The L1 incentive war happening in crypto reminds me of the landgrab situation taking place with US online sports betting.
For the first time, we are seeing strong activity take place outside of ETH leaving some to question who the LT winner will be.
Here are my thoughts👇
Here are the parallels between the current smart contract wars and US OSB mkt:
1) Massive TAM with large greenfield
2) Market structure where share accrues to top 3 players
3) Both in landgrab situation where competitors are burning tons of $$ to win share
Below is a chart of price action for $DKNG (Draftkings), an American daily fantasy sports contest and sports betting operator.
The DKNG story will likely somewhat resemble what will happen for the fundamentals of ETH as these contract wars progress.
Allow me to explain.
When investors realized US sports betting was going to be a real market, $DKNG was a favorite pick given:
1) Strong top of funnel given dominant position in fantasy sports
2) Strong brand & great UX
3) Clean business model (less important)
This explains the parabolic move
Between early to mid 2021 the story changed, other competitors like BetMGM really stepped up on their discount programs & marketing to bootstrap their own platforms.
Investors sold DKNG as they lost market share and the space overall was more competitive.
Had you done the work you would have had conviction to hold on and add.
Investors realized after talking to C level executives that BetMGM incentives were not sustainable and that the executives claimed that users always went back to the platform with best UX and mindshare.
DKNG now looks like it is ready to take off again and is ready for the next leg.
While the idea of "ease of use" and UX is very subjective, here is what I will say for ETH.
On the developer side, I will say Solidity has now become a standard for the industry so switching costs are high.
On the user end, while throughput and costs could be better, I would argue the interface experience for apps and tools available on ETH are well ahead of others making the UX better than the others.
Example is Solana Raydium copies interface of Sushiswap.
ETH also has 90%+ market share.
It is very rare for something to have 90%+ market share and not be a top player in the LT, just look at Microsoft.
The only way would be if ETH was structurally challenged, which is not the case.
Therefore, I do not see these incentive programs as challenging ETH's number 1 position in the market place LT.
The developer mindshare & network effects is too strong for ETH and will allow them to continually win majority of new developers coming into the space.
That being said, the spot for number 2 is still wide open.
The next in lines will probably be something like Solana or Cosmos.
Here is how market share could shakeout LT:
ETH = 60%
SOL or Cosmos = 25%
Other = 15%
So what does this mean for making money?
I know that is why you are here.
My 2 cents:
1) $ETH = stable compounder for rest of cycle
2) $SOL = Best R/R asset in crypto given catch up trade to ETH in bull mkt and has best marketing
3) Take adv. of these incentive programs as they provide amazing rotation oppt. with lots of upside; ape accordingly
• • •
Missing some Tweet in this thread? You can try to
force a refresh
Came across a very interesting project recently that reminded me of @OlympusDAO back when it was $30mm mkt cap.
Chart looks prime, now is the $TIME anon.
This is an easy 3x at the minimum from here.
Some quick thoughts 👇
As you all know, making a non-pegged stable coin project come to fruition is difficult.
@OlympusDAO was able to succeed because it was able to attract a strong community early on where everyone believed in (3,3) Zeus was also a god figure which helped.
Wonderland is an experimental fork of Olympus on AVAX with more aggressive treasury mgmt.
The project is founded by @danielesesta (giga brain) from Abracadabra & Popsicle.
To bootstrap the project, Wonderland will donate 30% of rebase fees to Olympus as a sacrifice to the gods
$PENDLE just announced some massive changes to the protocol, which I expect to drive material fundamental growth for the protocol over the coming months.
Interest rate derivatives is an untapped market in DeFi and there is continuous innovation happening here.
👇 to learn more.
Here is a quick recap on @pendle_fi in case you forgot.