My key takeaways from Messari’s “Crypto theses for 2022”
If you’re overthinking, write; if you’re underthinking, read ~anonymous
Firstly, I would like to express all my gratitude to Messari for all the research they do and especially this report that took me days to read, but was definitely worth it 🤠.
There is plethora of knowledge and opinion in the report but I try to note here only the points that I consider to be helpful in planning my crypto journey for the year 2022 (and trading too… maybe). None of this is financial advice🤾🏻♂️; 23 year old are not advisors though 🤹🏻♂️.
Starting with BTC to get done with it ASAP 🤼♂️:
total BTC locked in ETF-like vehicles will remain less than 10% of outstanding bitcoin supply in the next five years. As other large institutions build positions, the smart ones will go for direct exposure, and lower fees
On NFTs
NFT tooling is still missing and its core infrastructure will be one of the hottest areas of investment in 2022
IDK if this has any monetary advantage, but L1's and L2’s have rocked 2021 Q4 as well as 2022 Q1 (SYSsssss ),
…we won’t have hundreds of L0/L1/L2 standards. As Ramshreyas wrote in a recent Pro piece, major tech platforms tend to trend towards duopolies.
The author supports the arguments using the following table as an example:
Even if Ethereum manages to hold off its largest non-EVM rivals, it will leak value to the rollup chains it leans on for scalability. ETH sits at ~60% market cap dominance among Layer 1s. That will either fall below 50% in 2022, or its Layer 2 rollup tokens will eat into its growth. Maybe both.
On ATOM and the interchain thesis,
Erik Voorhees laid out the multi-chain narrative evolution of the top platforms nicely:
Ethereum Q1: defi, decentralized, but kinda slow and very expensive
BSC Q2: defi, not decentralized, but quite fast and cheap
Solana Q3: defi, kinda decentralized, very fast and cheap
Cosmos/IBC Q4: defi, decentralized, fast and cheap
On LUNA (,UST, MIRROR protocol & ANCHOR protocol) with ANCHOR being among the most profitable savings DeFi bank and providing an 20% APY on its stablecoin UST; mind-blowing 🤯.
Terra’s application ecosystem has exploded this year. Its partnership with South Korean payment app Chai brings Terra to 2.3 million users, Terra’s algorithmic stablecoin UST has gone from $0 to $7.2bn in its first year and may soon overtake Maker’s Dai in market cap. Synthetic stock application Mirror counts $1.5bn in locked value, just shy of Synthetix’s $2.1bn. Terra’s Anchor protocol has locked nearly as much LUNA ($4bn) as Ethereum’s Lido has ETH ($6bn)…. That’s why I remain bullish on Terra’s long-term potential. Terra’s stablecoin potential alone gives the project a massive TAM.
Not to forget RUNE here:
Cross-blockchain bridge protocols like Rune will unlock more peer-to-peer swaps
On Ethereum scaling zk-rollups (LRC:loopring — the only rollup with a coin right now, IMX:ImmutableX, DYDX:dYdX):
Vitalik thinks that ZK Rollups will process the vast majority of Ethereum transactions long-term. They may also upend the thesis for alternative L1s. The most innovative tech in crypto hasn’t widely impacted the markets yet, but that may change with StarkEx and zkSync. … Loopring, Immutable X, and dYdX are early adopters, but don’t expect their success to lead to a rush for ZK rollups just yet: they aren’t fully EVM compatible and require some customisation to hop between the L1 and other L2s
Some predictions to look out for 👀 — need to keep an eye on these bridge volumes:
Prediction: the most popular L1 L2 / L1 L1 / L2 L2 bridge protocols will have higher daily volumes than the most popular centralized exchange within five years
Treasury management needs a revamp too; I am having a problem tracking these volumes real-time:
Instead of impatiently waiting for quarterly earnings reports, protocol statements will be dynamic documents powered by live feeds of data streaming directly from the blockchain. All the pieces are ready to be assembled, now it’s time to build.
CEXs have their token too 😶🌫️ (bullish for FTT ?)
If Web3 makes everyone an investor, then FTX et al wants to own the internet scale exchange. At least one of them will realize that vision. By 2030, we’ll see a trillion dollar crypto exchange
and Web3 (OCEAN & LIVEPEER)
In Web3, protocols like Ocean provide the wrapper for these data packets by encouraging public sharing and secure monetization of data, and better price discovery via liquid data markets.
Similarly, decentralized video transcoding protocol, Livepeer continues to gain traction and accrue fees as a result from its rapidly growing video network. Within the Cosmos ecosystem, application-specific blockchains like Akash continue to expand and produce early signs of sustainable network revenue…
Some upstart chains too (MOVR)
it (local strategy of targeting upstart chains once they exhibit sufficient user growth) is viable for DeFi blue chips, but probably not upstarts and it’s likely too reactive to effectively capture the early growth of smaller networks with cult-like communities (Moonriver)
while not forgetting this tweet:
ENS has a token right ?
Neary half a million ENS names were registered before the protocol’s billion dollar airdrop to its early users last month, and it’s conceivable that the network could rival or surpass centralized DNS maintainers like Verisign ($27 billion market cap) one day. Verisign manages nearly 85% of the world’s 200 million websites today, but the domain space for identities in Web3 could be 2–3 orders of magnitude larger, as there are 40x as many people as websites, 5x as many internet connected devices as people, and a lot of global citizens who won’t necessarily trust Verisign given decentralized alternatives.
And some final bangs for the last 🧨:
If 2020 was all about DeFi, and 2021 was all about NFTs, 2022 will be the year of the DAO.
Every DAO treasury transaction is essentially subject to a board-level proxy vote today; then you can appreciate why 2022 will be the year of DAO tools
The centralized exchanges’ perpetuals volumes dominate spot volumes, and I’d expect DeFi will be no different. That makes Perp* and dydx attractive relative value plays (to spot DEXs) for the year if you’re looking for a 70 IQ idea.
I have barely scratched the (original 165 paged) article in this summary, given my average-human-excuses. There are some other things that I would have added here, had the scope for this article not been limited to my search for the next moon coin 😂. I’ll list them here. It illustrates 7 methods of scaling blockchains, amazing resources on understanding and/or interpreting L2s, DAO in-and-outs, some prominent DAOs, anticipated problems with DAO formation and management, sources of on-chain & off-chain data (including TVL, aggregated metrics, etc), legal framework for DAOs, and so much more 🥲. Finishing off here.
I hope someone there thanks me for saving their efforts needed in perusing Messari’s report. Finally, if I were to give one word for anticipated trends for crypto 2022, it would be none other than… DAO. And I am definitely looking forward to the Cosmos ecosystem. See you soon 🤌🏽
