As a professional translator, I am tired of the lack of innovation in the cryptocurrency market and would like to see more novel projects. This week, it was difficult to find worthwhile investment opportunities in the farming sector, but Sanctum and Elixir are worth paying attention to. The crypto market needs to attract the masses with new consumer applications like Fantasy Top and Polymarket. Farcaster and Lens are promising platforms that can reward early users through airdrops. The Gamefi sector is also gaining attention, with attractive token economies in games like Nyan Heroes, Metalcore, and Splinter. Although the crypto community has high expectations for these games, more effort is needed to attract mainstream users.
Title: In Search of Bull Market Catalysts: Crypto Consumer Apps
Author: IGNAS | DEFI RESEARCH
Source: Substack
Translation: Lynn, Huoxing Finance
I’m tired of seeing another L2 launch with a $5 billion FDV. I’m even more tired of seeing Uniswap, Aave, or Liquity forks on these new L2s. And I’m no longer interested in buying another infrastructure protocol (data availability, oracles, blockchain-as-a-service, etc.) at a high valuation because these protocols don’t bring any value accrual to the tokens. What I want is innovation! Where is the innovation?
In this cycle, I have found some innovative ecosystems. But first, let’s take a look at the farms this week:
Farms of the Week
It’s becoming increasingly difficult to find protocols worth farming.
Blackwing: Still underdeveloped. It’s a modular blockchain for leveraged trading of long-tail assets (such as memecoins). Deposit LRT (weETH, rswETH, sUSDe, or Pendle assets, etc.) to earn Blackwing XP and LRT+Eigen points. Built on Initia, so we may also get Initia airdrops. Tip: Trade BXP on the testnet BUSD and farm more BXP, even if you’re not a whale (or if your PnL is negative, you’ll lose). Just raised $4.5 million from multiple VCs. → Invitation needed to join. Use my permanent code here: ignas0
Sanctum: The best farm on Solana. That’s it. My favorite strategy (and pet) is INF LST because it 1) earns 9% APY and integrates with Kamino and Marginfi for capital efficiency (leverage!). Speculation: The more pet (LST) you have, the higher your allocation. → Join using my referral link here for a chance to win EXP rewards.
Elixir – Raised $8 million at a $800 million valuation from Crypto Hayes, Sui, Amber, etc. Elixir allows providing liquidity to order book exchanges and earning rewards, including Vertex, Bluefin, etc. The potion system is live, and you can earn mystery chests by depositing ETH and minting elxETH. Your ETH will be locked until the mainnet launch in August. → Join here with my invitation.
In Search of Bull Market Catalysts
In my previous blog post, I discussed the market’s dull state and shared potential external catalysts to drive the market upward. ETH ETF and the US government’s changing stance on cryptocurrencies will play a role, but further external catalysts like interest rate cuts will drive the bull market later on.
The Boring Market and What’s Next #2
IGNAS | DEFI RESEARCH
· May 15
Read full article
However, I really enjoyed the positioning of the 2020-21 bull market. It was a perfect storm: governments had to print money due to Covid (external catalyst), and people were bored at home speculating on NFTs, farming 1000% DeFi yields, Metaverse, and playing games on Axie Infinity or other P2E games.
We have had several innovations in the crypto space to keep us engaged. But so far, this bull market has been somewhat dull. I believe that to turn this bull market into a super cycle, we need strong internal innovations (beyond the macro) to attract retail investors and keep them interested while we all enjoy inflated gains on paper.
If we can’t spark the vibrancy of the internal crypto casino, even crypto natives will choose to simply hold BTC, ETH, SOL because the risk/reward doesn’t make sense to trade in PvP markets.
Right now, we’re just farming points or speculating on memecoins. Memecoins are fun, and there are signs of new retail users entering the market. But if you don’t have a special advantage, the chances of making money through memecoins are slim. Influencers, market makers, and pump and dump groups take advantage of naive traders.
Points are a diminishing trend where the rich get richer because rewards usually depend on 1) the amount of funds deposited and 2) the trading volume. You can at least earn more airdrops by creating multiple wallets and executing manual trades. But now most airdrops are linear, and LayerZero’s anti-whale efforts may change the game. Oh, Ruslan…
So, which innovations of this cycle can reignite retail enthusiasm? You know I’m bullish on the re-collateralization narrative, as it’s a playground for minting new tokens and can boost the yield and demand for ETH. But re-collateralization is not an attractive story for retail. Few people really understand or care about what “generic interworkable work token” means. No, re-collateralization is a game for whales. Though the innovative AVS might attract more tech-savvy retail.
Re-collateralization Navigation: Eigenlayer Active Validation Services Guide
IGNAS | DEFI RESEARCH
· Jan 30
Read full article
BTCFi with Ordinals and Runes is my second favorite innovation/narrative of this cycle. I explained the reasons in my previous posts.
