The 7 Most BULLISH Crypto Narratives of 2024!

Transcript

bankless Nation we have a bankless takes episode for you today I think it's a continuation from our episode last week David uh maybe by popular demand a lot of folks like that episode so what we're going to talk about today is seven investment narratives for the 2024 bull market we touched on one of those investment narratives in the last episode AI number one yeah we'll talk about that again but then we'll give you six more that we think are very interesting and how we're going to format this is I think we'll go one by one uh we'll talk about what the the narrative itself is why it's important and what some projects are in that particular category what is investable so that is the format for today's episode before we get there a message from our friends and sponsors over at cartei the first modular execution layer

in the crypto space that runs Linux we all know Linux but now Linux can be your virtual machine for your particular layer 2 layer three app chain on ethereum this is what carteia allows you to do let you use Linux runtime for your virtual machine for your or change you can build daps that leverage all of the traditional open source libraries and toolings that of course Linux has there is a $1 million ecosystem Grant initiative from cartez that is live right now uh so there's a link in the show notes if you want to get some of that $1 million to build on Linux in web 3 well there's there's two things I like David I like a million dollars and I like Linux and caresi provides both of those things as we get into this episode uh I want to just kind of like uh Zoom

all the way out and look at the crypto industry from like a satellite view every single bar bull market there are narratives and there are many narratives in every single bull market and every single bull market has their own specific set of narratives so we are trying to define the set of narratives that we think will capture attention and energy from different corners of the globe there's always more than one some more relevant than others some larger than others and some will speak to you more than others my suggestion is that you pick your favorite version your favorite narrative to pay attention into in crypto and double down on just like one or a few trying to be an expert in all of them will make you an expert in none of them go deep that's go yes pick

your pick your flavor pick your investment style and also remember that these are narratives and narratives can be fleeting just as a bull market will also be fleeting there will be times when this narrative quells when this dies down and then also one more big just zoom out Moment The Meta theme for all of these narratives is more or less air drops the point of crypto is tokens we all like tokens we like playing with tokens we like speculating on tokens we like investing in tokens airdrops for all of these projects all of these narratives all of these categories is going to be the way the dominant way in which a lot of people speculate on receiving aird drops receiving tokens perhaps holding the tokens uh but air drops is really the big overarching strategy for how to get exposure to all

of these unless there is of course already a token that exists that is especially true I think it's great if you have not a lot of capital uh to play with so if you're second second cycle or a first cycler right you can like earn your way into these opportunities as well so that is a nice feature so let's go ahead and get into the seven different investment themes that are going to define the 2024 bull market but first a moment to talk about some of these fantastic sponsors that make the show possible especially Kraken our preferred way of getting Capital into the world of speculative narrative investing in crypto if you do not have a kraken account consider clicking the link in the show notes to getting started with Kraken today if you want a crypto trading EXP experience backed by worldclass security and awardwinning

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the uh seven narratives do do you mind if I give them the the quick dad talk in a we all need a good dad talk in crypto all right so so quick dad talk here the lens approaching this episode is not the typical bankless lens and we said some of this at the end of our our previous episode where we talked about AI to tokens and narratives but just a quick summary there are three ways you can make money in crypto you could be a Trader monitor the ups and downs and kind of like the the daily hourly uh weekly quick moves you could be a narrative investor that's what we're talking about today seven crypto narratives and the focus there needs to be on the attention economy rather than fundamentals so attention matters more than fundamentals in this lens in crypto uh investing we'll call it or you know

Veron speculation and then you can be a fundamentals investor where you forget the noise you de denominate in Bitcoin uh and ether and you buy assets with fundamentals and your time range is like you know 3 to 10 years uh you measure it in years and in decades rather than in um months which is what a good narrative generally provides it's weeks to months is is a narrative so this world of narrative investing is uh kind of a Dark Art in some ways right you're you're not actually speculating on real usage real utility you are speculating on attention that's not to say these narratives don't have fundamentals cuz some of them do but recognize that when you are speculating trading a narrative

investing in a narrative you are investing for the attention fundamentals are a subset of that but fundamentals don't necessarily Drive the attention a uh bombastic founder could drive the attention uh Elon Musk tweeting something about the project can drive the attention a uh article in the New York Times Trump you know giving a speech like all of these things can actually drive the attention and that is very frustrating if you're looking at these narratives from a fundamentals perspective I also mention that this is an optional side quest if you just want to ignore the narrative noise and be a fundamentals investor you are totally free to do that just you know stack your uh your crypto money assets buy assets with good fundamentals and then just

like wait things out because the narratives will come and go so that is the preamble uh the other thing I'll say is just like don't get caught up in uh gambling your entire crypto portfolio on narratives all right that is a dangerous track uh to go maybe if this is your your first or second cycle you want to be a bit more you want to lean into the risk a little bit more but remember remember to sell remember to sell not just for stable coins but sell for crypto money assets the things that are durable the Bitcoin coin and ethers of the world so that's the dad talk and a quick preamble to the rest of this episode one thing I'll say we have of course like just a pyramid here Ryan laid out the three layers of the pyramid Traders on top narrative investors in

the middle and fundamental investors at the very very bottom the the longest term holders The Narrative investor section is kind of like speculation on what might become fundamentals is I I'll call it the pre fundamental layer um and that can be correct or incorrect uh but we're more or less uh gambling of speculating on what will eventually become fundamentals whether they can achieve that or not uh will be up to history uh but this is always kind of like where people move up the stack in the in the bull markets where people go risk on people go away from fundamentals and in towards like more the trader archetype and right in the middle of that is uh the narrative investor there are also two sources we pull from one is

