1/ THE STATE OF CRYPTO
2/ Bad week, bad month, bad year...
Esp. for the over-levered, greedy, and unethical!
The long-term builders have been hurt by association, but they aren't the ones who've been perpetuating fraud or fleecing investors.
The innovators will be here when the trash is removed.
3/ Who's hurt and who's left?
Opaque lenders: dead
CeFi bucket shops: dead
Low float tokens: dead
No diligence VCs: dead
Paid personalities: dead
And good riddance!
Who's left, what has been built in the past several years that is new, novel, and interesting?
4/ This is my favorite slide of all time (h/t us @MessariCrypto we created it).
Crypto is inevitable because we've made - despite setbacks - significant progress with bitcoin, stablecoins, distributed computing, scalability, onchain financial primitives, and governance.
5/ On Bitcoin:
There were some narrative violations this year. (Rainbow chart dead. Bitcoin mining struggling. Saylor, El Salvador entering max pain.)
But BTC as "outside money" will have renewed interest in 2023, and we're entering historic buy range:
6/ On Stablecoins:
They represent 4/10 top crypto assets. Volumes are BIG, and stablecoin issuers *actually generate yield at the true risk-free rate of return* aka US treasuries.
Stablecoin legislation seems likely. Sky is the limit here, and that's good for DeFi applications.
7/ On Layer 1s:
The Merge happened, the software equivalent of the moon landing. Major derisking event for Ethereum (and economic catalyst).
Cosmos, Solana, Aptos/Sui, Polygon, Optimistic/zk Rollups, Avalanche...all made major progress!
Fees are also way down! Good UX!
8/ On DeFi:
We're two years into a secular bear market. DeFi has been in a deep winter, and faces technical headwinds (hacks) and reg challenges (DCCPA). BUT the primitives are here to stay.
AMMs, Flash Loans, Perps, NFTs, etc. are 0 to 1 innovations, and progress compounds.
9/ On NFTs:
NFTs are data wrappers. You can now transact any IP, synthetic asset, consumer digital good, identity token, etc. on chain. They look like toys to start, but they are almost unfathomably important as a technical primitive.
Short apes, long NFTs.
10/ On DAOs:
We have on-chain voting, delegation, liquid democracy, subDAOs, community treasury management, and rapid formation and wind downs of community organizations. BTC and ETH are in their 3rd innings, maybe.
But like NFTs & DeFi, we're in the first inning for DAOs.
11/ The frauds will rot in jail. The thieves will get their comeuppance. The trash will be taken to the dump.
But there are TENS OF BILLIONS in cash getting deployed into crypto's development, and all time highs in talent, potential, and opportunity.
Don't get discouraged.
LFG
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