Thread by @mrjasonchoi

Not everything will last in crypto.

Quick thoughts on the fallout of a bear market:

1/ All bubbles begin with a nugget of truth.

Crypto's many developments planted the seeds for a historic bull market since 2020, catalyzed by an easy monetary environment.

However, many things in crypto are *enabled by* a bull market.

Here are some of them.

2/ The first thing: DeFi yields.

DeFi summer 2020 was a bacchanalia of literal money-printing. Majority of DeFi use cases surround leverage - the demand for which grew because of a bull market.

As with all parties, there came a time to foot the bill.

3/ It didn't take a bear market to reveal there just weren't enough buyers to support inflationary shitcoins minted out of thin air to finance high yields.

Imho the future of DeFi will require yields that do not require self-referential ponzinomics - but real world demand.

4/ They will be lower than what DeFi apes want, but they will be more sustainable and higher than what you can get from your bank, i.e. 5%-20%.

Projects that are heading in this direction are @maplefinance $MPL and @goldfinch_fi $GFI

More are on the way.

5/ The next to go might be unsustainable P2E economies.

The bull market lifted demand for NFTs and in-game tokens alike.

This created profitable opportunities for players and spawned an entire new economy - that of guilds and scholars.

6/ The flagbearer for this is @AxieInfinity

Many who missed $AXS early on often pontificate on $SLP collapsing in a bear market (which is correct currently) and Axie imploding (so far, user growth has only stalled).

I personally don't think @AxieInfinity is going anywhere.

7/ With $150M in their warchest and as the pioneering company in the space, I'm confident @AxieInfinity will surprise us with its next iteration.

However, I do not have the same confidence for most of the dozens of Axie clones that emerged over the past 6 months.

8/ Without the impetus of a bull market, P2E games will become less profitable than they are today.

If the financial proposition of P2E games begin to dim, it must make up for it by having fun-parity with popular Web 2 games, especially if they are to command unicorn valuations.

9/ We already see examples of this via our venture investments - @decimated_game $DIO , @illuviumio $ILV and many more recognize that Axie's miracle is likely an anomaly, not the playbook.

They chose to prioritize gameplay first - economics second.

10/ Their token prices notwithstanding, I think gameplay-first games have a better shot at secular user growth than Axie-clones.

But this won't be easy - many underestimate the budget required to build triple A games (GTA V *alone* cost $100M)!

11/ Thread getting long but will leave with a few more food for thought on things that I don't think will last:

- The current model for guild-run scholarships
- Fervor for DAO tooling
- Marginally improved versions of DeFi incumbents
- L1s with no massive treasury

12/ ps I think the more pertinent question for aspiring founders and investors now is what *won’t* change in crypto in 12-24 months

What kinds of projects or businesses are not wholly dependent on a constant state of up only?