a fantastic article from one of a bank list writer Argin called the 2024 crypto investing narrative glossery okay he's got you know a bunch of narratives here we've kind of Consolidated some of them and simplified but we'll include a link to the show notes for that article if you want this in a more written digest we'll also be pulling from the uh coin gecko top crypto categories by market cap so you can see examples of some of the assets that accompany some of these narratives at least those that are public so those are two sources for you as we get into the rest of this episode let's go ahead and get right into it coming in at number one the thing that I think think I think rynie also agrees is going to dominate the entire crypto cycle The Narrative is decentralized AI

the description is AI by the people for the people AI of course is all the rage both inside and outside of crypto it's capturing just massive consumer interest General consumer attention but the problem is that publicly accessible investment opportunities are like constrainted young people people generally are not going to get rich from Nvidia at a 2 trillion market cap that thing is already a gargantuan so how can we get exposure to the AI industry in ways that are young and upstarting and has a lot of like growth potential left in it and this is where crypto comes to serve some of that demand yeah I think that's a great point I mean look at open

AI it's it's doesn't have yeah it's closed right anthropic closed like all of these things are uh completely closed what is open as far as things that you can buy that can capture some of this narrative it's not actually you're not necessarily getting fundamentals uh attached to the AI economy but you are getting the narrative upside and the crypto tokens provide some of that I think that's the argument that you're making here yeah C certainly yeah so it's a lot of these things I think are going to be hot air but there are already projects that have just painted in some absolute insane gains over the last years like bit tenser I think is the big one render just a few other crypto projects that are working to improve the AI space like

render is just putting all the GPU compute resources and coordinating them using crypto coordination mechanisms and then uh allowing people to tap into those resources and there's a token like sometimes you can in the crypto space you'll be able to just like slap some AI stuff around a token and the narrative itself is going to make that token very successful just because people are looking to speculate when crypto wi token prices go up they tend to go up even more uh and when people are looking to AI as an opportunity you just kind of need a name and a brand not to say that there aren't actually very real um projects in the crypto space that are also working in the AI space these are all very early very speculative and just a lot remains to be seen as to like what

they can actually meaningfully produce in their fundamental um on their fundamentals I think for me Casey kuso wrote probably the best distillation of some of the more more F fundamentals when it comes to this category of decentralized AI let's say right not to say that this won't get completely out of hand um but it probably will but a few of her categories are crowdsource compute okay so this is the idea of decentralizing our CPUs and our gpus and you mentioned render that's one example of that there are number of non-public uh startups that are doing this as well hyperbolic is is one of them uh which I know there there are a few others but she also lists aosh i.net uh Jensen these are examples of that then there's

also um decentralized interface so so running open- Source models in a decentralized manner so examples of that are ritual uh for example um also onchain AI agents so these are onchain apps that somehow use machine learning so one example that I'm familiar with is a myell there's also fetch.ai operator. then there's also like the more geeky nerdy stuff like data and model Provence so this is basically um having self- Sovereign data and machine learning uh models that collect the value that are produced here so rainfall is an example of that Vana is an example of that uh tokenize we can tokenize incentivization apps so

think of um character. a if you guys have ever used this tool only with token crypto token rewards uh my shell again is another example of that diva is is another example and we've got like token incentivized machine learning so um think about something like a scale AI but you just add tokenization so you add crypto rewards that's what bit tensor really is and that's what ritual is and then you have onchain verifiability so this is how can you prove what the model actually ran and it turns out the crypto industry has some ZK machine learning technology for that there a few startups doing that modulus labs and upshot there's a lot of categories and some of which I I mentioned do have some

fundamentals but again kind of the narrative is going to get way ahead of these a lot of these though are startups and they are not publicly access by retail well they're all startups but they don't a lot of these don't have a publicly traded uh token let's say you can't find it on coin uh gecko or coin market cap anywhere one of the reasons why I think this particular narrative is so fun is because there are are a lot of different um parts of AI that make AI a thing like there is the development of the model there's the consumption of the data uh there is the incentivization of the model layer which is where like actual crypto money can can come in in crypto payment rails and I think even just like all of the crypto AI startups are trying

to slap a token into like every single one of the parts that make up the AI industry um the thing is is like crypto and AI both move very very fast uh and doing a like an IPO for a speculative startups is just like it takes too takes too long people don't want to go through that regulatory hurdles and cryptos is ready for them with like the ability to Mint a token uh and so there's so many different components that make up the AI industry very real components and there are very real ways to incorporate crypto and crypto speculation and crypto demand into those things and when there is demand for tokens which is what a crypto bull market is there will generally be some sort of startup that will serve

that demand like oh you want an AI token for some semi or very or not at all legitimate purpose in the crypto space well here's a token for that and so your challenge as an investor is trying to speculate and and answer the question is is this startup legit or are they only going to exist inside of one bull market cycle yeah what's really like so here's an example of this um you know and coin gecko by the way has a few categories that are useful so you can look at you know top AI coins by market cap here where you see bit tensor and render and and look at that category that that gives you a sense of what projects you can begin to to filter for here's another category called top AI agents and just a living example that I know you and I are familiar with here is uh

look at this is my shell okay so this is like spin up your own AI agent uh a lot of these are like like uh you know you're talking to to some sort of anime character but it can be really any any type of AI agent and then a token incentivizing that AI agent it's almost like friend. Tech meets AI agents and like you can buy and sell various AI agents so again it's like AI agents are a thing humans want to talk to these things like character AI for example and then you add a tokenization layer to it that's what my shell is trying to do so you could you could get a sense for for some of the uh ideas here one could spend hours trying to go down all the different rabbit holes that is AI and how crypto will um innovate and help Ai

