Solana now rivals Ethereum across nearly every key metric.

Yet $SOL trades at just 33% the valuation of $ETH.

Our Solana Thesis Part II: The Data-Driven Case for $SOL.

1/ In Q4’23 Syncracy released a Solana thesis arguing that SOL was severely mispriced at 13% of Ethereum’s valuation.

Today we explore how the thesis has progressed, unpack Solana’s growing network effects, and make the case for parity with ETH.

syncracy.io/writing/solana…

Applications on Ethereum and Solana are on the verge of flipping their underlying infrastructure in revenue.

What does this mean for the future of value capture in the cryptoeconomy? Contrary to popular belief, the age of the applications is upon us.

There are now plenty of apps generating 8-9 figures in revenue.

Still, apps continue to trade at huge discounts to infrastructure, which on average trade at ~300x higher multiples.

syncracy.io/writing/applic…

The era of brain dead private → public token arbitrage is coming to an end.

We simply don’t need more useless infra + tokens while there’s clear secular winners emerging across the cryptoeconomy.

In time the market structure will shift to reflect this.

The frontier is liquid. Venture strategies will still thrive, but returns will be harder won.

The dispersion of returns between the best and worst will likely increase from here.

Over the past year Syncracy accumulated a large position in MKR.

We believe Maker could command a $40+ billion valuation this cycle given its vital role in financing Ethereum’s economy — a multi-billion dollar fee opportunity.

Our thesis on Maker in the Endgame Era.

1/ Maker is the leading decentralized bank in the cryptoeconomy.

At ~2x 2025E revenue, we believe Maker is one of the best risk / reward opportunities today given its industry leading earnings, best-in-class unit economics, and growing market dominance. 

syncracy.io/writing/makerd…

Memecoin mania is the closest thing we’ve seen to the 2017 ICO bubble.

Difference is no one is even pretending they’re launching or buying anything valuable — bar is as low as it’s ever been.

Memecoins are the purest expression of greed and entertainment crypto’s ever created. Equally as interesting is how much mindshare memecoins command despite the sector still being incredibly small (and retail).

Most memecoins are micro / small caps, yet are reported on as if they’re actually indicative of what’s going on in the broader cryptoeconomy.

In Q2 2023, Syncracy built a large position in SOL.

The opportunity Solana offers is rare – a truly differentiated technical architecture that has the potential to become foundational alongside Bitcoin and Ethereum.

Our thesis on Solana and the future of the cryptoeconomy.

1/ Blockchains have trade-offs.

Despite extreme power law dynamics in the smart contract platform market, this reality creates a large opportunity for Solana.

Solana can eat Ethereum's dominance through offering a highly differentiated integrated solution.

syncracy.io/writing/solana…

In 2022 a nuclear bomb hit the cryptoeconomy — where do we go from here?

A year’s worth of thoughts and reflections on the past, present, and future of crypto.

syncracy.io/writing/writin… Special thanks to @SyncracyCapital team as well as @riabhutoria, @jonmoore202, and @divine_economy for review and conversations that shaped this essay.

Excited to share Pangea Fund Management is rebranding to Syncracy Capital.

@SyncracyCapital is in an incredible position after being extremely conservative in 2022.

2023 will likely be a generational environment for convicted long-term buyers and we are ready to capitalize.

1/ What does Syncracy mean?

Syncracy is our ultimate thesis on the paradigm shift brought by blockchains — global governance by transparent, impartial, autonomous code.

It is a conjunction of “sync,” meaning working together harmoniously, and “cracy,” a suffix for governance.

What do you estimate the chances we never see BTC above $69K again?

i.e BTC at a $1.3 trillion market capitalization was the terminal top. I’m suprised more people haven’t entertained the thought that BTC mooning to $1.3 trillion during the everything bubble might’ve possibly been it.

As much as I’d like to write threads about what happened or what will happen following Terra’s collapse, all I can do is just feel sad at the absolute carnage.

Dark day for the industry, but hopefully the beginning of a new era towards more sustainable mechanism design. It’s always easy to discount tail risk in bull markets.

Not just for markets, but also in how we build decentralized economic infrastructure.

Excited to announce Pangea Fund Management!

