Laughing @ Bill Gates 🎢
2y ago•
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Overview
GM and welcome to this week's CoinStats Scoop! 💫 In this week’s edition you’ll find:
Weekly market recap, including standout tokens & ecosystems
An overview & framework for crypto games integrating tokens & NFTs
“Sound Businesses” — ways to identify profitable & sustainable tokens/protocols
Crypto news, funding, and developments this week
The future of crypto gaming
Conclusion of the week with takeaways & things to watch
Before we get into our usual Market Overview, some important news. CoinStats has launched native in-app DeFi tracking! 🥳 🎉 With support for over 1000+ protocols and 10 chains, our native DeFi tracking update makes sure CoinStats app is the one and only crypto app you’ll ever need. CoinStats now natively tracks all crypto holdings, DeFi, CeFi, and NFTs for you so you’re always up-to-date. 🤑
Now let's move on to the market overview! As you can see, the market remained relatively flat this week as total crypto market cap fell 0.5% while BTC gained a modest 1.5% and ETH posted a slight 0.72% gain. As far as we know, green numbers, no matter how small, are always better than red. 🤑
As we’ve discussed in the last issues of CoinStats Scoop, macroeconomic factors unfortunately remain in control of crypto markets. However, this week may have provided a glimpse of crypto strength as the main U.S. stock indices QQQ (-2.8%) and SPY (-2.5%) endured another week of selling. For us in the crypto world, 2.5-2.8% loss seems like a walk in the park, but it only speaks of crypto’s relative strength. Typically, if the QQQ or SPY lose close to 3%, crypto is down anywhere from 10-20%.
So, flat markets may not be the most awe-inspiring thing you’ve ever seen, but the relative strength of crypto against essentially all other assets is something to note this week. Of course, the correlation could be lagging and crypto could sell off next week, but while macroeconomic data hangs on a week-by-week thread, crypto outperforming this week was admirable. Hopefully, the trend will continue as we enter Q4 of 2022. 🤯
Speaking of outperforming, there were several notable tokens that displayed strength this week while macro markets continued their downtrend, and crypto remained relatively flat. UNI (+11%), MKR (+11%), PYR (+13%), INJ (+8%), and XMON (+7%) showed the greatest strength this week while LINK & ATOM gave back some of their pre-conference profits (more on LINK & ATOM below). As usual, despite the flat-to-decreasing prices, the News & Developments section is chalk full of future crypto growth just beginning to plant its seeds! 🌱
News & Developments
Below are some of the most impactful announcements over the week that indicate crypto’s rising demand across a broad swath of institutions, protocols, corporations, and legacy companies. Announcements, interest, and product developments continue, planting seeds for the next bull run and wider crypto adoption.
Circle, USDC issuer, announces USDC will soon be available on ATOM, DOT, OP, NEAR, & Arbitrum along with debuting a cross-chain transfer protocol for native USDC swaps
Pantera Capital, one of crypto’s best venture funds, is looking to raise $1.25B for second crypto fund
Meta announces all users of Facebook & Instagram in United States are able to connect their wallets to display NFTs
Uniswap Labs, the creative team behind UNI, is raising $100-$200M @ $1B valuation
Robinhood confirms they’re launching a self-custody wallet for 10k waitlisted users that will have initial support Polygon (MATIC) with multiple networks supported in the future
Popular crypto derivatives exchange Deribit is raising funds @ $400M valuation
Recently bankrupt crypto lender Voyager to sell assets to FTX for $1.4B
DeFiance Capital plans to raise $100M for liquid token investments
Strike, infamous BTC Lightning Network focused payments firm, raises $80M
OpenSea launches support for ETH scaling L2 Optimism (OP) NFTs & partners with Warner Music Group for coming NFT drops
Sei, a new L1 blockchain that’s launching soon, announces their $50M ecosystem fund focused on DeFi protocols
BlackRock, world’s largest asset manager, launches iShares Blockchain Tech ETF in Europe
Famous ape hoodie CryptoPunk #2924 sells for 3.3k ETH ($4.4M)
Sustainable Tokenomics
One of the core learnings from this previous cycle revolves around token emissions, APY, unsustainable yield, and protocols that can sustain their token models. This week, Token Terminal tweeted the below image that examined protocols and tokens that are “sound” and profitable. The top protocols according to their metrics factor in four data points:
Fees — paid by end users for a service that the protocol provides
Revenue — fees collected by the protocol for the service they provide
Token Incentives — new token issuance (APY, yield, emissions, etc.) that attract users
Earnings — revenue minus any form of token incentives
It’s important to realize that this dashboard and other metrics like it are not a decisive factor of the fate of a protocol or token. Rather, the analysis highlights that proper tokenomics that balances strategies around protocols collecting fees and emitting tokens to attract users is a delicate balance! Of course we all remember the insanity that was DeFi summer and the days of protocol dashboards showing 5,6, and even 7 digit APYs 🤯
Whew, what a crazy time that was! We’ve all learned and moved on from those insane days, and the takeaways are some clear, observable metrics. Focus should be on protocols that are past the initial hyper-growth token-emission-heavy customer acquisition phase and are evaluated on their fundamentals. Another excellent site that clearly displays fees paid to the protocol, the best indicator of constant demand for the provided service, is cryptofees.info.