and as we kind of wrap the section I'll just zoom all the way back out and just say like hey in crypto you Comm Min tokens AI is very exciting at the very least like this is just all that's happening it's like crypto tokens AI some people are slapping these things together and that's going to like generate a speculative frenzy like fundamentals or like reality aside this is going to be a thing simply because of those two things so definitely buyer beware there's a lot of fun there's a lot of research to do there's a lot of like things to speculate and learn uh but at the end of the day because AI is interesting and because crypto has tokens this is going to be a frenzy yes uh what David is saying is when you're narrative investing don't midc curve the thing okay don't you don't have to think

too hard about tokens slap them together what's the next one so that was number one what's number two coming in at number two reaking what's reaking it's when you stake your eth and then you stake it again so if eth staking ethereum staking is the protocol enshrined bond market the native bond market for ethereum Ian layer reaking is the surrounding corporate bond market around ethereum so companies call these avss actively validated Services think SAS but with crypto stuff they will rent security from E stakers and pay them a small fee so they can leverage cryptoeconomic security for whatever their app is it's like the corporate bond market around the treasuries market

but all in crypto terms so why is this a narrative well it is a strong continuation on the Arc of eth as a monetary asset which is something that is particularly interesting to me and Ryan but also I'll say mainly due to the airdrop meta if you are participating in the reaking corner of the ethereum ecosystem the crypto ecosystem uh there is speculation that there will be a ton of air drops coming your way so if you are reaking your eth you are getting the IG layer points which is speculated to turn into the igen token but then there is also the token for the particular reaking app that you are staking through so Igan layer has these liquid raking

tokens which are kind of like lsts uh so Lido staked eth or rocket pool staked eth in the traditional uh ethereum n bond market but with igen layer there is liquid reaking tokens and there are like so many of these like eight nine 10 of these uh and so you are farming both the IG layer points for the igen token you are farming both points for the liquid reaking token but then you have all the avss the actively validated Services AKA igen applications this is like I said software as a service except now in the crypto context using crypto security uh and there will be many of these that I think are going to do all their air drops throughout Q3

is Q4 and so you are farming like multiple air drops hunting multiple air drops all with liquid reaking tokens uh and so this is like kind of a a way to get an index of the entire reaking space uh just by reaking your eth uh this is why I think it is in meta to say nothing about the power and excitement and hype around igen lay it's mainly a narrative just because like people think the IG lay airdrop is going to be massive and then they also get a bunch of followon air drops as well um people like yield what does I layer do it gets you more yield on your eth there's a128 billion of ether being staked to ethereum there is $1 13 billion being

restak in igen layer and all of this is because of yield people love yield Ryan what do you want to add to that yeah I think that's uh that's right on people love yield and one um reference point is defi summer was really the summer of yield was 2020 and uh so we've we've called this as well reaking summer because this is another um Market about like airdrops uh token and yield um I I'll just add some more context to that number you said was an igen layer it's almost 13 billion dollars worth of ether inside of igen layer and it's over 3 million uh eth as it as it stands so it's like you know it's almost comparable to the size of all Bitcoin inside of the ETFs right now uh as a

percent of of total Supply so there's a lot of ether that's already gone in and I think you're right on with respect to the categories the categories are igen layer itself in the game is collect as many points as you can and then think about the um lrts so there ton of different concentric Circle outside of Igan lay right this is like yield on the potential avss later and there are ton of these ether fi kelp Dow Renzo puffer Finance igen Pai Genesis swell Bedrock Inception uh there's a dune board that will Link in the show notes where you can see a bunch of those and again most of these do not have public tokens yet so uh the way to get exposures is probably to start using these protocols and collecting points and as always

there's risks right I mean you're putting your ether into a uh new protocols a brand new protocol so be very careful here and then there's also a category in coin gecko that's worth noting there's things like um Pendle uh for instance which are are part of uh this narrative the financialization layer around lrts so like LRT applications and then there's going to be a future category that doesn't have any tokens yet but that you just mentioned of all of the avss all of the applications that will be built the point of igen layer avss are the point of IG layer and then avss themselves they they haven't I mean there's no P there's no public Dade token for any AVS it is still in just this very early stage and AVS could be like oracles

could be various coins there could even be other networks like that resembles chains that could bootstrap using uh igen layer Economic Security so that's one to keep an eye out on yeah the the excitement around Igan layer really uh crescendos at to the point of avss they there are 30 40 different avss that are all working to come online some Blue Chip uh avss some longtail avss this will be kind of the final phase of the growth of the Igan layer ecosystem first Igan layer main net is going to hit sometime in Q2 uh many of the LRT projects are going to launch their token in Q2 to as well um ethery actually just announced the launch of their token using the binance Launchpad you can only imagine others like swell have been very

uh explicit about when their token is coming sometime in Q2 uh so I think it goes LRT tokens in Q2 Ian lir main net in Q2 Ian token at some point uh whenever they get to it uh and then just like the I the avss all drop their tokens of which there are many and where are the avss going to drop their tokens it's got to be to the rakers uh and so uh this is just like I think one of the most efficient Point uh token airdrop Farms that exists and that's why people are very very excited about it all right give us number three David number three the Bitcoin Renaissance there is a lot packed into the Bitcoin Renaissance these are Bitcoin layer 2s these are Bitcoin ordinals and also Bitcoin

