Crypto Moose🫎

ETH's positive black swans The future of crypto seems likely to continue to be a series of random and surprising upside events (positive black swans), and imo, these will disproportionately benefit ETH. Let me try to explain why a series of positive black swans is likely, and why it'll benefit ETH even more than the rest of crypto (but all of crypto does well). Onchain innovation is just getting started. No one investor or fund has all the expertise needed to foresee even a fraction of the innovations coming. A recent example is that InfinityPools discovered a way to make superior leveraged trading by recognizing that taking the other side of LP positions was an underutilized resource. Another recent example is that Axiom discovered you could make a ZK proof of any EVM historical state. It's as if The Graph SQL could be ZK proven. This new capability expands the functionality of any onchain app to be able to access arbitrary historical data without an oracle, including computations over that data. Imagine if you could deploy a token that, upon creation, airdropped itself to anybody who had a position in your protocol in the past six months. Or, imagine a corporation with an onchain financial audit that used a zk proof showing its historical onchain balances did not fall below the required reserve ratios in the past quarter. This is now possible with Axiom. A third recent example is that there's a new class of wallets that discovered you can make a reasonably credibly neutral translation between a public ID, like an email address or twitter and a crypto address. As a result, these new wallets allow you to send crypto to anybody's email, twitter, etc. So people can now receive crypto even before they create a wallet. E.g. you can now airdrop your mailing list without them creating wallets. A historical example is the announcement of Uniswap v3 and its innovation of concentrated liquidity. At the time, this was a total game changer. Nobody outside of Uniswap's closely held research team knew that they had found a way to dramatically improve capital efficiency while also creating a primitive on which many other things could be built. So, onchain/defi protocol innovation is only getting started. Who knows what discoveries remain and their impacts? Probably a lot, with huge impacts. Real-world use cases are also just getting started. A great example here is that tokenized treasuries (T-Bills) went from zero to a few hundred million in about five months. There is a lot we may readily predict about the forthcoming impact of real-world use cases. It'll be nothing less than a global revolution in payments, financial markets, goods & services markets, asset management, etc. And yet, although some of the future of real-world use cases is predictable, it'll likely also surprise to the upside. There are almost surely huge real-world use cases that none or few of us can yet foresee. There's a famous late-night comedy interview from the mid-1990s where a guy said nasty things about the internet because "you could already listen to a baseball game on the radio". I don't think this guy saw iTunes or Netflix coming. In twenty years, people who said, "you can already send money on Venmo" are going to sound as stupid. For those reasons, we may expect an ongoing series of positive black swans in onchain protocol innovation and real-world use cases. But why should these positive black swans disproportionately benefit Ethereum and ETH? Well, (almost) all of crypto is going to do really well. No argument there. However, Ethereum and ETH are going to do even better than crypto in general. My thesis here is that the following fact is generally vastly underappreciated by most investors (even if those investors already appreciate the likely series of positive black swans): Almost all valuable onchain protocol innovation and real-world use cases will either be built on Ethereum or can be readily ported to Ethereum, but Ethereum's strong and growing network effects of apps, tokens, liquidity, marketplaces, L2s, integrations, and trustworthiness almost surely can't be readily ported to other chains. It's asymmetric: Ethereum is a black hole for innovation while being difficult or impossible to compete with directly. To put it another way, for any of our bags, we may imagine the worst-case competitive scenario that we could wake up to on any given morning. For most protocols, a game-changing competitor can emerge overnight. Liquidity can flow elsewhere. Users can migrate at the click of a button. New chains can be deployed. New architectures can settle on Ethereum. And yet, we shouldn't expect to ever wake up and find that the Ethereum L1 has been totally disrupted overnight. Ethereum's defensibility is based on a moat dug with blood, sweat, and tears. It's highly unrealistic for a new chain to quickly (or hopefully, ever) become a substitute for the institution that is the Ethereum L1. Ethereum's defensibility is "knowable" in a way that onchain and real-world use case innovation is "unknowable". ETH benefits from both the knowable (defensible network effects) and the unknowable (positive black swans, ie. surprisingly valuable innovations that either are built on Ethereum or can be readily copied into Ethereum). In short, the future of crypto is likely a series of positive black swans, and imo, these will disproportionately benefit ETH because most investors don't realize the extent to which innovations can be readily copied onto Ethereum while our network effects provide strong, reliable defensibility. ETH🚀