Zero to One
Gm, and sorry for taking tax week off!
One of our writers and OG Bitcoiner, Gaurav Patel, has made the bold claim over the last month or so that this crypto bull run has been one of sustaining innovation, as opposed to disruptive innovation, and this may signify a lack of strength when compared to previous cycles.
One of the key markers here is the memecoin frenzy, which Gaurav has repeatedly referred to as “a pervasive Nihilism-Hedonism regime that [he] has only seen in the days before the Dot Com mania peak”.
And while I see his point when it comes to memecoins, I think it’s quite possible we get surprised by mass adoption of a few disruptive innovations that have been in the works for a while now, and that in retrospect, we look at some of these as having defined this cycle’s bull market.
Could the memecoin noise be masking some truly pivotal technical breakthroughs?
Here’s a couple I’ve been thinking about this week.
Wallet UX
One-click wallet creation is here.
We got a taste of the power of a simple onboarding process when friend.tech became the first touchpoint for many web2 influencers who had not previously dealt with web3 or crypto, all within the span of about two months. The platform has now seen over 800,000 users buy keys, and this was largely in part due to the simplicity of the onboarding process with Privy.
I recently tried out Coinbase’s Smart Wallet demo, which uses a passkey to generate or access your wallet, and was impressed. The simplicity actually made me uneasy 😅 No keys, no password, no chain info, no need to download an extension. I’m not making the case that this is for everyone, but talk about low friction!
In my opinion, with account abstraction and some of the new wallet libraries out there, the likelihood of a blockchain app going mainstream just went up by an order of magnitude.
Building on Bitcoin
A trillion dollars is “locked” in the Bitcoin network. Instead of banking on new inflows, what would happen if this could flow more freely?
While most of the recent Bitcoin “L2s” (sidechains) are likely vaporware, it looks likely that Bitcoin builders figure out sufficiently-secure, Turing-complete L2s—if not by piecing together existing opcodes, then by activism with new opcodes or through safer bridging models.
As dormant Bitcoin whales start buying Runes, it is becoming clear that allowing Bitcoin holders to vote with their money on more productive applications could be a game changer.
The Stacks Nakamoto upgrade will enable fast blocks and a trustless two-way Bitcoin peg, and Stacks’ TVL is worth keeping an eye on as it rolls out.
An Emerging Reputation Layer
Morpho Blue, a new peer-to-pool lending protocol, recently surprised many with its quick growth, especially given the simplicity of the protocol. The simplicity of the underlying markets is possible due to Metamorpho, a risk curation layer that provides lenders with a simple way to earn interest without conducting the risk management themselves.
Notable here is the reputation layer that is emerging with market curation.
Firms like Gauntlet and SparkDAO are leveraging their reputation in risk management to provide services to permissionless vaults, which is pretty cool.
This type of centralized-decentralized collaboration is something we didn’t see much of in prior cycles, and could lead to some unexpected use cases.
And that’s it. The above are just a taste of some of the potentially pivotal things that are happening right now in crypto. What other trends are going relatively unnoticed that might lead to mass adoption of new crypto apps?
And a big thanks to our sponsor Size, building a DeFi lending marketplace with unified liquidity across maturities. Coming soon!
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