Rune Protocol Release Guide: Beyond the Initial Hype
IGNAS | DEFI RESEARCH
· Apr 16
Read full article
But due to technical complexity and lack of a clear value proposition, even tech-savvy Ethereum/Solana supporters are not very interested. Although there are some interesting videos of Chinese grandmas trading BRC20.
No. We need something to rekindle our animal devolution spirit and attract a large number of new retail users who can actually make money (unlike most memecoins). It’s hard to predict what NFT/P2E will look like in this cycle, but I’m betting on the new generation of consumer applications.
Signs of this phenomenon have already emerged.
Hot Consumer Apps
On May 7, four new social apps briefly entered the top 15 protocols by fees generated:
Fantasy Top
Friend Tech
Pumpdotfun
YOLO Game
“The user numbers are still small (none with DAU over 20,000), but from a revenue perspective, their success represents a shift of the crypto-native business model to building proprietary distribution at the application layer.” – Excerpt from Our Network newsletter’s “Consumer Ecosystem” report.
To be honest, I was very skeptical about Blast L2 (backed by Paradigm) because it’s just another L2 that allows you to earn points. And I’m not planning to deposit any ETH to earn points. But Fantasy Top made me join Blast. Turns out, I don’t care about another L2. I care about applications on L2.
Fantasy Top can speculate the engagement of Twitter influencers. You can earn Blast Gold + FAN points or trade your hero cards. If you want to try Fantasy Top, join using my referral link: DefiIgnas. It’s a niche protocol that combines speculation with crypto Twitter. But just like how Facebook started as a platform for Harvard students, then expanded to other Ivy League schools, Fantasy Top might expand its coverage to include famous Twitter or Instagram influencers. Elon Musk’s cards will be in high demand.
The growth outside the crypto circle is what I expect from this cycle. Which application is most likely to achieve this goal?
Friend Tech briefly succeeded in attracting OnlyFans girls but they didn’t stick around for long. Friend Tech is currently at a crossroads of reshaping itself and launching another points program for its local L2.
Pumpdotfun is a great platform. Yes, I don’t like speculating on memecoins, but Pumpdotfun has found a good product-market fit in the current market as a platform.
YOLO Game is also primarily based on speculation, but there’s one consumer application that integrates speculation and social elements better than other apps: Polymarket.
Polymarket Prediction Markets
Polymarket is a prediction market that allows trading binary event-driven options with settlement prices at $1 or $0. You can choose to exit your position before expiration.
For example, you can bet on who will win the US presidential election or whether ETH will replace BTC in 2025.
I like it because it leverages the collective wisdom of the crowd for real-time sentiment analysis. It helps to get a clearer understanding of world events.
Vitalik has praised Polymarket multiple times:
During the ETH ETF approval speculation frenzy, Polymarket had around 2,000 users per day. Although still too few, it has growth potential.Polymarket has just raised $70 million from Vitalik Buterin and Founders Fund, Peter Thiel’s venture capital firm. It wouldn’t surprise me if they launch an airdrop soon.
There’s only one consumer app that I’m more optimistic about: Farcaster. Farcaster is a decentralized Twitter that has reportedly raised $150 million at a valuation of $1 billion!
Compared to other fundraisings in 2024, Eigenlayer raised $100 million, Optimism raised $89 million, and Berachain raised $69 million.
Farcaster is a 0 to 1 innovation of this cycle, combining the features provided by social media (Twitter) with the best features of cryptocurrency. It could become a super crypto app that combines social interactions with financial transactions such as payments and trading.
That’s already impressive, so if X suddenly disappears, all Crypto Twitter users can immediately migrate to Farcaster.
Join Farcaster through my referral link and get 50 WARP tokens for free.
In February, Farcaster saw a significant increase in its user base when $DEGEN community tokens were airdropped to early users. Surprisingly, the number of daily active users continued to grow, reaching 59k.
Lens Protocol is another layer of decentralized social media with 19,000 daily users.
Although Lens has fewer users, it is actually the only network that stores user content and identity on-chain. Farcaster’s posts and interactions are off-chain (while user profiles are on-chain).
Lens unexpectedly announced a migration from Polygon PoS to zkSync, one of the ZK Stack layer-2 solutions. This is a significant win for zkSync and a loss for Polygon.
Which consumer apps do you still believe in? I asked on X and received some interesting comments.
I’m bullish on consumer apps because they innovate in user reward mechanisms and token economics, offering a way out of the low liquidity, high FDV trap that plagues this cycle.
The problem is that there are still too few popular consumer apps!
Furthermore, speculating on the growth of Farcaster or Lens may seem complex, but one thing I know about cryptocurrency is that it always finds unique ways to reward early users.
As an early user of Farcaster, I received thousands of dollars worth of DEGEN airdrops. In fact, Farcaster has 47 “Scenecoins” (social memecoins) that you’ve probably never heard of.
