Powerful narratives can propel projects to extraordinary heights, making it crucial for investors to identify and understand emerging trends. In the crypto space, narrative plays a crucial role in a project's success and profitability. Narrative, in this context, refers to a project's ability to capture and maintain attention over time. Cryptocurrency markets are largely driven by sentiment and attention, which is why popular narratives often emerge during bull markets. When influential figures in the crypto community begin to promote a particular concept or project, it can quickly gain momentum and become a dominant theme. As we approach the period Raoul Pal has coined as the "Banana Zone," opportunities for significant gains may become increasingly scarce. For example, the AI-related token AIZO recently experienced a 50% price increase in less than a week, moving from $0.40 to $0.60. While past performance does not guarantee future results, some analysts predict AIZO could reach new all-time highs over $5. Many experienced cryptocurrency investors believe that the three most substantial narratives for the upcoming bull market will be Artificial Intelligence (A.I.), Real-World Assets (RWA) and Decentralized Physical Infrastructure Networks (DePIN). It's worth noting that while meme coins have gained significant attention from retail investors, they generally lack utility and don't attempt to solve any problems. Their popularity is largely driven the get rich quick bug.
The Potential of DePIN
Among these narratives, DePIN appears to be relatively underappreciated. This sector focuses on building decentralized infrastructure for applications like mapping, data storage, and IoT. Beyond the buzzword, there's limited discussion about the groundbreaking projects in this sector that aim to decentralize Web3 infrastructure. Some notable DePIN projects include Hivemapper, Dimo, Flux, GeodNet, Swarm, Presearch, and Deeper, to name a few. Many of these projects are not only generating revenue but also turning a profit. However, investing in individual DePIN projects carries risks like any other token. However, their success depends on widespread adoption of the decentralized infrastructure solutions they offer.
Investment Strategy
A potentially less risky approach to investing in the DePIN narrative is to focus on the foundational Layer 1 platforms that support these projects, similar to the "picks and shovels" strategy used in the early days of the gold rush. This strategy involves investing in the underlying infrastructure rather than individual applications, which has historically been successful in various industries.
The Choice
When considering DePIN-focused Layer 1 platforms, two primary options emerge, Peaq Network (the new shiny object, an emerging platform) and IoTeX (an established player with a longer track record). IoTeX has a total supply of 10 billion tokens, with 9.4 billion currently in circulation, which suggests minimal risk of future sell pressure from token unlocks. In contrast, Peaq Network has a total supply of 4.2 billion tokens, with only 132 million (about 3%) currently in circulation, indicating potential for future sell pressure as more tokens enter the market. We are well aware of the low token availability, yet high market valuation of these new, shiny projects. Not to disparage Peaq Network, but they need some time to cook. Iotex has already been through the fire of several bear markets and they are still here, thriving. The choice is yours.
