I read the 168 page report by @MessariCrypto x @twobitidiot. He covers a wide variety of topics ranging from DeFi, NFTs to stablecoins and privacy. Here's my top 15 takeaways:
P.S. It's a great holiday-read and you should definitely read the report for yourself.
P.S. It's a great holiday-read and you should definitely read the report for yourself.
1. Crypto is inevitable
Over the years, the industry has grown and significant progress have been built out of Bitcoin, stablecoins, distributed computing, scalability and DeFi... "these innovations will not be uninvented".
Over the years, the industry has grown and significant progress have been built out of Bitcoin, stablecoins, distributed computing, scalability and DeFi... "these innovations will not be uninvented".
2. Bear marketing is for building
In 2018, dapps and DeFi (Opensea, Uniswap, USDC etc) were incubated during crypto winter. In 2022, you need to focus on the "biggest problems" to spot sectors that will spawn the next unicorns. Some of these to-be-disrupted sectors are:
In 2018, dapps and DeFi (Opensea, Uniswap, USDC etc) were incubated during crypto winter. In 2022, you need to focus on the "biggest problems" to spot sectors that will spawn the next unicorns. Some of these to-be-disrupted sectors are:
- PoR, on-chain monitoring and crypto GAAP accounting infrastructures
- Exploits and hacks
- Weakness in over-collat. finance vs Tradfi's fractional reserves model
- Resistance against big tech (AAPL, GOOGL, AMZN), decentralized app stores, marketplaces, networks
- Exploits and hacks
- Weakness in over-collat. finance vs Tradfi's fractional reserves model
- Resistance against big tech (AAPL, GOOGL, AMZN), decentralized app stores, marketplaces, networks
3. Fundamentals will matter more
Unlike the last cycle, we now have the tools to fairly value projects/protocols similar to TradFi (GAAP or IFRS standard). The next cycle will be driven by *real* usage and profitability.
Unlike the last cycle, we now have the tools to fairly value projects/protocols similar to TradFi (GAAP or IFRS standard). The next cycle will be driven by *real* usage and profitability.
4. 2023 Market *should* be bearish
- Central banks will continue to tighten
- BTC miners capitulating
- L1 & DeFi (treasuries, early backers) forced to sell due to bankrupt funds, poor tokenomics and economic death spirals
- Central banks will continue to tighten
- BTC miners capitulating
- L1 & DeFi (treasuries, early backers) forced to sell due to bankrupt funds, poor tokenomics and economic death spirals
5. Top 10 people to watch
1. @cz_binance
2. @brianarmstrong
3. @PatrickMcHenry
4. @sheila_warren
5. @AutismCapital
6. @molly0xFFF
7. @aeyakovenko
8. @BarrySilbert
9. @cameron
10. @tyler
1. @cz_binance
2. @brianarmstrong
3. @PatrickMcHenry
4. @sheila_warren
5. @AutismCapital
6. @molly0xFFF
7. @aeyakovenko
8. @BarrySilbert
9. @cameron
10. @tyler
6. DCG & Genesis contagion risk
The most important trend to keep an eye on in early 2023. DCG and Genesis Capital was a large counterparty to 3AC and FTX.
Genesis is seeking 1B loan from DCG while more than 2B in assets are frozen at Genesis, whose primary borrower is DCG.
The most important trend to keep an eye on in early 2023. DCG and Genesis Capital was a large counterparty to 3AC and FTX.
Genesis is seeking 1B loan from DCG while more than 2B in assets are frozen at Genesis, whose primary borrower is DCG.
7. Cloud infrastructure remains centralized
Technical and economical barriers prevent the average crypto investor from solo-staking or mining; instead, most usually delegate. As of Sept 2022, 50-60% of $SOL and $ETH validators were located in either Germany or the U.S.
Technical and economical barriers prevent the average crypto investor from solo-staking or mining; instead, most usually delegate. As of Sept 2022, 50-60% of $SOL and $ETH validators were located in either Germany or the U.S.
