The Venture Capital Fund a16z launched its famous report "The State of Crypto", with several indicators showing the scenario of the crypto market at the moment.
They all point to a huge asymmetry between price and value. The report has covered a number of indicators, and I will list some that have caught my attention the most.
The number of active users in blockchain has been growing
Despite the price fluctuations, the number of users active in blockchains only grows - we are at the highest historical high with 15 million active addresses.
In fact, from 2021 to now, we have seen a very relevant growth of use cases in blockchain - Defi, Games, NFT.
Until 2021, the crypto innovation environment revolved around smart procurement platforms.
However, in the last 2 years, we have seen a huge jump in use cases and applications using blockchain technology.
Crossing the "abyss"
To cross the "chasm" of the Rogers Curve and reach the mainstream, we need major evolutions in the market infrastructure that result in a revolution in the User Experience (UX).
Undoubtedly, we have some very interesting use cases that are consolidating their "value proposition" and attracting a larger user base.
However, we are still among the "visionaries", who make up the second group for the adoption of a technological innovation.
To move to the next level, we need more innovation and more adoption.
These innovations include:
- Clearer regulatory environment (which is still uncertain);
- Improve the experience of interaction with portfolios (account abstraction);
- Making smart procurement platforms truly secure and scalable (with the help of EIP-4844, plus increased uptake of second tier solutions);
Which leads us to the third thesis.
Blockchains are moving toward scalability
Today, we see developers seeking multiple paths to achieve scalability and address "generational" challenges in intelligent contract platforms.
The "path of the turn" are the second tier platforms. While 2020 and 2021 saw a lot of development and innovation in blockchains that mainly sought alternatives to EVM, in 2022 we saw a major evolution in the development of scalability solutions within Ethereum's ecosystem - which appears to be the best-positioned technology to reach this new level of scalability.
But the market for scalability of smart contract platforms continues to reinvent itself.
New narratives, such as modularizing blockchains, are gaining traction as new first-tier platforms continue to emerge and promise to revolutionize the market
It's a more innovative environment, and where a lot of crypt development is concentrated, so it makes sense to be where I focus my attention today as well.
In the end, all of this can only be proven to be true if we have a skilled workforce working to solve these problems.
Which leads us to the fourth thesis:
The number of developers in crypt continues to grow
Despite the 70% price retraction over the last cycle, we have not seen a similar pattern in the number of developers active in crypt.
In the last two years, we have had a growth in this number and the scenario of innovation and construction continues to be heated.
This is a standard known as the Price-Innovation Cycle.
High prices attract interest, attract labor, develop usability and the cycle continues to feed back.
And it is this cycle that shows us the asymmetry between price and the level of infrastructure that the market is reaching.
Zoom out!
We're too early.
Price cycles are irrational, but the product cycle is more predictable. We are in a growing trend of innovation and crypto construction.
Moments like the current one expose great asymmetries of price and value, which historically show to be the best moments to expose themselves.
What's important is that we're alive in the marketplace, so that we can capture that growth over the cycles, exposed to the best companies, with the best chance of surviving them.
Long-term focus, quality and survival. Do the basics without reinventing the wheel.
#Bitcoin #Ethereum will bring you many joys
Be part of the new market cycle!