reaking Bitcoin is also get is getting reaking as well just like what we were talking about with IG layer on ethereum but now with Bitcoin so the tagline for this section Bitcoin is growing its first ever ecosystem of decentralized applications since the beginning of Bitcoin it's never been able to have its own native applications building on bitcoin has been too primitive to do anything meaningful or useful the lightning Network which was bitcoin's previous path to scalability is now just kind of being acknowledged as just a failure in technology it was just a dead end uh and now thanks to new technological breakthroughs people have learned how to build real applications on bitcoin unlocking the 1.5 4 trillion dollar of Bitcoin market cap to new

native use cases and the idea here is that applications layer twos on ethereum have already been proven out as finding product Market fit in the crypto space we have now learned how to put those projects on bitcoin so we're just taking a lot of the Innovation that's happened elsewhere in crypto layering it on top of the Bitcoin stack which is one of the the thesis the ideas the hypothesis that many bitcoiners would have like if the crypto industry uh would discover anything useful you could put it on bitcoin um the demand for Bitcoin Renaissance exposure uh was I think pretty well Illustrated in Stacks which is one of these like Bitcoin side chain Bitcoin app layers before really these technological breakthroughs were really discovered so Stax is a project that's

up 400% on the year uh and that to me that's just illustrating how much demand there is and it really doesn't stop at Stacks the thing that is I think really getting people excited uh in addition to ordinals which we'll get to in a second is the bit VM uh the bit VM is unlocking real Bitcoin layer twos as opposed to just like side chains uh and so this is a technological innovation that is still in research mode but many startups are building Bitcoin layer 2os under the assumption that eventually bit VM will be a fully F fledged piece of technological infrastructure that they will be able to use uh and so last cycle ethereum layer 2os went from infancy to maturity uh and this this cycle they're getting even more mature now Bitcoin is

like okay I'm going to take some of that uh technological innovation and layer that on my on on the Bitcoin uh layer one um Babylon is the Bitcoin reaking project and so just generally Bitcoin as a unit is being leveraged in highly productive ways uh last cycle we had Celsius and last cycle we had blockfi these Bitcoin centralized lending applications and now there's no good way to make your Bitcoins useful so things like Babylon and also Bitcoin layer tws are allowing Bitcoin holders to do things with their Bitcoin and in a bull market people want to touch their tokens people want to apply their tokens in productive ways to get yield to get upside in ways that are just beyond holding um lastly I I'll say

all of this kind of got started by the ordinals revolution which is ordinal is basically nfts on bitcoin using Bitcoin block space to host images and data uh and this is also getting kind of pioneered by the tap rot Wizards project Eric wall and udy wor Heimer um magic Eden is a nft platform nft Marketplace kind of like openc uh but they have specialized now recently in ordinals and so nft drops are happening on bitcoin uh and they are pumping uh which is a sure sign of a bull market so if you are just interested in holding Bitcoin and also playing with Bitcoin uh the whole Bitcoin Renaissance narrative is probably for you yeah I think one macro

theme of Bitcoin Renaissance is it's basically following the path of ethereum so you see ordinals these are sort of bitcoin's version of nfds uh you you you you heard about layer twos right this is something where ethereum has has already uh explored the frontier here and and this is Bitcoin uh following along uh and you also talking about Babylon which is essentially sort of a early stage reaking protocol using using Bitcoin it's kind of like the igen layer of Bitcoin let's call it I I think one thing to note just to uh dampen a few things is of of course Bitcoin at the base level uh is less expressive it hasn't dealt with some of the things that is dealt with with respect to like me and like uh how do you actually expand the data availability layer right

I mean we just as we're recording this uh ethereum has just completely upgraded its data availability layer and provided a ton more bandwidth to its layer twos I expect Bitcoin will have to go through these these same sort of things and even something like uh the bit VM which is a break breakthrough it seems like it's not ready yet it does seem to provide actual real legitimate layer tws but these are optimistic uh rollups in uh ethereum Parlin so we can't yet do a a ZK rollup on top of of Bitcoin using the bit VM technology so there's some limitations there anyway it's a it's an interesting story because this is Bitcoin going through the same trajectory as ethereum just with a few more limitations and uh a few years

behind I would say but a lot of opportunity there um number of the projects you mentioned aren't public the one that uh we did talk about and we looked at a chart was stacks and it seems to be getting a ton it's up 400% uh 400% on the year so it's getting a ton of this narrative activity I expect many more Bitcoin Centric layer 2s and projects to launch this year and people should keep their eyes open yeah basically if you have Bitcoin then a lot of projects are coming online that are going to compete for your Bitcoin um in addition to the ETFs one of the just this is probably the second biggest source of excitement in the Bitcoin space all right moving on number four new infrastructure is what I will call this section uh if

you're a nerd you we will call this section modular protocols and data availability new infrastructure as a category is always a bull market theme every single cycle it's also a bare Market theme it's just a theme in crypto in general we always invest and build and spin up new infrastructure um today in 2024 the theme of crypto infrastructure is learning how to interoperate with each other uh because every single bit of infrastructure not every single bit but like a large number of them are modules um learning how to interrupt and share each other's resources and connect modules together to build a global kind of interconnected crypto system uh investing in the modules that are the most useful in

crypto is kind of a fun way to sift for gold we're getting pretty down the crypto Rabbit Hole here so this is the pretty the the technical side of things the nerd side of things if you really like to be on the frontier of trying to see where the crypto industry as a whole is going uh investing in New new infrastructure or speculating on new infrastructure is like a fun place to do this building deep technical infrastructure is like kind of confusing for a lot of the crypto Layman but it is a great way to speedrun your way into like understanding why crypto is built the way that it's built um it's perhaps unnecessary there's a meme that we have way too much infrastructure in crypto and we're investing just in infrastructure over and over and over again without ever focusing on the consumer applications but this is

