Emerging Crypto Trends: Maartje Bus, Messari

Transcript

all right fantastic thank you so much for being here and settling down slowly but surely we're about to go into our last keynote here until uh the coffee break uh so super exciting uh conversation to come from emerging crypto Trends from matcha here from um misari so let's give her a round of applause and welome her in thank you thanks okay well thanks uh thanks for having me here and um thanks for coming to my talk later on Friday after afternoon uh home stretch coffee is inside um so my name is marcha BU and I'm a head of research at massari massari is a data analytics and research firm you could kind of like Loosely

think of us as an S&P or Bloomberg for crypto uh we've been around since late 2017 and um yeah research uh is in our DNA uh so we do number of different types of research and uh research also uh goes into some of our uh software products but what I'm going to be talking about today has to do with our thematic research uh that is uh for for our subscribers and um I'll I'll I'll skip this but we do we in the interest of time uh but we do we do a number of different things so very quickly we're try to be early to narratives uh

sometimes we try to quantify these narrative so put a number on it how big the potential opportunity is we try to explain new technologies in an accessible way uh we try to stay close to the beat of the market and uh we we uncover deep data driven insights which users find in particular useful when it when it comes down to uh you know traction for example of protocols so I'm going to I was initially going to talk about seven emerging crypto Trends but then I quickly realized that that's a lot for 20 minutes because I would like to put a little bit of meat on them at least so I cut it down to four um the intersection of AI and crypto social fi

also previously known as decentralized social uh the next defi yield meta and real world assets uh none of this is uh Financial advice you should do your own research obviously um so uh and and and these by the way these are all things that we see unfold or become like big things or continue to big things over the next like uh uh 6 to 12 months we actually have a report uh that came out today uh where we talk about these and a couple of other ones uh so uh if if you're a subscriber uh you can uh you can access that if you're not it will be Pro content in a couple of weeks and then you can subscribe to a trial and get it

for free so with that the uh intersection of of AI and crypto so what is that right there's obviously been a lot of Buzz about Ai and crypto I really like this simple framing uh by that I got from a paper in the University of Oxford which is basically saying well Ai and crypto you can look at it from two different ways right one would be crypto helping Ai and the other one would be AI helping crypto right and you see a couple of examples of each of those here what it's specifically not is AI and crypto living side by side in the same product without having any interaction with each other so what I'm uh what I'm going to be talking about is

the intersection of of sorry crypto helping Ai and there's a there's there's a lot to potentially unpack there you can see some of the stuff on this slide I'm going to be talking about the stuff that has the stars in front of it again in in the interest of time and you know two areas that are either getting traction or that we find particularly interesting but um if you um if you think about uh about crypto right at a high level in essence crypto is solving coordination problems right so uh it is a mechanism to align resources so monetary resources uh people and uh compute to create open source uh

software and you can you can apply this this same thinking to Ai and to AI agents in uh in in particular so an AI agent can execute complex work complex workflows autonomously right so you can think of it you may have say you may have seen a chat GPT agent right what it effectively is is you know a bunch of prompts it's it's simplify oversimplifying it but a bunch of prompts like you know package together to do something more complicated right so what what people are thinking is as saai is making progress that you're going to start that that first of all

these agents are becoming more specialized so they're going to be really good at something right and what you're going to see then is marketplaces for AI agents and where AI agents go to these marketplaces and buy the services of other agents to you know do whatever they're doing right and but but go to others for what they are best at and they obviously need payment reils for that and we think it's very likely that that that those are going to be crypto payment reils because of the permissionless and uh trustless nature thereof and furthermore what uh what we also think is that these AI agents are going to be using depins uh for other

resources So decentralized Physical infrastructure networks for for example uh bandwidth uh storage and then finally you've I'm sure you've heard about it that I heard it a couple of times at this conference decentralized compute networks right um so again these are like deepins so uh gpus and and comput is is is in general is the life blot of machine learning and what we've seen is as J GPT Rose in prominence uh that there was soon a shortage of like gpus uh Nidia obviously has has massively benefited from that so what these

project these decentralized compute networks are looking to do is basically crowdsourcing compute from uh from different sources all over the world and then you know renting that out to AI projects right again this is like very relatively high level oversimplifying it but that is something uh so so you know projects like aash and render and i.net been getting a lot of attention um you know over over the last year and and and and more recently because of this doesn't mean that they're necessarily there yet right you can imagine as you throw all these resources from different places and of different types together