Lens has its own memecoin, but I’m confident that Lens will eventually airdrop $LENS tokens. I’m not sure about Farcaster.
Your airdrop will depend on your level of engagement, so posting once or twice won’t earn you much. However, these platforms provide a way to escape the current “rich get richer” point system, where your airdrop depends on the size of your wallet.
Even on Fantasy Top or Polymarket, rewards are more focused on elitism: if you’re smart enough, you can earn extra returns.
These consumer apps may have different token economics and could break free from the low liquidity, high FDV trap. Friend tech airdropped 100% to the community. I hope other consumer apps follow FT’s footsteps.
A fair and generous Polymarket will shake the market, potentially attracting more venture capital funding and attention from users, from infrastructure products to consumer apps.
Honestly, we really need more successful consumer apps in this cycle! For our industry. I like Picolas’ point here that we need something to break the current stagnation of cryptocurrency.
Other areas also have the potential to attract a large number of new users. Telegram <> Ton integration and new crypto games.
You can read more optimistic points about the Ton ecosystem and dApps here:
[Link to the article]
Top 5 Low-Key Layer 1s to watch
Ignas | DEFI Research
· May 1
Read full article
Another sector is Gamefi.
To understand the latest popular GameFi games and their innovative token economics and incentive mechanisms, I collaborated with our Pink Brains researcher Skipper.
Be sure to follow him on Twitter for more GameFi content.
GameFi: 3 Top Web3 Games Worth Early Adoption
Let’s face it. Most previous GameFi projects lacked the “play” in “play to earn.”
Furthermore, the “earn” element typically involved paying utility tokens to users, but these tokens didn’t generate any value because the games themselves were unappealing.
That will change in 2024.
We’re seeing for the first time player-centric Web3 games gaining mainstream attention.
Here are 3 early Web3 games worth your attention:
1. Nyan Heroes
Nyan Heroes is like Overwatch, but with cats piloting giant mecha jets. This Solana-based first-person shooter game attracts players with its rich arsenal of weapons and dynamic actions like climbing.
After just 2 quarters of pre-alpha testing, Nyan Heroes made it to the top 5 most popular games on the Epic Games Store.
The free game launched its $NYAN token on May 21, with a market cap of $25 million. It has been listed on Bybit, Gate.io, HTX, MEXC, and Backpack Exchange – a good sign for future price trends as long as the team continues to work hard.
The studio behind the game, 9 Lives Interactive, raised $3 million in a funding round in early March.
Nyan Heroes catalysts:
Ranked among the top 30 most popular games on the Epic Games Store.
Over 200,000 downloads within 2 weeks of the pre-alpha version release.
Full game integrated with NFTs to be released in early 2025.
How early players can earn rewards:
Wait for the announcement of the next pre-alpha season.
Play the game in the third season.
Earn CATNIP points by increasing your MMR ranking.
Nyan Heroes Twitter here.
2. Metalcore
Metalcore is a blend of Battlefield and Star Wars Legends, supported by a Web3 open economy that has the potential for play-to-earn.
Thanks to Unreal Engine 5, Metalcore is one of the first Web3 games that can truly compete with mainstream games in terms of graphics and overall aesthetics – it’s still in the closed testing phase.
This first/third-person territorial warfare shooter game combines PVP and PVE elements.
Metalcore music catalysts:
Highest graphics quality in Web3 games thanks to UE5.
Winner of the Global Blockchain Awards 2024 Best Blockchain Game.
Metalcore raised a total of $20 million and received support from Delphi Digital, Arrington, and Spartan Group.
How early players can earn rewards:
Start playing Metalcore after access is granted.
Focus on high-quality cooperative gameplay, not just scoring.
Players can earn $MCG tokens through strategic gameplay and tactical decisions.
Metalcore Twitter here.
3. Shrapnel
Shrapnel is a first-person shooter game developed on Unreal Engine 5 with play-to-earn elements.
This Avalanche-based FPS is still in early development, but its game airdrop activity with a prize pool of over $100,000 has garnered great interest from Web3 creators and is starting to attract attention from Web2.
Shrapnel catalysts:
$100,000 prize pool for the game airdrop activity.
Team members include Emmy Award winners from works like Halo, Call of Duty, and Westworld.
Shrapnel has one of the largest creator communities in the Web3 gaming space.
How early players can earn rewards:
Purchase Shrapnel Extraction Pack NFT to play.
Play during the next game airdrop activity (to be announced).
Top 1,000 players on the leaderboard can share the prize pool.
Don’t get too carried away
Consumer apps need to attract mainstream users beyond the crypto community.
But Brave provides a valuable lesson: the success of a protocol is not necessarily correlated with token performance.
Despite being one of the most successful consumer apps, BAT’s token price is still at 2017 levels.
Any dApp mentioned in this blog has a low chance of surpassing BAT in the long run.
So do your research on when to take profits.
