there's not enough activity similar to like let's say gambling or random chances or things like that and they pulled out.

So we had to cancel the project live project because the guys thought that there's not enough value in creating community based on these principles, right? Obviously I do not agree but you know it's not my money. Uh so that's how most of the NFT projects got cancelled. Everyone of you has seen a Porsche or Adidas or someone else. All the projects get cancelled because of this because there's no vehicle to deliver what the actual value that the brand wants to deliver because we misrepresented what we actually give with this community.

And the second example much more much worse in a personal sense when we had the big project we have we had discord with 550,000 people. If you know the infrastructure of Discord, probably most of it is bots. Probably 80 to 90% of Discord, Telegram or any other structure that you use online is bots. But let's even say we had 50,000 people. We built a a polygon based uh Tamagotchi type of game again with the programmable tokens.

We had 30 million transactions. We were first on OpenC for around four or five months on Polygon. Excellent partnerships. The Polygon main team loves us. We create the how they call ecosystem with partnerships.

We do everything the right way every day. Giveaways, uh, points for the airdrop and stuff like this. The moment with the final decision came in, we're back to the talent slide. A lot of people made a lot of money without the ability to make meaningful decisions. The moment where the airdrop distribution had to happen, our CEO decided to give to the community, which was the only reason why we were on the map, five time less tokens than we agreed, you know.

Uh, and so this became a big problem. And again apart from this they also made a smart contract mistake which created I'm just going to tell you you can imagine what happens when discord with 500,000 accounts thinks they're rack pulled right so you have all this type of armagen happening because someone based on greed based on lack of experience is making decisions for a lot of money and a lot of lives. So if you are building projects in web 3 and I hope you are and I hope you are here for more than number goes up I highly recommend to you to speak with people who have active experience in the specific field that you want to solve problems for. If you don't have it you will not be successful. Blockchain is an add-on to existing services for the time being and the only way to deliver something meaningful is to understand the process and to deliver good stuff.

Now, finish on a to finish on a uh more positive note, right? I still believe there's a lot of good people in crypto and I still believe there's a lot of people that want to build, you know, if you follow the news last week was the steam hack type of thing with uh the person that was a cancer patient. Zak XBT coffees you other people. Everyone helps him to find the guys to return the money to the scammer and to um essentially solve the problem, find them, report them and so on. But in an industry where probably pumpf fun is listing 100,000 tokens per day, several people will unfortunately not make the spring or several birds as you say in Bulgaria will not make the spring.

So I beg you and pray for all of you to build and deliver reliable products with thinking of the future and learn from other people's mistakes so we can be better tomorrow. Thank you.

I don't know if that's a question time if there's any questions happy to answer. I don't I don't see the people actually so I don't know.

Okay. Oh,

first of all, very nice presentation.

Thank you.

It seems to me that we live in latestage capitalism where everything is financialized and crypto helps exacerbate this a lot. Would you agree that education is a very big um is in the root of all these problems that you had in the beginning of the presentation? So uh education is um let's say not even only the crypto education any form of education right now is only a I think belief from the past you know what you consider education let's say if you go to school the the reason why schools were created formal education was created so people don't lose their hands when they work in the factory after the second world uh second industrial revolution no there was no uh government incentive to make you murder. This is no such thing, right? People who are in power want to keep the power.

Their children are in Harvard, your children are not there. They create the relationships and so on. The education is the most important part, but saying education and delivering education are two very different things, right? And then the only way to educate people who are in danger in crypto is education to be in the point of interaction. If the education is not in the wallet, if it's not on pump.

com and if it's not on the binance before you trade, you need to watch this course, you will never be able to reach those people because of the media slope. One will advertise an educational product which is not profitable that doesn't make sense. Uh otherwise yes my answer is yes but unfortunately I don't see u incentive from people to do it. Why pump phone will make you smarter? This is this is the this is the main problem and that's why this is the whole reason for the presentation because I want people to to start thinking back again to the basics you know why they created this thing why this ecosystem exists right why what's the name of the guy the binance CEO he's not your friend he has a PR team I work in marketing and PREO says what I say he doesn't say what he thinks because thinking is something let's say expressing uh free opinion and stuff in a corporate world is a suic side because the way that people interact with data, the way people research and when you live in when you have shareholders, you know, Binance has I don't know how many shareholders is impossible for them.

