Thread by @reganbozman

Why is this cycle cooked? Why is everyone miserable?

We can distill all of our problems down to the fact that retail can no longer make real money in the current market structure

1/ Some jumbled thoughts on returning to our roots and unfucking the current cycle

2/ The answer to why retail isn't here this cycle is so utterly simple

It's because there are no more 500x's in 'trad' crypto markets like infra tokens

And there is now a more fun casino, with better memes, right around the corner

https://x.com/reganbozman/status/1781333520037913033

3/ We are literally recreating what has happened in VC/IPO markets where companies have been staying private longer, which means more upside stays 'private' (eg to VC funds) and is inaccessible to retail

4/ Crypto had been reversing this and democratizing access to asymmetric upside

But not any more!

L1's and L2's raising WAY more money from VC's
No public token sales
VC's make money
Retail gets shafted

Maybe retail's disillusionment with this cycle isn't so surprising

5/ A big reason companies have been staying private longer is that VC's have 5x more money than they did a decade ago

Companies can now raise $1B+ in private markets and not deal with the overhead of public markets

6/ Unsurprisingly the same trend has happened in crypto venture - there is way more money in crypto venture funds than there was five years ago

7/ Crypto was supposed to fix this!

ICO's set out to democratize capital formation, and by extension access to venture returns

They absolutely succeeded in doing this**

**unless you are blessed with a US passport

8/ ETH was 30 cents at the ICO in 2014 and is $3000 today

That is a 10,000X return in 10 years and would hands down beat any VC investment over that timeframe

Anyone on earth could participate and that is fucking awesome

9/ Now the industry clearly grew and so entry prices naturally crept up but those opportunities did not go away

The $SOL launch in 2020 was at $0.22 and at a $140 price that is a 636x return in 4 years

That also probably beats nearly every VC return over the last five years

10/ This cycle we have moved away from this market structure

There are now close to zero opportunities for retail to buy tokens pre-launch or buy them at low prices on public markets

https://x.com/reganbozman/status/1781333566863147207

11/ Airdrops are absolutely an improvement from the existing venture paradigm where early users get zero financial upside

But they are a worse financial deal than token sales - you can definitionally only make so much money on airdrops

https://x.com/reganbozman/status/1781333676753904043

12/ We have moved from an uncapped upside market to a capped one - that is a HUGE deal

$1K in SOL ICO is now $636K
$1K in Eigen is like $1030....even if it 10x's, that's only $1300

Last cycle you controlled your own destiny

This cycle you're waiting for Daddy Eigen's handout

13/ Financial nihilism means acknowledging that these markets have always been about money

Yes that money funds tech but it's the money that drives the whole thing

Kneecap the money part, and the wheels come off

https://x.com/Travis_Kling/status/1764696621097378299

14/ There are a handful of things we can do to improve the current launch structure

It all really comes down to creating uncapped upside for early users and community

https://x.com/reganbozman/status/1781333683473109276

15/ That said, there are bigger structural issues in the market

Massive raises for these L1's and L2's which lead to multi-billion dollar valuations pre-launch

This creates two issues

(A) Tons of sell side pressure
(B) Creates a floor on launch FDV

16/ IMO a big part of structural issue with most alts this cycle is that VC sell pressure has not been offset with retail inflows

If you raise $500M pre-launch, that is $500M of eventual sell pressure (and even more notionally if token goes up)

https://x.com/reganbozman/status/1780688748755484885

17/ Raising money at a high FDV privately means you will try to go out of the gate at an even higher FDV

This can lead to down only situations

https://x.com/reganbozman/status/1781333528430723498

18/ The VC<>Retail relationship does not need to be antagonistic

*Everyone* made money on SOL

https://x.com/reganbozman/status/1781333602871243002

19/ But if you try to jam too many venture dollars into markets that are just not that liquid, that becomes harder

And if you remove the uncapped upside for the market participants who matter most, that becomes close to impossible

20/ We can point fingers and argue about meme coins, but that absolutely misses the point

Meme coins are not the problem - our current market structure is

Here's to unfucking our current market and going back to our democratic roots🥂