VirtualBacon: How To Position For The Next Bull Market (Post-CLARITY)

Transcript

I wonder if L1's are going to perform ever again like they have in the past and and I'm not sure. I'm just not sure. >> Well, so I think going to the revenue side is definitely a very easy conversation and you're not going to find most protocols and most tokens having those anywhere close to the ratios of revenue that hype generates, lighter generates and even like units on top of hype. Like you can look at very very simple layers with very high revenue and if those launch tokens it's going to be very very strong. But I do think the so-called fat protocol

thesis has been talking about all of the attention and all of the users will be on those layer ones. And ultimately like what drives the value of of tokens, right? It's how many users you have before this revenue phases. How many users you have, how many people are willing to bet on them when the market is good thinking that they can go up and I think in a way how many people can trade it through certain exchanges. So that has always been Ethereum since the beginning because of ICOs, that's the place to tokenize anything and then it becomes Solana a bit and then different L1s but ultimately still EVM.

So in this upcoming cycle there's the revenue stuff and then I I think there's going to be a like a digital commodity narrative to replace kind of the layer one because the way I see layer ones, why were layer ones so popular? They all wanted to copy Ethereum and Solana. >> Yeah. >> In order to be tradeable on the right exchanges and to last one to two cycles and they are getting to that stage now.

So after clarity, after we have this whole framework of um the 16 tokens being digital commodities and more to come through this graduation framework, we probably will see more layer ones, and it's going to be a race of which layer ones become comparable to the existing basket, and then which um memes and which uh digital collectibles become comparable to the CryptoPunks and to the um Doge and Shib and uh WIF. Those are the three in the ICC's rulebook.

Um that's going to be like the old days of um which coins did Binance list as a layer one, and then these are one These are the ones that are going to come next. >> Interesting. So so you're placing a lot of value on that on that um I guess it was like notes that came out of the SEC about which assets are digital commodities, etc. >> Yeah, there are there are some solid offer in there. Um the SEC specifically named uh those three memes and a bunch of um layer ones.

Uh and they really like like ENS uh NFTs, CryptoPunks. >> Yep. >> Um what was it? Chromie Squiggles, I think. And um >> goodness. >> Yeah, and uh some >> year is it? >> [laughter] >> I I don't know, man. >> Um okay, so so so clarity for you is going to provide a lot of that, you know, no pun intended clarity for investable assets. How do some of these assets, right, that you know, um have massive institutional adoption use cases, but have tokenomics that are still kind of like um of obviously [clears throat] they're just not at the same level of some of these on-chain uh revenue-based protocols, right? You

think of like uh Oracle infrastructure, you think of like uh really important um uh designs for bridging and for cross-chain and for uh designs for security or you know, things like launch pads like there's like this whole cohort of like this like you've got the blockchain layer like the most bottom layer of the L1 and then you've got like the application layer and you've got all these different types of applications. And then there's like this whole like stack in the middle of all of this infrastructure that has been invested anything from ZK to bridging to oracles to cross-chain to anything in that middle stack and that's all been kind of like re-rated a lot lower and people

have just kind of like seemingly forgot about those assets and those protocols although they're like continuously proving their importance to building this kind of on-chain economy. What's your what's your read on that, you know, stack of middle infrastructure? >> So, I think the one to look at is Chainlink. Uh Chainlink is the only one that's not a layer one or a POW like commodity or meme that's on the list that technically is a token but has enough utility first of all where it uses the LINK token to pay for gas and pay for transactions and you have to become a validator by

holding LINK. Um but also it's like core DeFi and now core cross-chain oracle tapping on all of it. And they're the oldest to do it. So, technically the track world loves LINK and it has been proven like they will be digital commodity after clarity. So, anyone else who come you better hope that you can become the Chainlink level of of middleware. Um otherwise it looks like it's pretty difficult. It's easier to to just be an L1.

Uh there are a lot of L1s on the list. It's very hard to be the the dominating middleware layer.