Source: TradingView, CNBC, Bloomberg, Messari
Why Aren’t We Getting More Announcements?
The digital assets market continues to rally, posting a third straight week of nearly double-digit weekly returns. As such, sentiment continues to improve along with price. It’s always challenging to determine if the price follows the narrative or if the narrative follows the price, but based on the lack of recent events other than the FOMC 50 bps rate cut, it appears that the latter is more accurate right now. The increased bullish narrative seems to be stemming purely from price gains.
For example, the recent Token 2049 conference in Singapore was hailed as a great success. High attendance, great side events, and a lot of “buzz.” But I’ve read every recap of 2049, including the one from our own Arca attendee, and I can’t decipher what everyone is excited about. Most of the themes, narratives, and announcements that emerged from the event are the same ones we’ve talked about for the entire year. Now, that’s not to say that these aren’t important. They most certainly are. But in an industry that has historically been marked by its speed in innovation and shortened product and business life cycles, it’s a bit underwhelming.
For example, from StoneX and Messari’s recap on themes (paraphrased):
- StoneX: “Three dominant themes emerged: Decentralized Physical Infrastructure Networks (DePIN), memes, and the growing role of AI in the crypto space. These represent different points along the spectrum of blockchain innovation—DePIN replicates traditional Web2 businesses with real revenue, memes focus on owning culture and community, and AI brings a new layer of computational power to the ecosystem.”
- Messari: “The rising momentum of both DePIN and Crypto x AI over the last year and a half continued in Singapore. AI had over 119 related side events, and DePIN had at least 60 dedicated side events throughout the week. DePIN and Crypto x AI are tackling problems across the board in Traditional Physical Infrastructure (TradPi) and Web2.”
This is all true, but the same thing could have been written in January.
- Sui’s (SUI) announcement of a partnership with MoviePass and the incorporation of USDC on the network. Sui is also now taking pre-sale orders for its SuiPlay0X1 handheld gaming console, previously teased in April.
- The Open Network (TON) continued to attract attention at the conference after unveiling its collaboration with the ride-hailing application Tada (prevalent in Southeast Asia) a few days before the event. This highlights the potential utility of Telegram Mini Apps and TON’s expansion among L1s in the crypto ecosystem.
- Solana (SOL) Mobile introduced its second-generation smartphone Seeker, the successor to the Saga phone, which is scheduled for a 2025 release and is now open for pre-orders. Solana also seems to be courting more RWA projects for its platform, with Franklin Templeton announcing plans to launch a money market mutual fund on the network akin to its offerings on Stellar, Arbitrum, and Polygon.
This also seems a bit underwhelming relative to past big announcements at conferences, which focused more on consumer-facing products and launches.
From Arca’s own Director of Research, Katie Talati (paraphrased):
- Bitcoin Layer-2s and DeFi are heating up, and fractal side chains are doing quite well.
- DePin is still a favorite for attracting the next 1 million users, but people are becoming skeptical of Renders/Akash-type projects that just provide computing and are looking for more interesting use cases (e.g., Geodnet, Dimo).
- Restaking isn’t something many believe in as heavily anymore, and they tend to think that demand for AVSs just won’t be as great to justify such a large valuation
While this is just a small snippet of Katie’s internal recap, the lack of detail is surprising (for those who don’t know Katie Talati, her recaps are usually incredibly in depth with a lot of nuance).
Given the strength of the recent rally and the 180-degree sentiment shift, I guess I’m just left scratching my head at what specifically sparked it. Then again, it was only a month ago that we were discussing how
crypto was lagging other risk assets and that a
rally was inevitable. So, if you’re keeping score at home, I was surprised when crypto failed to rally a month ago and equally surprised when we actually did rally.
But that’s just one of the best parts of being a crypto investor – the innovation and growth is constant, and we don’t always know which parts of the industry will bloom at a certain point in time, nor do we always know when the market prices will match the growth. Nothing comes totally out of left field, but you still never really know when it is going to catch fire. So while the recaps from Token 2049 are maybe a bit uninspiring in terms of what is in focus right now, inevitably, what we’ll be talking about in 6 months was likely very present at Token 2049.
Hivemapper (HONEY) Is A Really Easy, Awesome DePin Project
I recently installed a
Hivemapper device in my car. For those unfamiliar with Hivemapper, it is one of the most intuitive DePIN projects that have been created. Hivemapper is trying to recreate Google Maps, meaning it will be a great consumer-facing application, while also providing enterprise level data to other industries (Trucking, navigation, logistics, etc).
The DePIN aspect, in layman’s terms, is simple. While Google had to pay its own employees and build its own technology to map the universe, Hivemapper is outsourcing the mapping by paying out HONEY tokens to everyday people who drive their cars. Said another way, if you drive (and most people do), you can become a quasi-equity holder of Hivemapper (via HONEY tokens) simply by installing the device. And if Hivemapper is successful, then the HONEY token will be worth more, and your equity will grow. And it’s more likely to be successful if more people buy the devices, ensuring that the mapping data will be more robust than anything created by single companies and their own cars/drivers/maps.
After buying the device, it really took 3 minutes to start earning HONEY tokens:
Step 1: Install the mapping device on my windshield (literally plug it in, and stick it to my windshield)
Step 2: Download a Phantom (Solana) wallet on my phone, and link the wallet to the device
Step 3: Drive my car (thank you 150 miles worth of California driving to/from baseball games this weekend for my 11-year old)
There are plenty of interesting DePIN projects, but this is probably the easiest and most intuitive to understand. If you drove for Uber, you didn’t get equity. If you delivered food for DoorDash, you didn’t get equity. You didn't get equity if you were an early Amazon Prime member. If you have millions of Sky miles on Delta, you didn’t get equity. But if you help build the digital map of the world for Hivemapper, you basically get equity-like upside via their HONEY token. Now, every legal expert in crypto will argue that this is not equity, and every regulator will argue that this means that HONEY is a security. But intuitively, without getting into the political, regulatory or legal weeds, that is what is happening. The users and creators of a new company are the ones being rewarded if it succeeds.
That is why I love crypto and believe that tokens are the greatest capital formation and customer bootstrapping mechanism ever created. Turning customers and users into quasi-equity holders is just a better way to build networks and reward those responsible for their success.