uh you know there's some some work to be done there because it for example if if if they're located all over the world it that that's reducing like latency which isn't good so there's a number of problems to be solved there but it's definitely uh a a space that is making grow progress and that people are excited about social fi um as I said formerly uh also known as decentralized social uh which is now kind of like a subset of um of social F now we we all uh we all well most of us probably use social media and we all love to hate social media right uh because they steal our data uh they manipulate us with their with their Al

algorithms and these are uh closed and uh closed sorry closed systems right and what that basically means if you're on Facebook and you leave Facebook you're going to lose everything you're going to lose uh your uh your pictures your posts your contacts so what decentralized social tries to do is to break apart the text stack and uh the the social media text text stack and in particular uh the social graph so the social graph is what houses all your uh your profile your content uh your relationships and the connections between those and that that is really great for

both users and Builders because as a user that means that your data becomes portable and you can take it somewhere else or you can plug it into multiple sources at the same time so the contacts that you have on Facebook you also have them on Twitter and on LinkedIn and right and uh from a uh and and um from a from a builder perspective it means that anyone can build on top of these graphs um and um another thing that is uh that is not that great about traditional social media is that creators really don't get paid a lot you really have to be the cream of the top of the crop like the top like I don't

know five or 10 percent whatever it is that that actually can make a living from that right and these numbers are a little bit old but uh still work to to illustrate that so if traditional social platforms own own over 230 billion of market value creators only earn seven billion now that is a big enough pain point and something that isn't fair that people are going to care if you can offer an alternative system there um so however You know despite all of this who needs like a Twitter on crypto reals just for the sake of it right I mean too painful to to move over there and to start all

over again so what we wrote when we initially wrote about decentralized social about 18 months or maybe it was two years ago is in order to see like meaningful traction with these social decentralized social platforms you need to see Crypt native features that are actually useful to users now and uh we basically we're here uh so welcome to the feature experimentation phase and we basically see two buckets of innovation one is at The Primitives layer the social primitive layer so basically the social graph you may have heard of forecaster forecaster is a social graph uh a

decentralized uh protocol and they also have a front end warp cast but others can also Al built front ends on top of them and um they uh they launched a couple of really interesting features this year that got users really excited and they saw a lot of traction on the back of these features so a very high increase in in users and they just raised $150 million from like all the prominent VCS as a result the second aspect is financialization um so what that does these protocols basically add a tradable component to social activities and uh and profiles which then basically uh

allows uh create and I'll go into that in a minute allows creators to bootstrap Revenue um you know as they as they build out their following and and have enough of a following to um to to to to earn from traditional social media uh resources like sponsorships like uh like subscriptions now frch uh added a token it's a social app uh they decentralized social app they added a token which they called a key to each user and what started happening is that users started trading these uh these these these token these Keys basically speculating on the future

prominence of the userc Creator and um and so so over the course of like just three months frch generated $50 million in platform fees that were split 50/50 between the platform and the uh and and the creators and now you may say like and you you may you may say like well you know you may poo poo that right but if you think about it that type of speculation is it's not very different from what VCS do right so VCS what they basically do when they find for example software companies is they pay for the salaries of the engineers until they

have a proper product that may never happen and they can basically do it on our own right this is kind of like what this is also doing so they they kind of get money from that speculation on you know that they are going to be big that they are going to work and they use that to bridge that Gap until they can stand on their own and um um what is also interesting about about this Money Talks right and a key aspect of of social networks is that things can go viral so the two of these together we think that and combined with the traction that for example foraster has been seeing we think that uh that

decentralized social or social fight that that's going to be a big thing and um yeah you already see some VC money going into that yield metas um in it uh in its Short History uh defi has consistently supported a yield meta now what is a yield meta a yield meta is a uh a source of you know disproportionately high yield so to the tune of like 15 to 20% consistently over a period of time over a large enough pool of capital one billion plus right so that started in during defi summer with liquidity Mining

and then there's been a couple of others you may have conveniently forgotten about anchor which was part of the Terra Luna ecosystem that paid like 20% uh yield on stable coins and everyone wondered why um and uh and then most recently we saw IG layer right and uh and igen layer the IG layer yield meta ended with the launch of the token now that begs the question what is the next defi yield meta and we think we have we think that it that it could be maker Dow and um I'm gonna I'm gonna oversimplify this so uh it's not doing it justice but you can