Yeah. Did I answer?

Yeah. Yeah. Yeah.

All right.

So, my next question is, do you find anything valuable of of lately in in crypto? Anything valuable of of lately in crypto? Like in in terms of crypto? Yeah, in terms of innovation.

Oh yeah, 100%. I I find the the basic the the whole infrastructure, you know, the way that the bitcoin is built this type of uh proofs and the way that you don't need a third party, this is absolutely revolutionary. But I think that it should be linked to price. The moment that you link uh let's say uh how do you call that currency to price then you lose the ability for people to use it, right? You cannot right now go buy cucumbers with one bitcoin.

Oh, however, because tomorrow bitcoin cost more or less. This is not something that you can use for currency which which was the original intent of any e- money. These guys made other e- money before that and the double spent was the problem. So they solved a lot of problems and and there's other things. I still believe that loyalty programs should be built with tokens.

I mean Starbucks I think still build with tokens and they have one of the most famous uh loyalty programs. is bringing them a lot of clients but there is no trading. It's just the blockchain proving it the accounts and so on. Uh I don't I don't remember maybe maybe that's the name of the company. Third web for example this was a company that does a lot of integrations like Zapier but for crypto they had so many integrations back in the day where people can enhance the capabilities of their website with web3 functions but most people sorry most people don't use it because they want to go up because their motivation is be in the green not stay away from the government or banks.

So yeah

thank you. Yeah, thank you. So, my name is Constantine Mikos. I'm a lawyer and actually I would like to to to ask you what do you think about the new regulation that are coming into force and uh about the function of the state in regulating the crypto and making it less or more interesting as a financial tool or just a tool for tokens. uh you know uh useful tools

uh well well in the context let's say of Bulgaria I guess probably mean the mika regulations I don't

of Europe you have the European context and then the USA context but let's talk about the European context

from the European context specifically for the Bulgarian context I wish all the government transactions are on chain because I want to know where my money is going and I think there's a lot of uh benefit for the the citizen of the Europe European Union to get out of this. I'm not quite sure that they are will be implementing in this way because I think that they will be going on the e-oney type of control way rather than the transparency way. Uh and this will be a mistake for me. People will stay away from this. Uh also if the European Union thinks that they can limit the use of let's say for example the um self custody wallets, that's impossible.

You cannot stop VPNs. I can install whatever I want. Right? So very need to be very careful need to be business oriented. It needs to solve the problems that the citizens have not to control the money because the if monetary control is the goal they can achieve it but they will then first of all break the what's the name the dragon here and then uh also they will not achieve anything because people will avoid using government issues issued e- money.

I don't I don't think that um this will be helpful in terms of identity, blockchain identity and things like that. 100% yes. I know there's some efforts related to this. As long as they the they don't buy the ARM, I think regulation is necessary specifically in control for people who are just entering the crypto market. There needs to be something which is like a entry level like for driving license or something like this.

I don't know what it is but something. Did I Did I ask?

Oh, more for sure. More for sure. Oh, no. More for sure. Um JP more.

For me, it's already like that, you know.

Well, 2 million bitcoins are owned by Coinbase in their wallet. So if you think that any currency has 10% of its hole in a single place and does decentralized, I don't know, I can't help. There's also, you know, the guy Michael Sailor has a lot. Yes, he does. He's doing a lot of the community, but 5% of the total value, whatever.

JP Morgan has a lot. And again, we're returning to the the motivation. Bankers are motivated by profit. I don't blame them. This is their prerogative.

They should be with this. But we allow them to allowing them to control the decentralized process is an illusion because they don't have this goal. Not at all. I'm not I'm sure that they this is not a word that they use in a sentence at all in the bank. So yeah, I I I feel that you mentioned something about just last thing.

I know there's someone else you mentioned something about the new the capitalism. We you in some place in the world you're already there. The people in China that don't see the sunlight. They work in the factory. They have the the net so they don't jump.

What more is there for the to to reach Blade Runner? You know, it's just the the tech that you don't see the holograms. Basically, it's the same. Some places you see them. Thank you.

I don't want to, you know, delay the other people, you know.

Give a round of applause.

Thank you. Heat.