Ignas: The Current Market Lacks Genuine Innovation, Addressing the Potential Innovative Forces of Communities, Predictive Markets, and Gaming Projects in the Future
Cryptocurrency researcher Ignas believes that there hasn’t been any real innovation in the market recently, and relying on memes and airdrops cannot sustain industry growth in the long term. Ignas points out several potential innovative projects and areas, including community, prediction markets, and gaming projects, and hopes to see these projects drive market growth in the future.
This article is compiled and translated by Chain News. If there are any doubts, please refer to the original article. (This article is not investment advice)
Lack of innovation leads to stagnant growth
No more Layer2!
The bull market of 2021 seems to rely only on memes and airdrops
Will we see real innovation next?
What are the protocols that have a better chance of innovating?
Are there any innovative protocols that have already emerged?
Super applications are needed now to attract new users
Ignas is tired of seeing another L2 launch, where the token’s fully diluted valuation (FDV) can reach as high as $5 billion.
Recommended reading:
Are new tokens this year generally low in circulation and overvalued, leading to long-term price instability?
Recommended reason: This article clearly explains the abnormal issuance phenomenon of new project tokens in this bull market (this year): high valuation and low circulation, which is likely to lead to long-term price declines, echoing the content of this article.
Many people, including himself, are already bored with another Uniswap, Aave, or Liquity fork on these new L2s. Users are no longer excited about buying another infrastructure protocol with false high valuations because these protocols lack innovation and essentially provide zero value to tokens.
What the market needs is innovation! But where is it?
Ignas really enjoyed the positioning of the bull market in 2020-21 because it was a perfect storm: due to the COVID-19 pandemic, governments had to print money (external catalyst), and people were speculating on NFTs, participating in DeFi yield farms with returns of up to 1000%, engaging in Metaverse and playing Axie Infinity or other Play-to-Earn games.
At that time, there were many innovations in the crypto field that kept users engaged.
But this bull market has been boring so far this year. There hasn’t been any real innovation. In order to turn this bull market into a supercycle, Ignas believes that strong internal innovation (at a macro level) is needed to attract retail investors and maintain market entertainment and attention.
Currently, due to the lack of innovative investment targets, most market participants simply hold BTC, ETH, SOL, and try to accumulate tokens or speculate on the next popular meme coin.
However, without any special advantages, the opportunity to make money through meme coins is not great. It is mostly Key Opinion Leaders (KOLs), market makers, and studios who are taking advantage of naive retail investors. In addition, token incentives are a downward trend because rewards usually depend on deposited funds and trading volume, leading to a game where the rich get richer, which only benefits the whales.
The BTCFi of Ordinals and Runes is indeed an innovation/narrative in this cycle, but due to technical complexity and a lack of clear value proposition, even the technologically savvy Ethereans and Solana degens are not very interested in it.
(Solana memecoin platform Pump Fun suffers private key theft and flash loan attack)
So, what innovations can bring back the retail frenzy in this cycle?
Now there is a real need for something new to revitalize the market and attract a large number of new users, and (unlike most meme coins) really allow users to make money. It is difficult to predict what the current cycle’s NFT/P2E will be, but Ignas believes it will be the next generation of consumer applications.
Let’s take a look at the current popular protocols to see if there are any clues. On May 7th, four new social applications briefly entered the top 15 in terms of gas consumption:
Fantasy Top
Friend Tech
Pump Fun
YOLO Games
Although the user numbers of these protocols are still small, with no protocol having more than 20,000 daily active users, from a monetization perspective, these protocols represent new entry points for crypto-native business models at the application layer.
Ignas is not interested in Blast L2 because it is just another L2 that allows users to earn points. But Fantasy Top got Ignas to join Blast. Fantasy Top allows users to predict the involvement of Twitter KOLs through card trading in the community.
The second protocol is Friend Tech, which briefly achieved innovation by creating small broken circles through social protocols, but it didn’t last long. Friend Tech is currently at a crossroads of reshaping itself.
Pump Fun is a great tool for creating meme coins. Pump Fun has found a great Product-Market Fit (PMF) as a platform in the current market.
YOLO Games is primarily based on speculation.
In addition to the protocols currently ranked in the top 15, Ignas also points out several protocols that he sees as having the potential to drive market growth through innovation.
First is Polymarket, which is a prediction betting market. Vitalik has praised Polymarket multiple times for allowing users to focus on specific topics and current events. In fact, Polymarket just raised $70 million from Vitalik and Peter Thiel. Ignas wouldn’t be surprised if they launch an airdrop soon.
During the speculation frenzy of the ETH ETF approval, Polymarket had about 2,000 daily users. Although the number is still small, there is great growth potential.
Another protocol with potential for innovation is Farcaster, which is a true zero-to-one innovation that combines the best of what social media (Twitter) offers with cryptocurrencies. It combines social interaction, payments, and financial transactions, which could become a super-crypto application in the future. It’s good enough that if Twitter suddenly disappears, all crypto users can immediately migrate to Farcaster. On the other hand, in February, when DEGEN tokens were airdropped to early users, Farcaster also experienced tremendous user growth, reaching 59,000 daily active users.
Lens Protocol is also a very promising social protocol, with over 19,000 users using it every day. Although the user base is smaller, Lens is actually the only social protocol that stores user content and identity on-chain. Lens announced its move from Polygon PoS to one of the zkSync rollups, which is a huge loss for Polygon.
Recommended reading:
Lens Protocol launches hybrid network Lens Network to improve efficiency and maintain decentralized social interaction
Recommended reason: This article clearly explains the development roadmap of Lens Protocol in recent years, including Lens Network, adopting the Volition hybrid architecture, and transitioning to the ZK Stack for rollup architecture, providing a clearer understanding of the content of this article.
Lens has its own meme coin, but Ignas is very confident that Lens will eventually launch the LENS token airdrop, although he is not sure about Farcaster.
In addition to the above three protocols, Ignas also points out the integration of Telegram and Ton and new crypto games as potential opportunities, not to mention the potential for innovation in Gamefi.
The market is currently stagnant, and it seems that there are no more new topics. Even the author feels this when writing articles. It seems that apart from the hype around tokens, new Layer2 networks, Ethereum spot ETFs, and meme coins, there is nothing else to write about! It is indeed a feeling that the crypto market is indeed lacking innovation, which will not sustain the market’s growth and may even face decline.
The next cycle needs more successful consumer-oriented applications
Ignas believes that the real innovation of the next cycle is likely to come from consumer applications, which will attract mainstream users outside the crypto community and have the potential to drive new applications at a macro level. He points out several potential projects, and it is indeed worth exploring and looking forward to whether the market will eventually develop as he described.
Fantasy Top
Farcaster
Friend.tech
Lens Protocol
Polymarket
Pump Fun