8. Regulations
2023 could be transformational for crypto in terms of permanent law. We should get exchange oversight clarity, stablecoin regulations and set standards for disclosures & consumer protections. Here's a thread worth reading by @twobitidiot:
2023 could be transformational for crypto in terms of permanent law. We should get exchange oversight clarity, stablecoin regulations and set standards for disclosures & consumer protections. Here's a thread worth reading by @twobitidiot:
https://twitter.com/twobitidiot/status/1588546400304107520?s=20&t=r_TlY1WJ_CYSnA3WcbiHtA
9. Privacy vs transparency
Privacy preserving tech is seen in a negative light. How can we keep authorities at bay? We need better acceptance otherwise apps such as Tornado Cash will continue to have high risks. There may be opportunities for private-by-default networks...
Privacy preserving tech is seen in a negative light. How can we keep authorities at bay? We need better acceptance otherwise apps such as Tornado Cash will continue to have high risks. There may be opportunities for private-by-default networks...
such as Monero and Zcash, as well as privacy-focused Layer-2 scaling solutions. (Author writes about Aztec but I'm bullish on $ROSE and $ALGO). Ethereum won't solve base layer, end-to-end privacy for many years (if ever).
https://twitter.com/KimchiBlock/status/1605971573294264320?s=20&t=r_TlY1WJ_CYSnA3WcbiHtA
10. Stablecoins
Crypto has a huge lead over CBDC averaging $900B USD-pegged stablecoin transactions per mo which is equiv. to what the Fedwire services do in a year. The crypto industry needs to not "fumble" and continue to out-innovate CBDCs as they are dystopian at best.
Crypto has a huge lead over CBDC averaging $900B USD-pegged stablecoin transactions per mo which is equiv. to what the Fedwire services do in a year. The crypto industry needs to not "fumble" and continue to out-innovate CBDCs as they are dystopian at best.
11. DeFi headwinds
DeFi is currently sitting at ATLs vs $ETH. The author is bullish on DeFi for 2023. TAM for DeFi is massive; the global financial services is valued at $23T. We are early.
DeFi is currently sitting at ATLs vs $ETH. The author is bullish on DeFi for 2023. TAM for DeFi is massive; the global financial services is valued at $23T. We are early.
12. NFT 2022
NFT market cap currently sits at $7.5-10B with 2/3 of that coming from PFP collections such as Bored Apes and Crypto Punks.
Many brands launched their own NFTs but very few of them maintained their value.
NFTs are becoming consumables, not investments.
NFT market cap currently sits at $7.5-10B with 2/3 of that coming from PFP collections such as Bored Apes and Crypto Punks.
Many brands launched their own NFTs but very few of them maintained their value.
NFTs are becoming consumables, not investments.
13. GameFi /P2E / Decentralized Socials
Most P2E games aren't fun (was @AxieInfinity fun?) and this sector is over-hyped. AAA games require massive funding and development times; we just don't have it yet.
DeSoc however, is a perfect industry to be disrupted from web2 to 3.
Most P2E games aren't fun (was @AxieInfinity fun?) and this sector is over-hyped. AAA games require massive funding and development times; we just don't have it yet.
DeSoc however, is a perfect industry to be disrupted from web2 to 3.
14. DePIN: Decentralized Physical Infrastructure Networks help boostrap networks of physical hardware. Think file storage, wireless access and cloud computing. Big opportunity against the Big Tech and Government censorship. Demand for DePIN is growing linearly.
15. Lastly, bonus tips by @twobitidiot
1. Read Shoe Dog (I loved it too)
2. Get better at writing
3. Be grateful and stay humble!
"I don't know what I'm doing and neither do you".
1. Read Shoe Dog (I loved it too)
2. Get better at writing
3. Be grateful and stay humble!
"I don't know what I'm doing and neither do you".
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