Dragonfly reposted this
Unsurprisingly busy past week in London at the Blockworks Digital Asset Summit, with one of the most diverse crowds they've ever hosted, including tradfi execs, crypto native entrepreneurs, investors, traders and everyone in between. I came away with a few major takeaways 👇 : 1/ Tokenization is THE major focus for many of large institutions, but it's still unclear where the demand is going to come from. There is not enough on-chain demand to sustain these products, especially in lower interest rate environments, so companies are betting on the market getting MUCH bigger (which the employees of these places are dubious about) or the back office expense savings being large enough that you don't need on-chain demand but instead just closed looped existing systems 2/ Stablecoins are crypto's killer real-world use case, but the tradfi institutions feel hamstrung by the US/EU governments and are at a loss for how to bootstrap their offerings (See PYUSD still sub $200mm and doing a lot of DeFi native BD) 3/ Interop and better UX is needed for mass adoption (no surprise) 4/ Derivatives both on and off chain are going to continue to have outsized growth relative to the market. As the space institutionalizes there is more demand for leverage and complex hedging products - options stands to be a large gainer here 5/ Memecoins and speculation continue to perplex people, but it's still on the top of everyone's mind. Almost every main stage panel talked about memecoins and as long as there are lottery winners in these offerings, they will proliferate
I find the story of diggers to be interesting here. When the first hydraulic boom came to market it was seen as gimmicky by the main manufacturers as cables were then more efficient. The main 30 manufacturers continued to serve their clients with ever more efficient cable based diggers that were significantly better in many ways to hydraulics. By the time the hydraulic manufacturers started to seriously dent the sales of the 30 major manufacturers, the battle was already won. Unless my general knowledge fails me, 20 years later only 4 of the original 30 incumbents actually managed to successful transition to hydraulics with the maket totally dominated by new entrants that focused on hydraulics. This story repeats again and again through all major technologies. The cost savings indeed don’t justify the move and the market is too small. It’s objectively a bad investment for the major financial incombants. However, I’m sure of one thing - that blockchain is no different to solid state discs, hydraulic excavators, computers or the internet. Many boards will be grovelling to their shareholders with various excuses as they drop into the red by 2030. cf. The Innovators Dilemma
Re tokenization and different approaches, closing internal loops may be the lowest hanging fruit GTM option. What form that ultimately takes is still to be determined. Though broad trends are emerging. Here is a detailed article on the topic. https://www.cryptoadoptioncurve.com/post/boring-is-better
Rob Hadick agree across the board. I’m curious how 1 is impacted as the bull cycle plays out and crypto natives start seeking uncorrelated assets. Do you think they go off chain for traditional assets or stay on? Stay correlated?
Derivatives, Derivatives, Derivatives will bring maturity and precision to the trading game.
Was bummed I didn’t make it this year. Thanks for the overview!
Great insights! Thank you for sharing!!
Head of Institutional Growth at Solana, 2x Founder and Investor
2moThanks for sharing. It was a great conference. Would love to do more buy side gatherings to better understand what they’d like to see if you’re interested in co-hosting.