The research report discusses the phenomenon of the “wealth effect” in the crypto ecosystem. This effect is driven by user growth, which is spurred by the allure of wealth created by launching new ecosystem tokens. The report emphasizes the relationship between user activity and native token performance, which can help determine which ecosystems and applications have successfully created enduring value. The report also projects the ripple effects of token launches on other layers of the crypto ecosystem.
- Understand the “Wealth Effect”: The allure of wealth created by launching new ecosystem tokens drives user growth. This understanding can guide investment and development strategies in the crypto ecosystem.
- Monitor User Activity and Token Performance: The relationship between these two factors can help identify successful ecosystems and applications, providing a potential roadmap for future investments.
- Consider the Ripple Effects of Token Launches: Token launches can have significant impacts on other layers of the crypto ecosystem, influencing user adoption and market dynamics.