Sustainable working models for 2020+
In startup world there are few standard excellence metrics:
— MAU / DAU / number of active users
— GAAP revenue
But for crypto systems it isn’t easy: tokens are neither debt or equity and in not rent seeking models there is no revenue in traditional sense.
“In the world of crypto-economics, in order for something to be rewarded it must be measured.”
How to measure traction then?
Things with bright future 2020+
1) Stablecoins
CDP holders are currently paying 3.5% per annum in stability fee in order to create DAI. And demand for DAI issuance isn’t stopping.
Possible winner: MKR token
2) Custodian / Non-custodian lending
The custodian exchange is almost like a bank, technically it doesn’t take deposits the same way bank does but for many practical purposes exchanges are like banks and cryptocurrency is like SWIFT / clearinghouse network.
But banks are paying you interest for deposits, while exchanges are only making you pay their fees. It will change as exchange is able to generate revenue not only from trading fees but also from lending crypto and fiat to leverage traders. Some exchanges started paying interest:
Possible winners: BNB tokens
3) Shorting volatility
Prediction: market making will be more accessible and cryptocurrency volatility will decrease as markets mature. Speculators love volatility but in order for cryptocurrency to be widely used as money some stability is required.
How it will work?
People depositing tokens and ethereum to Uniswap are essentially creating financial product with payoff similar to short straddle option.
Short straddle is profitable when price isn’t changing too much in either direction. It’s speculating that price next day will be similar to price today (while collecting option premium and in Uniswap case trading fees)
Possible winner: Uniswap / ETH / DAI
4) Token Curated Registry
Token Curated Registries are both overhyped and underhyped:
- Creating massive ICO to bootstrap TCR is bad idea
- When starting from scratch TCR token price may only increase reflecting organic demand
Token Curated registry is providing something useful to customer while making it at almost zero cost:
There are multiple failed projects that tried to fight Google / Facebook quasi monopoly on feed / content curation: it’s still idea worthy to work for.
It’s funny, though, that it’s often very easy for an outsider to predict these kinds of shifts in processes, because they have no vested interest in the status quo and are evaluating everything with fresh eyes.
As a kid growing up with computers in the 90’s, I knew IBM was doomed. Why? Because buying an IBM-brand PC when a clone cost 1/2 the price and did exactly the same stuff was ridiculous, and Microsoft owned the software you actually used (and had to make sure all your apps were compatible with). Older folks would tell me “Well, IBM makes most of its money selling to enterprises, and they can charge millions of dollars for a computer” and I’d be like “Why would you do that when you can buy a PC for a couple thousand and hire a high-school kid to program it for you?” and they’d mutter something about transaction processing and customer support and how nobody got fired for buying IBM, and I’d be like “That’s stupid. Their customers are all going to go bankrupt, and then IBM will too.” I was a pretty insufferable teenager, but I was right about a lot of that.
I’m 37 now, I’ve lived through four generations of technology (PC, web, mobile, and cloud) and retrained for each, and I find I need to make a conscious effort to try and see everything through college-student eyes. If I were a new grad just coming out of school, how would I evaluate the world? And I try to keep that in mind whenever I read eg. a thread on crypto here. The total volume of all data on the Ethereum blockchain is roughly what I would process in 10 minutes with a small MapReduce when I was working at Google. But it’s very likely a college student today would be like “So? What’s the point, when nobody trusts the answers you give them because you’re just a giant corporation that keeps all your data secret?”
Source of quote: https://news.ycombinator.com/item?id=17396178
Summary
Projects that will work in 2020+:
- MKR stablecoin
- Compound / Dharma money market
- Binance coin ( utility of BNB coin is questionable as the coin is used mainly to distribute project revenue via buyback & burn yet it’s Uber-like approach to regulation & growth will probably succeed )
- Civil tokens ( assuming they will be able to onboard thousands of newsrooms )
- Base layer currencies (Ethereum / Bitcoin)
