Tweet 1 / Hook Kayhan, Iran’s conservative mouthpiece, just published an editorial urging the regime to continue military actions and reject US diplomacy. The timing is no accident. As the US election cycle heats up and red sea tensions spike, Tehran is signaling: we will not negotiate under pressure. But beneath the surface of this geopolitical drama lies a story about sovereignty, control, and the very architecture of decentralized networks. And it’s a story that hits close to home for anyone building in crypto.
Tweet 2 / Context Iran has long used cryptocurrency to bypass Western sanctions. The regime mines Bitcoin using subsidized energy from power plants originally designed for oil refineries, and it has developed a network of peer-to-peer exchanges to facilitate international trade outside SWIFT. According to Chainalysis, Iran received roughly $1.2 billion in crypto value in 2023, mostly through mining and over-the-counter trades. The government officially recognizes mining as an industrial activity, requiring licenses and selling mined coins to the central bank. But here’s the irony: while Iran leverages crypto to assert financial sovereignty, the regime simultaneously maintains a tight grip on access and usage. The public cannot freely trade; wallets are monitored, and foreign exchanges are blocked. Sound familiar?
Tweet 3 / Core Insight This situation mirrors a deeper tension within our own industry: the gap between code and community. We preach “trustless” systems, yet many protocols rely on centralized oracles like Chainlink, which in turn rely on off-chain validators. We champion DAOs, yet smart contract upgrades are controlled by multi-sig wallets held by a few core team members. In Iran, the regime controls the keys to the crypto kingdom: mining licenses, exchange access, and international gateways. The blockchain itself may be decentralized, but the access layer remains highly centralized. Verify the code, trust the community. But when the community is a state actor with censorship power, trust becomes a fragile assumption.
Tweet 4 / Core Insight Kayhan’s call to “continue military action” is also a proxy for a different war: the war over liquidity. Just as Iran slices its sanctioned economy into parallel black markets to avoid detection, the crypto ecosystem has fragmented liquidity across dozens of Layer2s. The same small user base jumps from Arbitrum to Optimism to zkSync, hunting for airdrops and fee rebates. This isn’t scaling—it’s slicing already-scarce liquidity into fragments. Remember, Bulls react. Bears reflect. We build. But when the building happens in silos, we replicate the very inefficiencies that blockchain was supposed to solve. Iran’s fragmented economy is a cautionary tale: sovereignty without interoperability leads to isolation.
Tweet 5 / Contrarian Angle The contrarian view argues that Iran’s crypto adoption actually strengthens its sovereignty. By mining BTC with stranded energy and receiving payments in stablecoins, the regime can finance its proxies without relying on the dollar-based banking system. In fact, the Iranian military has reportedly used crypto to purchase weapons components. From a purely functional perspective, this is a success story for permissionless money. But here’s the blind spot: Tech changes. Values remain. The same tech that empowers an authoritarian regime to survive sanctions also allows it to surveil its citizens more effectively. The Iranian government has deployed blockchain-based voting systems for local elections, but voter data is stored on government servers. The crypto community often celebrates “sovereign individuals” while ignoring that states can be sovereign too—and they can use these tools to fortify their control.
Tweet 6 / Contrarian Deep Dive The deeper problem is that crypto’s value proposition—trust minimized computation—does not automatically translate to human freedom. In Iran, the regime uses crypto mining to generate foreign currency reserves that fund its intelligence agencies. It uses decentralized exchanges to trade oil for goods from Russia, bypassing sanctions. The chain is transparent, but the entities behind the transactions are state-owned. This is not a bug; it’s a feature of a technology that is agnostic to governance structures. The question we must ask is not “is crypto good or bad for Iran?” but rather “under what conditions does permissionless infrastructure lead to liberation versus further entrenchment of power?” Based on my experience auditing 150 ICO whitepapers back in 2017, I saw too many projects assume that code alone would create a better society. They were wrong.
Tweet 7 / Technical Observation From a technical standpoint, Iran’s approach reveals a critical vulnerability in DeFi’s oracle architecture. Most DeFi protocols depend on price feeds from Chainlink, which gathers data from centralized exchanges like Binance. If a state actor like Iran—with its own mining and nationalized banking system—were to manipulate the price of its native crypto asset on domestic exchanges, it could theoretically affect the global price feed. Chainlink’s decentralized node network is supposed to mitigate this, but in practice, the majority of nodes are still run by US-based entities. Oracle feed latency is DeFi’s Achilles’ heel. In a bear market, where liquidity is thin and margins are tight, a manipulated price feed could trigger cascading liquidations. Iran doesn’t need to hack the blockchain; it just needs to influence the off-chain data sources that smart contracts trust.
Tweet 8 / Practical Takeaway So what does this mean for us as builders and investors? First, stop treating geopolitics as noise. The same state actors that drive oil prices also influence the crypto market through mining, sanctions, and regulatory signals. Second, evaluate Layer2 projects not just on TVL but on the nature of their community. Is the governance truly dispersed, or does a single entity hold the upgrade keys? Third, demand oracles that are robust to state-level manipulation. In a bear market, survival matters more than gains. Survival matters more than gains—use on-chain data to judge which protocols are bleeding liquidity, but also judge which ones have a community that can withstand external pressure.
Tweet 9 / Forward-Looking Thought Kayhan’s editorial is a reminder that sovereignty is not a binary property. Iran is sovereign over its territory, but its citizens lack financial privacy. The regimes we dislike can also become users of our rails. The only safeguard is not the code itself, but the social layer that governs the code. Verify the code, trust the community. But if the community includes a hostile state, you’d better have a fallback. The future of crypto will not be determined by TPS numbers, but by our ability to build systems that are resilient to capture—whether by a government or by a foundation. Tech changes. Values remain. The values we choose to embed in our protocols today will define whether tomorrow’s Iranians use crypto to break free from censorship or to further entrench it.
Tweet 10 / Takeaway As the ETF approval brought mainstream attention, the mistake of many is to believe that institutional adoption means the end of crypto’s political edge. In reality, the opposite is true. The more intertwined crypto becomes with global finance, the more it will be used as a tool of statecraft. Iran’s lesson for us is clear: decentralization is not a technical feature; it is a political commitment. Without that commitment, we are just building better databases for existing power structures. Bulls react. Bears reflect. We build. But we must build with eyes wide open, seeing the world as it is—not just as we wish it to be.