15 Things I’m Reading
First up on the list, the king decides to start gaining some serious momentum by talking about the next phase of their growth. Wormhole (cross-chain bridging) and D3M (deposit directly to other protocols) coupled with real-world assets (bit skeptical on this one), will lead Maker to some new heights. It’s hard not to be in awe of the scale and ambition that you see in this thread.
The tone around liquidity mining is becoming even rougher than before. This tweet from Dan Robinson succinctly highlights the biggest danger that you run with running such a scheme: you never actually find true product-market fit. In the comments, the other curse is having users use your product with the expectation of a retroactive airdrop which is also pretty terrible. Being honest with yourself is hard in crypto when the incentive to not do so in the short term is high. However anyone who has made generational wealth knows, it’s always the long term that matters.
As a natural extension of the above tweet, we see the other dark side of pumping a token with liquidity mining: what happens when the money runs out? Turning off the tap is hard because all the features are incremental at best, so differentiating outside of free money is a challenge. DEXs, lending and yield optimisers are all in a similar spot for everything outside of the top 2-3 protocols.
Is the stablecoin market over for newer entrants? Maybe, maybe not. However it’s hard to see how anything outside of USDC, USDT and DAI getting solid traction. Yes UST is up there but we’ll need to see how it sustains over a longer time horizon without artificially high yield promises to really understand its staying power. Every new crypto participant needs to be rekt by one stablecoin project before they learn. Maybe just every cycle you have a new algo stable that’s meant to rinse the new class out of their money and teach them the same lesson every previous generation learned the hard way...
Okay so I’ll be honest, I still haven’t had enough time or bandwidth to go deep into Layer Zero but it’s right up there in terms of things that I’m highly interested in learning about. This thread seems to be a good breakdown if you’re keen on going deeper. I’ll do a write up in a few weeks on this though.
I wasn’t sure how Optimism was tracking until this tweet came out... wow. $150m is pretty solid Layer 1 kind of money. Once Optimism launches a token they have a real shot of competing with solid incentives and an organic ecosystem behind them. That being said, the FDV is going to be incredibly high and ensuring that early users and ecosystem partners are well incentivised is going to be crucial for the long term success because otherwise it’ll just be private investors + team that will reap the most from the token launch.
I don’t like larping about tokens that go down, although SPELL deserves a bit of a call out here given that the majority of Crypto Twitter was 100% convinced they’d overthrow MakerDAO at the peak while being blind-sided about the ridiculous amounts of liquidity mining going on simultaneously. This chart is the way it is because there is excessive supply that is on the market that no one wants to touch. Demand drivers are hard to catalyse for a token.
NFTs, The Metaverse, Holograms, Avatars — they’re all converging. The video in this tweet is a great example of how immersive NFTs are going to be and how JPEGs are just the start and probably not even 1% of what we can do. This below is the future that I’m down to sign up for and invest in. The design space of NFTs is tremendous.
This tweet got me thinking more about what the future of work and resumes might be and it occurred that we’re seeing this happen before our eyes.
As more things are done on-chain or tied to a Web3 address, signalling has less value since the actual proof of work is very easy to see and inspect. Exciting times.
In case you weren’t super plugged in, something that slipped the headlines was Binance raising/raised at a $300b valuation. Yes, you read that right. I honestly have no idea how it would ever float at that valuation or if it’s really even worth that much. Still ludicrous to see.
A great follow-up write-up from the above is from Tyler. Why would a CEX be worth that much when their future is bleak and the path to liquidity is questionable. Who knows. Crypto Private markets are a whole new beast all together but seem like they’re going to be heading for a reckoning at some stage.
Speaking of crazy raises, we have another contender: Metamask and Consensys. I’d say the case here is slightly stronger but still, these valuations aren’t a joke by any means. A $7b valuation, up from $3.5b just a few months ago. Idk man, feels frothy to me.
I’m not sure what this image is meant to be but I guess it looks kind of dank haha? TLDR is that Maker is getting more aggressive about adding more recursive collateral types. This one is the LP share for stETH in Curve which has a few billion in TVL. Once a DeFi protocol ach