largely fueled because VCS will fund it and Retail will speculate on it and it really only takes about one out of every 100 projects to achieve a$1 billion doll market cap and then maybe one out of every a thousand projects to actually improve the quality life of the users who use these systems uh and all the other ones is just you know speculation uh and so whether or not you can find the ones that uh will stick around uh is a fun game for some uh but it's also a great way to stay educated I say if you can be informed about this part of the industry you're more or less informed about everything there is to know about crypto I'd say I think one thing uh to point out is that when we're talking about infrastructure we're often talking about protocols and uh like new networks

that need to be bootstrapped which of course that is one thing that that crypto does uh fairly well is decentralized networks and protocols with tokens attached to them and so that that's why it seems like there's a lot of upside in this category but I I want to zoom out and uh paint paint the picture of of why we actually need another round of infrastructure investment and the reason is basically because our blockchains don't scale today if we want to preserve decentralization uh and want to scale them at the same time in other words like low gas fees low cost uh for for transactions then uh we need a new set of infrastructure and basically there are two parallel um paths being uh explored by crypto right now one is the modular path which is sort of ethereum

and Company and the other is there are some monolithic chains that we'll get to that in kind of a a an upcoming narrative some of the alternative layer ones the monolithic path but basically in the modular path which ethereum has adopted is kind of Outsourcing a ton of of its um capability it's Outsourcing the execution layer it's creating surface area for the development of so many different chains and that is both an opportunity but it causes Downstream uh challenges like now these chains are all fragmented and so we have to bridge them together we have to interoperate we have to share the sequencing of them there's a new set of problems to solve that ethereum is basically Outsourcing to kind of the the free market these various modules that are springing up and so that is the the broader context

for why I think it's justifiable to have a new round of infrastructure investment so we're going to need new execution layers okay like new virtual machines and so we see um parallelized e like uh V virtual machine layer twos springing up right eclipse is one of these right it's putting the svm uh that's the salon of virtual machine in a inside a layer two we need um sequencing shared sequencing so now our chains are fragmented so how do we like unfragment them and have uh the ability to transact atomically from one chain to another well we have espresso uh doing some of that Astria doing some of that shared sequencing we have um a whole bunch in da I've got this in front of me from

coin gecko this is data availability so ethereum has some data availability but it's not enough to support the entire modular world so um Celestia has been one of the big stories of the year I think in its price runup which is a dedicated data availability layer for uh chains that supports kind of this this this modular approach and I mean look at the market cap of Celestia at this point in time fully diluted valuation of 17 billion and that has been up only this year so there there are all of these like nerdy categories not to mention uh layer twos David there are so many new layer 2s coming uh online both in inside layer 2 framework so the big Frameworks like the the op stack arbitrum orbits ZK hyper hyper chains polygon supernets and

then you have chains inside of these things you know pushing on the edges from a goto Market perspective things like blast um there's so much to talk about with these new uh with layer 2 Chains as well anyway all of this infrastructure will definitely catch a bid in various pockets and what's your general advice for for how to navigate this I mean in in previous bull cycles one thing we used to say is if if you want to see if a D5 protocol has potential like just use it I think that is very very true when it comes to chains like go use these layer twos and you can get a better sense for for which ones are going to take off or not that is still good advice but it's kind some of these infrastructure things you know

like a DA layer I mean that's a very B2B type of thing and it's really hard to um predict how that's going to play out do you have any general advice for how uh invest should look at the the this entire infrastructure class yeah for me the the first bit of advice comes to the people who are really trying to become extremely knowledgeable in crypto the most knowledgeable possible uh all of these different like sectors of infrastructure like the execution layers the sequencing layers the data availability layers the layer two Frameworks the the roll up as a service providers the interoperability applications if you can Define each one of these categories and articulate how they work together because again modularity means that one module is going to connect to another module which

will connect to another module if you can articulate the ecosystem for how these weave together and become one global system then you are basically as advanced as possible as you can get in the crypto space so it's kind of like a research homework assignment to understand all of these things and then from the people who are looking to gain exposure to these things it's about which ones are going to hit main net first uh and then can you actually touch some of this infrastructure uh and so like right now staking your tia your Celestia token inside of the cosmos ecosystem is a target for receiving aird drops it's been a pretty successful way to receive air drops so that's one way to gain exposure here uh staking TOA Nets you some sort of like 20% of like

Network issuance um Igan da data availability from IG layer not yet a thing yet and so people are keeping an eye on that it's like oh when that comes online maybe I want to go play in that world and see like what kind of footprint I can establish over there it's two narratives we got reaking and also layer has a a data availability layer right yeah so it's really mainly about like how can I grow my footprint these are all deep infrastructure uh and your wallet with transactions can establish like a presence on a lot of these um bits of infrastructure just by leaving traces of your activity on chain and growing a footprint is kind of like growing a net generally the larger net you have the more optionality you have

on like finding some way to have exposure again like largely via air drops but other ways as well so many layer twos to explore I mean this this is one of the most exciting areas I think to to explore the frontier on and um the wallet experience has improved a lot and you know one wallet I've been using a lot recently is Rabbi David which provides a much more seamless like interface for navigating across chains right you don't have to like constantly switch which chain you're on you could just kind of like see your assets uh you know irrespective of of of the chain so uh really exciting area I think for sure but um man it's so Dynamic um it's it's hard to pick a specific subset of layer twos that are going to absolutely crush

