Author: Sleeping in the Rain Source: substack
The ones that impressed me the most were "Inscription" and "Memecoin".
The emergence of hype like these two is driven by "demand" (even if this demand is just pseudo-demand or unsustainable demand) or "Ponzi" (high returns and high capital efficiency, derived from greed).
A commonplace topic: The hype about Alt-Layer1 in the last cycle came from users’ demand for high-performance, low-cost public chains. The emergence of DeFi Summer (Ponzi) has driven users’ demand for Ethereum block space, while Ethereum’s low performance and high fees (demand created) have pushed a large number of users to its competitors.
"Demand" and "Ponzi" interact with each other and are subject to cycles.
For example, the hype of DeFi and Alt-Layer1 is the result of the interaction between "demand" and "Ponzi". GameFi is an upgraded version of DeFi, packaging liquidity mining into games and selling them to on-chain users. But in the end, GameFi did not create new demand (perhaps only game guilds are the only track that benefited from GameFi's hype), and was limited by the hasty end of the cycle. If GameFi successfully creates new demand and a solution emerges at the same time, the bull market may last a few more months.
@cobie calls this narrative hype the metagame.
We also saw a lot of metagames in this cycle, like the inscription and memecoin hype I mentioned above (and some fleeting metagames like modularity and Cancun upgrades/Layer2).
The hype of inscriptions and memecoins is the most popular Ponzi scheme in this cycle. In short, these Ponzi schemes are all about continuously launching new assets and then using expectations to attract subsequent buyers.
The hype surrounding memecoin and memecoin is not unfounded.
I personally think that the hype behind the inscription is most likely driven by miners. On the eve of the halving, miners need to promote the growth of Bitcoin chain activities to increase mining profits. In other words, in the future, as the halving continues, miners need to subsidize mining expenses by promoting the development of the Bitcoin ecosystem. It is foreseeable that a large number of new assets and new ways of playing will emerge in the Bitcoin ecosystem in the future, and new wealth opportunities will also emerge.
And what about memecoin?
A mainstream view is that the reason why the market is keen on hyping memecoin is that market participants are disgusted with and resist low-circulation, high-FDV VC coins.
I would like to add that the memecoin craze is more like the result of the combined effect of "right time, right place and right people": if Solana wants to revive, it needs the wealth effect on the chain. Only when users enter the Solana ecosystem can Solana promote other products (DeFi, mobile phones, Depin) to users. Memecoin is a trigger.
The resistance movement against VC coins has pushed the memecoin hype to a new height.
The Memecoin hype has brought about the need to trade and issue Memecoins, which is why we see the popularity of Telegram Trading Bot and Memecoin Launchpad.
The above is actually a simple review of the past cycle. After looking back, I would like to briefly talk to you about some of my predictions for the future metagame.
The basis of the forecast is to focus on the mainstream difficulties of the industry and the mainstream views of the market.
1. Alt Layer 1 (market hype demand)
Discussions about Alt Layer1 mainly focus on the topic of "Solana successor". On social media, I have seen many opinions that $SUI will become the next Solana. Although this view is a bit crooked ($SUI has a lot of OTC transactions? I am not sure about the details, but the market rumor is like this), $SUI does have the potential to become the next generation of Alt Layer1.
But, my question is, is there something wrong with Solana?
At present, there are no major problems (similar to Ethereum in the last cycle). Although Solana occasionally has some lags and downtime, it does not affect user use. Solana’s current dilemma is that the market is tired of the hype of Solana memecoin - there is no hype expectation without sufficient wealth effect on the chain. Pumpdotfun has promoted this situation to a certain extent.
There is currently no indication that $SUI will be able to take over for Solana.
I personally believe that the core of a chain is developers, and the ecosystem is the basis for attracting and retaining users. Solana has captured a large number of developers in the last cycle, and has left behind a lot of on-chain infrastructure, which is the basis of its success, while $SUI does not yet have that.
$SUI's competitors include Fantom, $SEI and other chains. $SEI has seen a lot of fundamental data growth recently (the expected airdrop drives data growth), which may provide fundamental support for possible unlocking and pulling in the future. Fantom also provides airdrops for Sonic chain users. Although they are all following the old path of predecessors, they are indeed effective in the short term.
Let’s talk about other chains.
Avalanche is targeting enterprise-level adoption (subnets) and RWA. Market expectations for RWA will decrease as interest rates begin to fall, and we have to question enterprise-level adoption. Avalanche's hype is not about the number of users, but about market attention. The means of attracting market attention can be to frequently release positive news to raise market expectations.
An important difference between Berachain and other chains is that PoL is very obvious to users. It will promote users to play games with validators and project parties at various levels, while the consensus mechanism innovations of other chains are not felt by users. Users may only think that this is another faster and cheaper Layer 1. This is also a fun point of Berachain. In addition, Berachain's community is doing well, so it is foreseeable that after the Berachain mainnet is launched, the topic and market attention will not be less, and PA will be affected by this.
2. Liquidity fragmentation (real market demand)
In my opinion, there are only a few solutions to liquidity fragmentation:
Chain Abstraction/Intent Abstraction
Shared Liquidity
Cross-chain/interoperability
No matter what abstraction it is, the simple understanding is: create a front end, and users only need to use the products of various chains seamlessly on this front end to achieve their intentions. The launch of Uniswap v4 may be an opportunity for such infrastructure hype. However, the real large-scale hype may still have to wait until liquidity & users enter on a large scale (mid-to-late bull market). To put it bluntly, the chain is not active enough, and the number of users determines the scale of demand.
Shared liquidity is literally what it means, putting all liquidity together and providing liquidity for other products. But shared liquidity cannot solve the problem of user experience. The demand for such products is often reflected on the B-end, not the C-end. I personally find it difficult to see the possibility of hype for such tracks - unless the fundamental data is good + basic market cognition is built + large-scale CT shill for a certain project.
I won’t talk about cross-chain, as many people are already talking about it.
3. Buy BTC and hold BTC (real market demand)
In this cycle, we may see a shift in the trend from "institutional buy + hold" to "national buy + hold". Then trading venues may become more important as such demand drives them. Related targets include $BNB $COIN and so on.
In addition, we have seen more countries holding BTC through mining, and speculation on energy-related targets is likely to occur (the timing cannot be predicted).
4. AI (market hype demand)
We have seen AI hype many times. OpenAI's continuous innovation and Nvidia's financial reports have given the market ample hype expectations. I personally believe that the key to AI hype lies in the trading venue. AI targets traded in venues with sufficient liquidity have greater potential than other targets. The quality of the trading venue also depends on the background of the corresponding target.
5. New Ponzi
The gameplay of the new Ponzi is hard to predict.
At present, the market's attention is still focused on memecoin and BTC ecology. BTC ecology is strong, while memecoin is relatively weak. In this cycle, everyone is keen on hyping newly issued assets, but Ponzi like DeFi and GameFi have not appeared. One day, the market will get tired of hyping new assets and focus on projects with real income, such as $BANANA, or projects with full circulation + strong fundamentals, such as $UNI $LDO.
VI. Final
Metagame is a concept I borrowed from Cobie in 21 years. As for the hype that may appear in the future, I am also in the dark. Before the signs appear, no one can clearly predict where the next narrative opportunity will be.
