If you haven’t been around for a while, it’s hard to fully appreciate how quickly narratives in this industry can change, especially when you’re trying to catch up. Trends get old, memes get boring, and it’s fair to say that this year’s frenzy is currently feeling the pressure of Bitcoin’s fading momentum.
While it might be easy to write it off as a temporary setback caused by a typical bull market correction, strong underlying currents are working against the popular expansion narrative. As that tide recedes, it’s becoming a bit harder to ignore those swimming naked.
Is the airdrop process finished?
If it wasn’t already clear, recent projects proposing to “build on Bitcoin” have so far been more associated with opportunism than innovation. Yes, BitVM and the arrangements sparked real interest and creativity, but the follow-up left a lot to be desired. This has happened, in large part, because of lazy operators. Instead of doing actual engineering work, every third-tier entrepreneur in the industry simply took the Ethereum playbook and ran with it on Bitcoin.
I made a case in my last article as to why this standardized cottage industry left Ethereum in a worse state of wear and tear from a scaling standpoint, but recent developments have highlighted just how mismatched the economic incentives are.
Of course, the barrier to this infrastructure arms race was the ability of the coin’s promoters to print tokens as if they were going away. Unfortunately for them, this trend is beginning to decline in relation to these schemes. You may remember how everyone eventually moved away from ICOs after Dentacoin raised billions of dollars. Something similar is happening now.
Just a few months ago, I explained how the idea of dots beat the airdrop token meta. Alternative execution layers were popping up left and right, announcing the opportunity to collect eventual rewards in exchange for liquidity on their networks. The premise was simple enough: users would be incentivized to use apps in a particular pool or contribute assets to its trading pools. Once the chain launches, tokens will be allocated to a semi-random group of eligible participants. The idea was that this would increase their alignment with the protocol and its future.
It turns out that exactly the opposite is happening. Over the past week, a few highly anticipated symbolic airdrops have highlighted the absurdity of this approach.
How do you verify a user’s identity in a pseudonymous system? You can’t. The inability to do so creates an opportunity for any actor to be able to impersonate any number of users. Unsurprisingly, the actors are well-capitalized. I quickly caught on to the trick. And they were too busy exploiting it to their advantage. Instead of users, airdrops have attracted mercenaries who loot every new tier they can get from their wallets.
You may be wondering why I’m writing about tokens in a Bitcoin article. Consider it simply a reminder that any proposal or layer for Bitcoin scaling that involves tokens should be avoided at all costs. Aside from the fraudulent nature of the assets, this evidence is a clear sign of projects that are behind the curve, even by Ethereum standards. I don’t care what technology they claim to be working on, nor should I care about their execution environment or proof of no knowledge. The window is closing for them and we can expect them to scam their “users” at every turn to cash in on any remaining liquidity for this scam. Stay away.
Ethereum Identity Crisis
the Bitcoin layers The platform reported yesterday that more than half of Bitcoin’s current scaling proposals were planning to use Ethereum’s EVM as a technology platform. I don’t know what to do with this number. It may be generous to link any of these proposals to Bitcoin, but the market is clearly interested in exploring the idea.
This is especially important given the volatile state of Ethereum right now. Don’t call it a civil war yet, but some battle lines are being drawn and the outcome will be telling for the roadmap centered around accumulation. I’ve previously outlined the state of the Ethereum network’s sharding. Suffice it to say, things are escalating rapidly, and the project is once again facing serious debate and introspection.
On the one hand, a group of developers advocates Dedicate assembly operations In the Protocol to Promote Economic Activity Improve user experienceAnother group is Raising questions About the initiative you claim it will do Further centralization of MEV extraction It affects resistance to censorship. It’s looking increasingly like Vitalik may need to pull another rabbit out of his hat.
Besides the fatigue caused by the commodification of EVM execution environments, the previously celebrated normative thesis is She was starting to look a little weakAt the very least, it seems the original plan is no longer valid, and the narratives are starting to change again.
This could be better timed for Bitcoin’s emerging layers that are starting to look pretty old by industry standards – and haven’t even launched yet!
exhausted meme
You’ll never find me pessimistic about memes, but they move in cycles and the latest version has lost some of its spark. While I’m not ready to call this new meme the top, it’s another example of Bitcoin’s new layers being late to the show. Without dog and cat tokens, what market would there be for all the infrastructure being built?
The ground is shifting under the feet of a new generation of Bitcoin builders. I suspect that those who decide to take the longer route of actually putting in the effort will have a better chance of getting to the other end of this bull market. Doing so will require learning valuable lessons from experiences on other sides of the pond. Patience appears to be essential given the rapidly evolving situation.