Research Summary
The report explores the potential of crypto startups, focusing on real-world and crypto-native financial applications. It discusses the rise of stablecoins, the potential of crypto neobanks, and the growing interest in onchain Real-World Assets (RWAs). The report also delves into the potential of under-collateralized lending, privacy in DeFi, and the future of onchain games. It further explores the concept of digital nations, the potential of token incentives in habit formation, and the role of crypto in scientific funding and content authentication.
Key Takeaways
Stablecoins and Crypto Neobanks
- Stablecoin Dominance: Stablecoins have surpassed traditional payment systems like PayPal and Visa, settling over $11T onchain in 2022. They are particularly in demand in regions like Latam, Africa, the Middle East, South Asia, and Southeast Asia, where fiat debasement and censorship are prevalent issues.
- Crypto Neobanks: Crypto neobanks, offering yield on top of stablecoins, are poised to make a significant impact in developing economies. They present global opportunities, especially in underserved segments such as industries that are traditionally underbanked or require cross-border payments.
Onchain Real-World Assets (RWAs) and Under-Collateralized Lending
- Onchain RWAs: Onchain RWAs like US treasuries are gaining traction, providing uncorrelated and often higher yields than crypto-native yields. They make high-quality assets from developed nations accessible to those in developing nations.
- Under-Collateralized Lending: The rise of on-chain reputation systems is enabling under-collateralized lending, a common practice in traditional finance, to become feasible in the blockchain space. Borrowing against future cashflow is a specific application of under-collateralized lending that benefits onchain individuals and organizations.
Onchain Games and Digital Nations
- Onchain Games: Fully onchain games, where both game state and logic are recorded on the blockchain, enable novel behaviors such as smart contract-based players, third-party game mods, and the potential for game studios to transition into game publishers.
- Digital Nations: DAOs (Decentralized Autonomous Organizations) are envisioned to evolve into digital nations, replacing traditional nation-states as the primary organizational structure for humanity. Crypto technology facilitates the establishment of digital nations by enabling encrypted property rights, smart contract-based constitutions and laws, token-based taxation, cryptocurrencies as national currencies, decentralized governance for transparent policymaking, and DeFi for international trade.
Actionable Insights
- Explore the Potential of Crypto Neobanks: With the rise of stablecoins and the potential impact of crypto neobanks in developing economies, there is a need to explore and understand the opportunities and challenges in this space.
- Investigate the Use of Onchain RWAs: The growing interest in onchain RWAs presents an opportunity to investigate their potential uses and benefits, particularly in providing uncorrelated and often higher yields than crypto-native yields.
- Understand the Feasibility of Under-Collateralized Lending: The rise of on-chain reputation systems enabling under-collateralized lending in the blockchain space warrants further exploration to understand its feasibility and potential applications.
- Research the Future of Onchain Games: The potential of fully onchain games to enable novel behaviors and the transition of game studios into game publishers presents an opportunity for further research and understanding.
- Study the Evolution of DAOs into Digital Nations: The envisioned evolution of DAOs into digital nations, facilitated by crypto technology, presents an opportunity to study and understand the potential implications and benefits of this transition.