it uh this Market because there's just so many new experiments spinning up coming up next we're going to talk about the oldest Pastime in crypto that is the alt layer one trade uh and then we're also going to talk about deepin decentralized physical infrastructure real world assets as well but first I to talk about some of these fantastic sponsors that make the show possible mantle formerly known as bit Dow is the first Dow Le web 3 ecosystem all built on top of Mantle's first core product the mantle Network a brand new high performance ethereum layer 2 built using the op stack but uses IG layers data availability solution instead of the expensive ethereum layer one not only does this reduce mantle Network's gas fees by 80% but it also reduces gas fee volatility providing a more stable foundation for mantle applications the

mantle treasury is one of the biggest Dow owned treasuries which is seeding an ecosystem of projects from all around the web 3 space for mantle mantle already has sub communities from around web 3 onboarded like game s for web 3 gaming and bybit for tvl and liquidity and onramps so if you want to build on the mantle Network mantle is offering a grants program that provides Milestone based funding to promising projects that help expand secure and decentralize mantle if you want to get started working with the first Dow Leed layer 2 ecosystem check out mantle at mantle. XYZ and follow them on Twitter at zerx manle are you launching a token is it already live how are you managing ing the legal and tax obligations for providing token grants to your team it's no secret that token management gets complicated between learning all the

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like mobile payments and mobile dii and with Opera minay as one of the fastest growing web 3 wallets cell is seeing a meteoric rise with over 300 million transactions and 1.5 million monthly active addresses and now cell is looking to come home to ethereum as a layer two optimism polygon matter labs and arbitr have all thrown their hats in the ring for the cell layer 2 to build upon their Stacks why the competition the cell layer 2 will bring huge advantages like a decentralized sequencer offchain data availability secured by ethereum validators and one block finality what does that all mean for you with cell layer 2 gas fees will stay low and you can even pay for gas natively using erc20 tokens sending crypto to phone numbers across cross wallets using social connect but cell is a community governed protocol this means that cell

needs you to weigh in and make your voice heard join the conversation in the cell forums follow cell on Twitter and visit c.org to shape the future of ethereum the oldest Pastime in crypto the alt layer One Trade It Never Dies new layer one blockchains come online every single year every single bull market uh we have been producing new blockchains in the crypto SP space ever since Litecoin and Dogecoin uh these new blockchains they all attemp to gain some sort of adoption via technological innovation charismatic leaders really good memes uh it has been the narrative that has high transactions per second right hi that's that's a great line great yeah the high GPS train yeah we're we're the the chain for mainstream

consumer adoption that's a very hot line that many many have leveraged uh some we've seen like oh we're the real world asset chain we'll talk about that narrative in a second um they're all narratives um uh understanding how each one captures attention and why others win is definitely like a dark art it's definitely like um uh there's no real Rhyme or Reason to it some projects just um figure it out better than others um but just overall big emphasis on like this has always been a narrative of crypto every single bull market there is a new type new flavor of alt layer ones uh right now this cycle seems to be the meta of the parallelized virtual machine layer one this was set by the success of salana from last cycle uh and so now

there are a bunch of CopyCat parallel eyes virtual machine layer ones coming online uh suie say apos monad uh and then also the honorable mention the eclipse layer 2 on ethereum also a parallelized virtual machine on uh ethereum as a layer two um but this will also be in addition to the many other types of layer ones that come on scene ever since Bitcoin came about and we made blockchains people are like oh I can make a blockchain um also I'm going to make a blockchain that's going to be worth a billion dollars uh and so it's a speculative fund Venture for layer one Founders it's a speculative Venture for Venture capist who will fund these things and it's even a very favorite pastime for retail speculation um it's

very yeah it's speculation through and through and through uh every once in a while one works and that's what keeps the game going and all these things you got to be very careful about uh token lockups of course so um the all of these chains this this follows with many of the infrastructure Investments we were just talking about as well uh they raised a whole bunch of money from VCS and the VCS are looking for an exit at some point in time right and so retail can be that exit for them and so you have to be very careful about tokens when they're unlocking and um you know the the net selling pressure in some of these assets I I do agree with you David on the alternative layer ones like the big theme this year it seems to me and

for the next uh two years is going to be parallelized uh alternative layer one chains so manad uh has is probably the first project that's going to come online that will actually have a parallelized evm so so far the big virtual machine in town has been um salana and the svm well manad is doing that with the evm so if you are deployed like VI the evm it can take advantage of some of the the ethereum virtual machine Network effect and sui is uh a parallelized VM that is based on the the move VM so that's another flavor of it and I think th those are the projects that are going to catch a bed there there's also this blending though David

we we're talking about this uh in terms of alternative layer ones just because that's a category so they are not using ethereum they are bootstrapping their own validators right and that's what makes it an alternative layer one but there's this blending because they're all chains at the end of the day right and so what is the difference between these alternative layer ones and the layer twos that we were talking about well the only difference is um the layer TW settle on top of ethereum where whereas the the layer ones are kind of bootstrapping their own validator set on their own and and they're kind of like sell uh settling on kind of their their own base layer um do you see any distinction there or it's like why is alternative layer ones why are they a separate narrative why aren't they all

just chains for some reason as a layer one the market valuation of your token just gets the layer One Premium um Layer Two in my opinion I think in our opinion has much stronger fundamentals because as a layer two they simply don't have to pay for their own network security that's what a layer two is they leverage ethereum for security and ethereum secures all of its own layer tws but then if you're a layer two you don't necessarily have the the same Market comparable valuation of like the salana or ethereum itself or even Bitcoin itself so there's always just this incentive pull towards being a layer one because people perceive layer ones to be more valuable even though lay being a layer one is harder and you're less

