Call Notes:
What have you seen people doing in the bear market? Anything interesting?
Grant said he finds the bear market is different this time compared to 2017-2018 due to a fair amount of optimism in the space during this bear market. At the TOKEN2049 event, Grant said it felt like the peak of a bull market due to the many people in attendance and the positive atmosphere.
Even speaking to project teams and marketing, people are going on as usual and not letting the bear market affect them, but they are taking their feet off the gas a little.
This is seemingly driven by the way the market bounced out of the bottom in 2018, people have come to terms with crypto being a permanent fixture, and this is just a bear market.
Grant stated due to the silent building and optimism in the markets, people are just poised and ready to enter the market, so next time we see some sort of ‘bottom signal’ or relief, the market will go crazy and make the last bull run ‘look like a blip.’
Where do you think the volume will come from?
Grant believes institutional investors will have their own rails. Still, he believes there will be retail-friendly institutional rails.
GameFi - Grant believes this may be the next major narrative if done correctly. People think the ‘boom’ is much closer than it might actually be. It’ll be a tricky trade for retail traders.
This is due to difficult tokenomics, and they often need more working products at the funding stage so GameFi won’t be a capital magnet in the next run until these problems are fixed.
Several issues limit GameFi - players monopolizing the market from holding the top ranks in a game, long development cycles which burn through capital heavily and retaining a player base.
Grant refers to seeing people set up units of devices rigged to effectively ‘farm’ points on games without player engagement; this has also been done with protocols like STEPN, which is terrible as it promotes less manual engagement, and more ‘cheating’ behaviors to monopolize the earning on a protocol.
Next level of adoption?
Garlam stated he feels regulation and fundamental structure are needed for more adoption. This potential asset class is less volatile and is more reliable for yield that acts as a foundation.
Add a safety net, accountability, and responsibility in the space for security in protocols.
Grant sees regulation as a ‘happy compromise’ that still facilitates growth and gives the market safety.
Also, regulation must be based on the opinions of people/projects in the space to drive it correctly.
How do you do your due diligence on a project? Bad project vs. good project
Grant - when projects start being too outwardly spoken and seen by their communities as ‘gods,’ it's a big sign to be wary of that protocol. Especially with price talk within the community. He sees this as a red flag.
From a profit perspective, you must focus on getting on and off the train and knowing there's a chance of disaster.
Direct forks of projects are red flags as they’re low-level copies without any changes except branding.
Grant talked about creating an editable Google Sheet showing the price and market caps of protocols and tracked emissions to see how much supply is increasing and ‘what market cap will need to be to return to all-time highs - dilution of supply.
This showed people how bad the emission issue is for the price and potential of protools
Grant refers to the success of GMX and people forking it due to its continued success even in the bear market.
Look at projects that stand out in terms of utility and mechanisms
Projects with healthy and strong communities are good.
Excessive use of synonyms to effectively say the same thing in the tokenomics (10% to team, 20% to founder, 30% to development) - this should all just be rolled up into one figure and charted with community allocation.
Not as many giant seed rounds
Bullish flags for projects
Innovating teams
Focused on ‘sticky liquidity.’
Good marketing and community building
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DeFi with Grant from blocmates