Author: Ignas | DeFi
Compiled by: TechFlow
This has been a harsh awakening for anyone who was bullish on altcoins after BTC hit new highs in March.
I was also overly optimistic, expecting BTC to move to ETH, followed by altcoins to follow.
The results were not what I had hoped for. ETH lagged behind, and most altcoins had only a short rally before falling sharply.
My strategy is relatively conservative, focusing on staking L1 tokens as “productive assets” - you can stake them and use them to obtain airdropped tokens for its ecosystem.
My strategy is to sell the airdropped tokens back into L1 tokens, which should drive the price of L1 tokens up (just like dollar printing drives the prices of major stocks).
I believe $ETH will outperform other crypto assets as it is the most productive asset in crypto, especially with the high yield airdrops available through re-staking.
Indeed, airdropped tokens like ETHFI and REZ have issued millions of dollars in value, and EIGEN and other LRT governance tokens are coming soon.
While these high-yield opportunities remain, ETH has failed to induce FOMO (fear of missing out).
Everyone may have overinvested, buying large amounts of ETH and BTC during the bear market.
Nonetheless, everyone actively using ETH for yield is likely doing better than the spot price of ETH.
And as $EIGEN is unlocked, more money is about to pour in. No big regrets on this front.
The SOL ecosystem performed well initially, and the success of $JTO and $JUP really drove $SOL prices as FOMO set in.
Then the $W airdrop performed mediocrely, but every subsequent airdrop reward dropped dramatically ($TNSR, $PRCL, $DRIFT), with $CLOUD performing the most disappointingly (relative to expectations).
Right now, Solana is a meme coin playground, but innovative DePin and DeFi protocols are biding their time when the meme coin craze dies down.
The Bitcoin ecosystem was doing well initially, fueled by BRC20 and NFTs — we got multiple airdrops just by holding “blue chip” NFTs. But then Runes came online and everything took a nosedive.
I believe Runes will rebound once the infrastructure, especially DEX, improves.
Other L1/L2 ecosystems perform even worse.
Injective’s decentralized applications are of poor quality and its airdrop is not worth mentioning.
Starknet’s $STRK airdrop failed to generate a “wealth effect” in the ecosystem. Despite the high DeFi spring rewards, protocol airdrops have been disappointing.
SEI performed well in NFTs, but DeFi decentralized applications and airdrops did not perform as well.
SUI's ecosystem has high-quality decentralized applications, but the airdrop was not generous enough, and the unlocking of SUI put a heavy burden on the price.
The Cosmos ecosystem is suffering from internal fighting, airdrops have dried up, and they must recover from recent attacks.
The Arweave community expected $AR holders to receive a higher $AO quota, but in reality they only received 36%.
What will happen next?
Stacks delayed the Nakamoto upgrade until the end of August, hoping that multiple airdrops and faster block times would bring some FOMO.
Still waiting for $EIGEN trading to launch, as well as the second airdrop and the launch of Swell, Kelp, Puffer tokens.
Multiple Eigenlayer AVS are being built and prepared for token launch (hopefully with a generous airdrop for re-stakers).
Symbiotic and Karak are challenging Eigenlayer and may try to get ahead of EIGEN when market conditions improve.
Fantom’s migration to Sonic will test whether “renaming” a new token can generate excitement for the “old” token.
When/if the meme coin craze dies down, will DeFi OG tokens rebound, perhaps because degens get tired of low liquidity, high FDV tokens?
Ultimately, these internal catalysts depend on favorable macro conditions and ETF inflows - our casinos are not attractive enough to attract a new wave of retail degens.
But if the market rebounds, DeFi degens’ playbooks will need to be re-evaluated, focusing on the most innovative ecosystems that continue to build and generously reward their users.
Which ecosystem are you betting on?
