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Returning to our original intention, what kind of DApp application do we need?

Old Fashion Research

2023-09-05 10:34

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Original author: JX, OFR partner

Original title: What kind of DApp do we need?

If you are a rational and objective investor, you should feel that we don’t need more infrastructure projects, at least not at the moment.

The current infrastructure is enough for the next bull market or even the next bull market (if there is one).

In terms of scalability - we have Solana, in terms of legitimacy - we have ETH L2 Rollups and several zkEVMs that will be launched soon; those who pursue decentralization can use the Ethereum main chain; in terms of composability - Cosmos or Polkadot are both good choices.

We have the necessary elements for creating DApps, as well as dozens of Raas or AppChain services that are popular recently. Do you want to build applications or chains? Isn’t it because your infrastructure is not enough or because of the lack of development tools?

But the question is: where are the killer DApps?

In the last round, DeFi saved the cryptocurrency world. The model of AMM Dex + asset pool lending + liquidity mining and various fine-tuning projects based on these basic models can be copied to dozens of new chains to play repeatedly.

Now that new chains have appeared and these DeFi kits are on, what else can you play? Will you still play these three old things in the new cycle?

The emergence of some applications recently has given me a lot of inspiration. Let's dive in:

Meme coins

Meme coins like $Pepe or $Bitcoin(HarryPotterObamaSonic10Inu) are important innovations during the bear market. They have spawned a subculture, with a token mechanism that is more favorable to retail investors than VC-backed projects with valuations of billions of dollars, and the launch of expensive VC coins often means that the chips will be thrown to retail investors.

Of course, some infra projects are also meme coins in a certain sense. If memes like Pepe satisfy the emotional value of retail investors to get rich quickly, then infrastructure "memes" alleviate VC investment anxiety, especially VCs feel that they missed out on investment in large public chains (such as Solana, Near, etc.) in the last cycle, and they have to make up for it by investing in infrastructure this cycle.

Everyone thinks that it is difficult to do ZK because it requires a strong mathematical foundation, but making Meme is not that simple either. In fact, creating a cultural symbol that spreads virally is a very challenging task because there is no fixed template to learn from or apply. To become a successful Meme creator, you must have a thorough understanding of a certain community subculture, such as the degen community and the loser atmosphere, and at the same time be able to design communication materials that catch the community's attention.

In my opinion, Meme coins are the rise of another form of crypto cultural symbols after avatar-type NFTs.

Friend. tech (hereinafter referred to as "FT")

In most industry analyses, FT is often referred to as a social product. However, I think it is a financial product based on the Twitter (or X) social user network. It does not create new social relationships or introduce any new communication modes. Social products should be similar to QQ or WeChat, changing the form and way of communication between people. Obviously, FT has not done this and has no intention to do so.

Based on the first principles, this model can actually be applied to design some new products. In essence, it is to add token incentives to Twitter's social network. In a sense, this is before Twitter itself issues coins (it may never issue coins), the community will give token incentives to Twitter's social network. The recent "Tip Coin" project actually grasped the essence of FT's products and began to emerge in the community.

Telegram robot

The starting point of the Unibot product itself TG Bot is very simple. Many teams such as Uniwhales and Whalesalert may have made similar products before. However, it has improvements in two key aspects:

First, the function captures the rigid needs of Meme traders in the cryptocurrency circle. Unibots has launched some new features, including limit orders, copy trading, and private transaction routing. Although many teams have recently said that they are doing "Intents", Unibots is actually quietly doing Intents services for tens of thousands of requests every day.

Secondly, Unibot’s token design is a little clever. The income is linked to the overall ecological prosperity and the product function. The token distribution is relatively reasonable

Unibots also took advantage of the situation to attract the traffic of Telegram, which is essential for currency users, to make useful products and flow back from TG’s traffic.

What conclusions can we draw from the above cases?

If we regard the three points of product strength, subculture creativity and good token model as a triangle (you currency circle likes all kinds of triangle metaphors the most), successful projects usually have at least two of them. For a project to be able to acquire customers and survive in the long run, it is necessary to have all three elements at the same time.

To take the example above, Meme coin has triggered a subculture craze and has a well-designed token mechanism, but there is currently a lack of available products.

FT's product coin issuance was extremely successful. Although the product UIUX itself has problems, it can be said that the overall product strategy is successful. The product's token model also does a good job for the initial project launch, and there is no new solution for the lack of subsequent motivation. At the subculture level, FT has not yet entered.

Unibots has grasped the product strength and product functions very well, and the token model is also reasonable. However, the users of their own products have not yet formed a cultural sense of belonging to the product, but are more focused on the product and the token itself. How to make users like Unibot, a cultural symbol, is definitely a topic worth studying for the Unibot team.

What kind of products and builders do I expect?

Product and growth strategy: From day 0, you need to think of a plan to acquire users, such as how to use Twitter or Telegram traffic to grow users, how to prevent the product from being blocked by Twitter, how to quickly iterate the product and lower the user entry threshold. I have to say that FT is also clever in this regard, such as using PWA to avoid the trouble of listing on the Apple Store. The product form does not mean that you must create a Twitter plug-in or Telegram bot, but find a suitable way to introduce users of these two largest user groups to the application.

Token design: Design a good token distribution structure to balance sellers and buyers. The token value of the product is linked to the income and value of the product itself, and users who participate at different stages have the opportunity to make money.

Creativity and subculture shaping: The team itself must understand some subculture language symbols and consciousness representations of the community. Pepe and Doge are the long-lasting emojis on Reddit. New Meme shaping and joining, including the creation with the help of AI, are all factors that can be used for growth.

Based on these criteria, I expect more DApp builders to join the DApp building community. I don't want to label it as just another hype word or category. If I have to, I might use common crypto industry terms such as "TwitterFi", "TelegramFi" or "MemeFi".

For other earlier fields, such as the recently hotly discussed on-chain games or autonomous worlds, I am still very optimistic and believe that very successful products will emerge from the community, but it will take time. There are already good signs, and many young and creative developers are active in the Onchain Gaming community. The current problem is that the atmosphere of the small circle is a bit strong. For non-hardcore gamers, especially those who are not familiar with Crypto, the learning curve is too steep.

I am willing to work with the Builders of Onchain Gaming to explore easier and simpler ways to acquire users. Another thing I think is a bit missing is Token design. There is very little discussion about Token design in the Onchain Gaming community, but I think the economic system is an indispensable part of successfully acquiring customers.

The best time to invest in Web3 is - now!

The characteristics of the bottoming out of the bear market in the primary and secondary markets are very obvious. For example:

Many projects that started at the end of the last bull market failed to establish sufficient competitiveness or did not have enough operating funds. They have either failed or turned to other fields, such as artificial intelligence.

The hesitant traditional VCs and investment institutions, who entered Fomo at the peak of the last bull market, basically don’t look at Web3 now, and are scrambling to get quotas for AI projects.

The market already has enough ZK and Infra narratives. Many application developers around me have transformed to Infra. I think this also shows that Infra projects are basically saturated. So how do those big projects that raised billions of dollars at the end of the last bull market issue coins? Is it enough to rely on PUA wool parties to do data? The key point is that more than one project has done this, and there are still dozens of projects that have not issued coins. Each of them wants to suck blood from the secondary cryptocurrency circle. The current cryptocurrency circle is already in the ICU, so where is there so much blood to suck?

Only innovative applications can bring new narratives, new traffic, and new blood.