you're more likely to fail uh in the short term you can attract a higher market cap so it's kind of a narrative trade because you can comp against something like ethereum so if ethereum is worth $400 billion right well we have should be at Le at least four billion do exactly because we're going to capture just x% of ethereum and we're we're not a layer two we're not sellling on ethereum uh we are an alternative to ethereum that's why this class has often been called in the past the ethereum killer type class because some layer they have to go against in order to get the valuation that they kind of want they have to go against um King ethereum in this in this narrative category and knock them out uh and some some have actually had some uh reasonable traction doing this like uh salana I would say

salana extended the alt layer one trade by like another 10 years B it some time because it worked because it worked I've also had a a thesis I don't know how this will play out but over time some of these will switch categories you might see a layer two like transform become become an alternative layer one and you might see alternative layer ones become layer twos in fact we have seen many like former class of of 2021 alternative layer ones now actually migrate and become layer twos like uh cell network is is one of these they were going off on their own and now they're in ethereum uh Layer Two also near has become much more kind of ethereum aligned it's not a full Layer Two I would say but it's providing it's it's pivoted into like da for exactly so very very interesting do

do you have any takes is is basically your assessment that uh look for parallelized alternative layer ones in this in this category do you this is the category that has definitely uh captured attention now uh because like I said the salana set in stone the parallelized virtual machine meta um and so now there are a bunch of like salana copycats trying to um wedge themselves between salana and ethereum uh and so this is why both SE and monad are doing doing parallelized evm not the salana virtual machine but the ethereum virtual machine which has the massive developer ecosystem I will say the layer one trade can be dangerous because you might fall into the Trap of buying into a VC ghost chain and so you do not want to buy the

tokens of some sort of like VC hyped chain that doesn't have any users it just has fake fake Hy excitement from The Venture Capital Community that's the base case that's generally how it play that's where it starts caping a community and building a community is like the next hardest thing for an all layer one to actually gain like real users in real adoption uh and so like the thing is you can become a multi-billion dollar VC ghost chain and what I mean by ghost chain is that like it's a ghost town like there's no one there there's no one using it there's no GDP there uh but you can for some reason in crypto especially in Bull markets you can still like command like a five1 billion dollar market cap even though no one's using your uh and so generally those Investments don't do

very well in bare markets I mean nothing really does very well in bare markets but those Investments tend to go to zero in bare markets whereas the ones with actual Community adoption and actual like economic Vitality on the Chain actually tend to stick around yeah I also say there's there's a danger here in this parallelized virtual machine category is is definitely something that layer twos are pursuing as well and why parallelized uh virtual machines it's because you can max out transactions per second on these things layer twos will also compete against this category in the uh of alternative layer ones all right David let's get to you the next one we're uh almost done here number six dpin decentralized physical infrastructure networks the meme of this one is

coordinate the world's Computer Resources together using crypto so we can build novel use cases so the The deepin Narrative actually has been around for a long time it's uh it's just helium uh or foam was it foam not sorry not helium is like the one that's working actually still around um also like Golem Golem was a 2017 project where like oh yeah like we people who want to use Collective GPU power from like consumer gpus can tap into Golem and so you as a GPU owner can contribute your GPU hash power to this like cloud of gpus and then GPU power consumers can like Leverage that and pay for that and you'll pay you for it uh so is a

decentralized way to coordinate the physical infrastructure of the world and so this this narrative has been around since 2017 just now in 2024 we actually have a name for it uh because it is being unlocked by very fast cheap transactions that can is what's needed to kind of coordinate global resources I mean would you also say that like something like and this is where coin gecko classifies it filecoin would be deepin you could really open up the what deepin could be yeah but this new class of deepin can we get into that it's um it's not filecoin it's um like what does helium do for for for instance yeah helium I think is perhaps like the thing that really kickstarted this helium is just like a decentralized data uh and so you can buy this helium node that local

cell phones in your area can tap into your node for data and this is like very proximate so like we're not talking like miles here we're talking about just like you know maybe 100 meters if you are nearby to someone's like helium node you can use their helium node to get data for your phone uh and so it's kind of like a mesh network uh much more localized mesh Network to receive data and so you spin up at your helium node you get paid helium tokens for providing data to your local surroundings and then consumers of that will pay your node for its data uh and so it's a way to like kind of Route Around the large like data providers like the Verizon the T-Mobil Etc uh and so it's like it's like data Internet uh cell phone data by the

people for the people a lot of the the themes are going to be like by the people for the people because that's what crypto does uh but that's this is just like the first of like many deepin networks that have like started up and as I was mentioning filecoin also render is here which has kind of like a project right cross-section right so it's like dpin meets uh AI plus crypto right and uh so no wonder these things are are doing quite well um what's your overall take I know we're not really weighing in on the fundamentals here but I I got to um confess I've been somewhat skeptical yeah I'm a skeptic on this category these projects like just because um you are maxing out uh token incentives and it works really well when number goes up and generally these types of things work

a lot a lot less well when numbers going down like I I I wouldn't necessarily put this in the category of of deepen but like something like steppen where you get like paid uh tokens for just like walking and like running right to me that is just like not a very sustainable game and uh it went up very high and now it's kind of like come back down and you know the whole dpin category has some of these Vibes I wouldn't say so so much so for filecoin but some of these other projects like definitely have that Vibe well the the problem I think that you're articulating is that like just slapping a token onto these like infrastructure networks doesn't mean that there's demand for the token so there's a difference between producing a token and

having that token be like truly investable investable in like the fundamental sense of the word it's in like well who's who's going to be the net buyer of these things and of course the answer is just like well the consumers of those resources but the thing is like all of these dpin things are like Commodities they're supposed to be highly commoditized and like if we're going to talk about like coordinating uh the compute resources of planet Earth well then we're competing with like Amazon uh AWS which is already extremely commoditized and cheap so like just because it has a token doesn't mean that it has like strong longevity associated with it but look at us we're using the FW again this is not how you should view any of these narratives right it's not necessarily about say the Nar perhaps the most feding that I can identify AI I

