Research Summary
The report discusses the role of “degens” or early adopters in the crypto space, comparing them to early internet users. It argues that these risk-takers are essential for the development and testing of new crypto technologies and systems. The report also challenges the perception that crypto is purely speculative, highlighting its use in cross-border payments and other practical applications.
Key Takeaways
Degens as Early Adopters
- Role of Degens: The report argues that “degens”, or early adopters in the crypto space, are not fundamentally different from early internet users. They are the risk-takers who are willing to try unproven products, thereby playing a crucial role in the development and testing of new crypto technologies and systems.
Crypto Beyond Speculation
- Practical Applications of Crypto: The report challenges the perception that crypto is purely speculative. It highlights the use of crypto in cross-border payments, with examples such as a Nigerian student in Turkey using USDT to send money home. It also mentions the growth of crypto neobank and remittance startups in Latin America, Africa, and Southeast Asia.
Stablecoins and Degens
- Stablecoins Bootstrapped by Degens: The report points out that even stablecoins, which are now used for practical applications like cross-border payments, were initially bootstrapped by degens. Early use cases of USDT and DAI involved cross-exchange arbitrage and leveraged trading, respectively.
Crypto Adoption Worldwide
- Global Crypto Adoption: The report cites a Chainanalysis report that ranks India, Nigeria, and Vietnam as the top three countries by crypto adoption. It also mentions a BH Digital report that states $14 trillion worth of stablecoins settled onchain in 2022, surpassing Paypal.
VCs and Degens
- VCs’ Attitude Towards Degens: The report criticizes venture capitalists (VCs) who deride degens and speculation in the crypto space. It argues that these VCs are overlooking the crucial role that degens play as early adopters and testers of the very systems that the VCs are investing in.
Actionable Insights
- Recognize the Role of Early Adopters: Stakeholders in the crypto space should acknowledge the important role that early adopters or “degens” play in the development and testing of new technologies and systems.
- Look Beyond Speculation: While speculation is a significant aspect of crypto, it’s important to also focus on its practical applications, such as cross-border payments. This could involve researching and investing in crypto startups that are working on such applications.
- Consider the Global Picture: Stakeholders should consider the global adoption of crypto, particularly in emerging markets like India, Nigeria, and Vietnam. This could involve exploring opportunities in these markets.
