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Many blockchain startups, dedicated to the values of decentralization and Web3, view themselves as distinct from the traditional tech world. But at the end of the day, they are subject to the same business forces as any other startup. I was reminded of this upon reading my colleague Jessica Mathews’s new Fortune cover story “The Age of Unicorpses.”

The title is a reference to a Fortune cover story from 2015, “The Age of Unicorns,” which was illustrated with one of the horned beasts sporting a tech-style hoodie. At the time, the unicorn moniker was bestowed on startups with $1 billion valuations—a rare feat that only 80 or so had achieved around the world.

Today, things are very different in two respects. First, “unicorns” are now about as rare as pigeons, as there are around 1,200 of them, including “decacorns” valued at $10 billion—and even firms like TikTok and SpaceX that are technically unicorns despite being worth north of $100 billion. Second, the word unicorn once connoted a healthy startup on its way to becoming a profitable public company. Now, many in the category are struggling, and some, like Seattle logistics startup Convoy, have simply blown away.

There are a number of reasons for the unicorns’ change of fortune, but the biggest are probably macroeconomic as high interest rates have made investing in risky startups less appealing. Meanwhile, there is a general hangover from the pandemic era when too many investors plowed money into unproven firms and drove up valuations to unsustainable levels. The upshot is that the venture capital environment is very different as few new unicorns are being minted, while many existing ones are struggling to find new infusions of cash.

This has obvious implications for the crypto sector where, after regulators cracked down on ICOs and other forms of token sales, startups began to rely evermore on venture money to grow. Add in the fact that many VC shops got badly burned by high-profile frauds—recall Sequoia and Paradigm each flushed away $200 million or more on FTX—and the game is very different now.

This might not be entirely a bad thing as many in crypto complained of venture capitalists throwing around their weight in an industry that’s supposed to be about decentralization—see Leo Schwartz’s insightful interview with a16z’s Chris Dixon on this topic. But if crypto startups are going to survive, they will need to show more discipline than in the past as this takeaway from the unicorpse piece suggests:

“The tech industry has always attracted optimists. That characteristic is often necessary to build a company in a high-growth, high-fail-rate world. But those who are best positioned to get through 2024 may be those who exercised restraint and didn’t get carried away with the markups on private tech shares that made so many founders rich on paper just a couple of years ago—founders who stayed disciplined with hiring decisions and with the number of shiny high-risk projects they took on.”

Crypto founders, take note. Have a great weekend, everyone.

Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts

DECENTRALIZED NEWS

Regulators in Florida and Alaska have barred Binance.US from serving their residents, while three other states reached deals letting it operate so long as founder CZ divests his voting shares. (WSJ)

A New York federal judge sentenced the lawyer for OneCoin, whose “Cryptoqueen” robbed customers of billions, to 10 years in prison. (Cointelegraph)

Venture capitalists are plowing into projects tied to yield-bearing stablecoins despite the ongoing regulatory risks. (Bloomberg)

The feds announced plans to sell $117 million worth of Bitcoin seized from a drug trafficker who operated on the long-shuttered Silk Road. (Decrypt)

Bitcoin appears to have halted its slide and is poised to end the week trading around $41,000. (CoinDesk)