can see a lot of uh fluff in the AI for for sure too um all right let's get to the last one David what is this something very tangible something very real right real world assets rwas also a narrative that has been in crypto since the Inception of crypto uh but as we are becoming more mainstream as an industry as there are more suits in our industry as people like Black Rock and Franklin Franklin Templeton are playing around on chain uh there is a growing excitement around the world of real world asset tokenization there is this world in the trafi space called securitization where you take some sort of value and you wrap it into a financial asset and that is called the securitization process uh in crypto we have tokenization uh so there

are a lot of assets and there's a lot of value that are not on blockchain Rails that we could put on blockchain Rails through the process of tokenization uh it's non-trivial but it's definitely exciting there's a lot of value out there and we need more value in crypto uh there's like roughly a gazillion dollars of securitized wealth out there and we've only been really able to successfully tokenize dollars and we call these things stable coins so the question for the real world asset narrative is can we tokenize more and whoever can tokenize more offchain value can certainly become very wealthy as like a project founder or a leader or whatever uh and so uh I know right now the meta has shifted Beyond stable coins

because that is a very successful real world asset tokenization uh Endeavor and now we are in the world of tokenized treasuries which is like the next hardest thing after um tokenized dollars uh real estate has always been a focus of many startups many startups have come and gone trying to tokenize real estate uh but then after that like kind of the world is our oyster who can crack the real world asset tokenization nut because that's a hard nut to crack but there's a lot of value to be had for whoever does there's a lot of projects in this category too some of which are kind of like private and startups Mountain protocol is a treasury tokenization project but it doesn't yet have a public token Ando is one uh that's doing something similar with us

treasuries uh it does have a token so you can see fully diluted value of Ando is 5.6 billion uh and then there's projects that have been through multiple Cycles here like uh centrifuge you remember that was uh previous previous cycle um darling at one point maple as well Goldfinch these are f that are you know like tokenizing various um debt various various credit it's it's a hard game and I kind of wonder in this category who's going to win I I do think David that some of the incumbent players from Big Finance who are entering like we haven't yet seen what black rock is going to do in this space and Larry thinks said the future is tokenization huge token boner he's got a huge token boner yes he is very excited about this and uh he has all of the assets that can

be tokenized inside of Black Rock right he has all of the connection so I sort of uh think that there's going to be some successful startups here but uh Edge to the incumbents when they start to kind of enter this space um one project that never gets any love that is so interesting is a real world asset uh project from my perspective is maker maker Dow that's actually their stable coin is based on real world assets um they've just recently added a PayPal U coin actually uh to kind of back the output of D you know a lot of it's been usdc bed so there's some things going on there it's also has an insane PE ratio it's something like 10 right in in terms of uh priced earnings so you know some

if you're looking at this from a fundamentals perspective would say that's very undervalued but again the narrative has not yet shifted to makeer Dow so it cannot catch a bid which is really interesting so David as we close this out we've gone through all seven um we didn't touch on everything I'll say right there are some narratives that we just can't see right now uh that we just didn't have time to cover like we some narratives that are so large that they deserve their own episode like game five yeah gaming we should totally have gaming here it's just such a large category and it's um it's just too real you know these are narratives gaming extremely real yeah it is real and there'll be narratives inside of gaming that are sub narratives of game fi um there's also nfts are they going to make a comeback there's also um

social fi which seems to be poking its head up in various ways we talked about forecaster for for instance there could be a you know friend. Tech had a brief blip Maybe something like that could make a comeback so there's narratives beyond the scope of what we've uh you covered today but if you had to pick like one particular thing that you are most excited about uh are you able to pick and you know you use your own criteria for picking it could be like the narrative you think is going to pump the highest or the one that has the most kind of like you know uh fundamentals or like what what is it what is sticks out in your mind I made my selection I made my choice long ago I am a big reaker narrative player like I said at the very very beginning you need to find the

narrative that speaks to you the most and double triple down your knowledge that's how you I think how you play this game the best I have elected to double down on reaking uh so I am F farming lrts because I have my eth in the LRT space uh I am expecting the igen airdrop I'm expecting the airdrop of the LRT that I have my eth into uh and then I'm expecting to farm all the air drops of all the avss uh and so there are the players of these narrative games that like to move fast they like to hop around narratives they like to play the meme coin we didn't even talk about the meme coin which has zero fundamentals Point did an entire episode on that uh but the thing is is like I'm a busy guy

uh I make a lot of content uh and so I can't be touching stuff all the time and so to me reaking it's the continuation of the Arc of the monetary policy and monetary effects of ether the asset which I find extremely interesting uh it is yield which I also find great it's air drops it's most importantly passive airdrop farming ether David it's AUM that's all of these airdrops is using ether the den asset that I denominate in it's the one that speaks to me the most yeah I uh I I'll agree on that and uh I'll also add a plus one to modular infrastructure I mean we've been long-term proponents of um this as a direction for crypto so there's a a

whole bunch of you like space for infrastructure that I didn't really know we needed and now I sort of know that we need given all of these change shared sequencers is a you know a fantastic category for instance so guys we hope that was helpful those are seven narrative themes for 2024 good luck out there I got to end with this as always crypto is risky you could lose what you put in oh my God narratives are super risky but we are headed west this is the frontier it's not for everyone but we're glad you're with us on the banket journey thanks a lot [Music]