think of maker da kind of like as a conglomerate right so they have like different products in there uh for example lending uh an Rua and um so what maker is doing uh to Future proof their organization and um they they basically spinning off these products as subd Dows single product subd so there's a lending Dow there's an rwa Dow subd Dow there will be a ton more in the future these are actually of a specific type called allocator Dows and all these uh Dows are going to have a token right so and people that stake assets

in these uh subd Protocols are going to get tokens so that's where you're going to start to see like uh like yield farming traditional defi yield farming opportunity now why we think these yields are going to be Amplified is because we think you're going to see a reating so again the the analogy of a conglomerate maker DA has been trading at at a discount compared to uh rwa protocols or lending protocol protols as these products become like pure plays and you can them compare better to these type of protocols we think that's going to be a reating right so that's going to amplify the yields and therefore we

think that maker da will be the next uh yield meta not Financial advice it may already have played out to some extent um finally um everyone's favorite topic rwas um I I'm assuming that uh everyone here is familiar with it but real world assets AA tokenization rwa protocols bring offchain assets onchain um so asset asset tokenization has obviously fascinated crypto and trafi uh for quite a few years now and this year or over the last 12 months we

we've seen a growth in uh in in tvl I'll talk about that in a second but first of all why now right uh why do we think that you know tokenization is going to be a big thing this year well first of all because we're in a rising uh yield environment and we're we've gotten to a stage where some of these offchain yields being brought onchain are going to be higher than the onchain yields right so uh it's it's just an alternative source of yield on chain and second because some really big and important institutions like black rock with their bidle product and like Franklin in Templeton have been coming on chain and we all know that everyone's going to have fomo about that right so more of these will come on chain and

there's going to be more hype and excitement around it now um and we're talking about so if you think about it a stable coin is is effectively also an rwa right it's it's a tokenized dollars we're not talking here about centralized St stable coins so but if you look at the uh the rwa of uh of of everything else that is uh non at back stable coins um it has grown from about two billion uh a year and a bit ago to like 8 billion right now and so what we wanted to do is we wanted to we were curious to see you know where when you segment it where that money is actually sitting so the way we chose to

segment it is in uh is in two different ways so first of all yield versus non- yield bearing so yield bearing being uh you bring treasury yield for example on chain non-yield bearing meaning for example tokenized gold right or tokenized real estate and uh then second we the second segmentation is by the type of exposure that the end user is having is it effectively a debt instrument or is it effectively an equity instrument so debt instrument being okay so I'm staking assets I'm getting yields and return Equity being um I'm also in addition to yield I'm also exposed to the price movements of the underlying asset so that's basically

what these tokenized funds are doing like superstate and uh and bidle that you see there uh in that corner so what do consumers actually want uh first of all uh let's look at yield bearing rwas before we looked at uh at debt versus Equity so yield bearing rwas hold an 84% share of the rwa tvl and what is what is especially interesting to me about that is when you look at everything that is excluded so there's about a billion two billion 1.2 billion uh that is not

yield bearing and all but 21 million of that is tokenized gold primarily tedar so that only leaves $211 million left 85% of that is tokenized real estate then I don't know the exact percentage but then a whole bunch of is private equity and the rest so I.E only a tiny little piece is everything else um you know possible possible reasons uh you know kyc limitations and also you know if you think about it uh crypto is kind of seen

as an alternative asset right so everyone that's on chain obviously owns probably a lot of crypto so why would they want other alternative exposure to other alternative assets anyway I'm not saying that that's the case but like that's that's what we came up with now finally also my last slide um among the uh yield bearing rwas Deb instruments hold a 70% uh percent market share and um that's primarily driven by uh adoption of of rwas like like May maker Dow and uh and ethena uh potential uh potential causes again kyc flexibility

but also preference for plain yield over uh over a uh over a yielding asset you know it's it's basically a simpler ux and then finally if you think about it that onchain users tend to chase the highest returns even if it comes with with B additional risk then you know you have ethena and you have maker Dao but you also have like normal traditional stable coins right that you can stake somewhere and get a yield so that's also what these Equity tokenized Funds then are competing with as well right so um anyway that was everything that I have

to say uh if you um yeah we uh we we do subscription research so if you're interested in that check it out we do like free s-day trials or so I believe and um yeah thanks for having me