@PangeaFundMgmt is a thesis driven hedge making high conviction, concentrated investments in the secular winners of the cryptoeconomy.

Our thesis.

1/
bloomberg.com/news/articles/… Crypto public markets offer the greatest investment opportunity across any asset class over the next decade.

Yet today it is underserved by liquid managers built for the industry’s next leg of growth as it’s leading projects scale from 1 to 100.

When you really think about it, has there ever been a successful fork?

Like one that credibly challenges the protocol it forked off of for dominance? ETH I don’t think is a good example because what we call Ethereum today was the majority fork

Really think you can just buy a concentrated basket of leading decentralized stablecoin protocols, close your eyes, and wake up rich in a decade.

These will be DeFi’s aggregators as they build massive on-chain balance sheets and become the industrys dominant liquidity providers. Take a look at your favorite DeFi liquidity protocol.

In all cases LPs capture the majority of fees generated by the protocol.

What do you think this implies for value accrual if stablecoin projects become DeFi’s dominant liquidity providers?

This is the end game for PCV.

The idea of L1s accruing value from fee generation is convoluted by the circular logic of them generating fees in currencies they issue.

The only economic frameworks that make sense for understanding the native assets of L1s are that of commodities or currencies. Building a currency is an unnecessary undertaking for most blockchains (inclusive of L1s, L2s, app-chain, etc).

Many would be better off having their validators accept fees paid in external assets which have more credibility and reliability as currencies (BTC, ETH, stablecoins).

Remember when the idea of DAOs used be something more akin to an institutional robot? - i.e a decentralized software automously governing an economic domain.

Now we just have individuals manually governing a treasury through a multisig, using telegram and discord for discourse. The easy response to this is “oh we’re just early”

But I can’t help but think the original vision of DAOs is an afterthought for many now (if the people building DAOs today even know the OG vision at).

The way I see it, cryptocurrencies have two paths to reach reserve currency status.

Either challenge nation states head-on for monetary supremacy like Bitcoin, or grow your own digital economy until it surpasses those of the dominant sovereign powers like Ethereum.

1/ The former is difficult if you’re competing with fiat currencies head on, but promising if you’re challenging gold.

Yes, the case for apolitical SoVs continues to grow with monetary and financial deplatforming rising (ex: Russia and Canada), and an increasingly multipolar world.

https://twitter.com/balajis/status/1499437302115803169

The ability to exit your country’s economy through public blockchains is powerful, but this industry would fare far better rhetorically if we spent less time emphasizing the case for exiting your country’s economy and more time emphasizing the case for entering the cryptoeconomy. The pitch around exiting is mostly a legacy of the the early Bitcoin community.

Bitcoin was and still is viewed as a defensive technology individuals use to protect themselves from overreach.

What’s the most compelling argument for why land in the metaverse needs to be scarce?

It seems like an unnecessary assumption you get from mapping the metaverse to the physical world far too rigidly. The biggest challenge with creating land scarcity at genesis is that it attracts speculators and produces a class of landowners that have no plans to build anything in the virtual world, but profit from all the late entrants that actually do create value.

There's a reason MakerDAO remains the king of decentralized stablecoins on Ethereum.

The goal of a decentralized stablecoin is to be stable, reliable, and resistant to capture - the stuff that is boring in a bull market, but all that matters in the long-run. Many DeFi investors being reminded today of the cruel realities of counterparty risk.

Remember DeFi is supposed to reduce counterparty risk through decentralization.

The current state of NFTs suck.

For an industry that preaches democracy and accessibility it’s ironic the most celebrated projects are predicated on exclusivity and luxury.

Frustrating onboarding new people into Web 3 only to inform them the price of entry is a year’s income. Those of us who’ve rode this market up the past 2 years have been lucky enough to get into these projects early if not buy them outright.

But those getting in the game today often can’t even play due to high barriers to entry or worse buy garbage because due to affordability.

Seeing all these parabolas completely reverse yet again is a testament to why even if you are a fundamentals focused investor you must consult charts before entering a position.

Nothing worse than buying the best asset but still getting obliterated due to a poor entry. I used to think technical analysis was voodoo magic and that as a long-term fundamentals investor you could just ignore it.

Couldn’t have been more wrong.