Speaking of profitability and fee generation, there were two top-25 tokens by market cap announce tokenomics upgrades this week. ATOM and LINK both announced future changes to their tokenomics at conferences this week as they look to add more value to their protocols and tokens.
LINK announced that token staking is coming in December along with two new protocol mechanisms BUILD and SCALE. The mechanisms allow Chainlink protocol to provide cheap data and oracle services to early-stage crypto projects in exchange for those protocols’ native tokens. LINK has not only established a diehard community that rallies around it (necessary for crypto success), but it also has committed devs behind it. Big rewards are coming for the community once updates are implemented in December.
Elsewhere in cryptoland, everyone’s favorite extraterrestrial token ATOM outlined tokenomics upgrades at its Cosmoverse conference. Similar to LINK, ATOM developers and ecosystem enthusiasts pushed forward initiatives that accrue more value to ATOM holders and stakers. ATOM’s tokenomics revamp focuses on adoption of liquid ATOM staking, issuance reduction to a constant over the next 36 months, and fee capture through mechanisms called Interchain Schedular & Interchain Allocator. The intricate details and finalization of both improvements to LINK & ATOM will be ironed out over the coming weeks, but what’s clear is that tokenomics revamps are focused on implementing sustainable business models. 🤑
Read of the Week
“Play-To-Own: A Web3 Gaming Thesis” — Defiance Capital
While it goes without saying that the entire article is worth a read, ultimately, the core thesis boils down to:
“Players are rewarded for their play and contributions with ownership of the game in form of tokens or in-game assets that give out sustainable rewards as a user acquisition strategy..in-game asset ownership should increase the total addressable market (TAM) of games significantly as players can pyschologically justify spending when asset values can grow and be sold to recover some residual value..everything online stems and grows from user-generated content (UGC)”
While the hype has outlived the practicality to date, gamified ecosystems such as AXIE and STEPN have shown the big potential of combining token incentives and NFTs. To date, crypto gaming ecosystems have relied too heavily on incentivizing users to choose their protocols without focusing on long-term sustainability! 🙄
Fortunately, as with many DeFi and other crypto protocols (such as ATOM & LINK), teams, developers, and investors alike are coming to realize the unsustainable nature of previous cycle token rewards. As such, there are numerous protocols building in the crypto gaming/NFT sector. The results should be coming to mainnet over the next 6-12 months. Defiance provides us an extremely useful framework for thinking through and analyzing these projects so we don’t make the same mistakes! 🔒Upwards and onwards, always!
Tweets & Memes
ETH price may be down, but issuance & fundamentals remain strong
The crab market of constant ranging continues, while bulls and bears battle it out!
A good reminder during down markets of how scary innovative technology is
Wrapping Up
Alright, with that amazing clip of Bill Gates being laughed at for explaining the future potential of the internet, we’ll conclude another edition of the CoinStats Scoop! 🍨 The obvious core takeaway of this week is the launch of our amazing in-app DeFi tracking. Jokes aside (but not really), we covered a ton of ground this time, with the core focus being on sustainable protocols/tokens and crypto gaming.
LINK & ATOM highlighted the importance of proper tokenomics and value accrual as excitement built around the conferences where they added to the future value of their tokens by prioritizing sustainable mechanisms. We also covered and outlined the future confluence of crypto gaming, tokens, and NFTs before reading about how to properly build GameFi ecosystems with sustainable token models. 🔒
As usual, CoinStats will continue to guide you through the world of crypto and DeFi. We’ll see you for another edition of CoinStats Scoop next week!
2y ago•
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