We consider the question of whether average-case PPAD hardness can be based on standard cryptographic assumptions, such as the existence of one-way functions or public-key encryption. This question is particularly well-motivated in light of new devastating attacks on obfuscation candidates and their underlying building blocks, which are currently the only known source for average-case PPAD hardness.

Central in the study of obfuscation-based PPAD hardness is the sink-of-verifiable-line (SVL) problem, an intermediate step in constructing hard-on-average instances of the PPAD-complete problem source-or-sink. Within the framework of black-box reductions we prove the following results:

- Average-case PPAD hardness (and even average-case SVL hardness) does not imply any form of cryptographic hardness (not even one-way functions).

- Average-case SVL hardness cannot be based either on standard cryptographic assumptions or on average case PPAD hardness (and is thus not essential for PPAD hardness).

- Any attempt for basing the average-case hardness of source-or-sink on standard cryptographic assumptions must result in instances with a nearly exponential number of solutions.

Taken together, our results imply that while it may still be possible to base average-case PPAD hardness on standard cryptographic assumptions, any black-box attempt must significantly deviate from the obfuscation-based approach: It cannot go through the SVL problem, and it must result in source-or-sink instances with a nearly-exponential number of solutions.