The Crypto Thesis 2023 🕵🏻 - DAY 3

GM Guys and Gals,

As we are on the trail on covering the awesome crypto thesis - Here we are with the 3rd Day where we'll cover Top 3 Biggest Trends in Web3 & DAOs 🔥

1. Wallets and Browsers

The backbone of the crypto economy is the personal wallet, not the exchange-based account. Wallets act as virtual money clips, identity credentials, and personal data vaults.

They unlock your access to the crypto realm, whether you’re using a DeFi app, NFT, or DAO, and they support access to protocols and assets that might not otherwise be supported by your favourite exchange.

The upgrades this year to personal crypto wallets have been incredible.

Better wallet infrastructure helps users manage the “not your keys, not your coins” problem, and turns personal crypto custody from a purity test to an accessibility, safety, and user experience upgrade.

Good personal wallets also dim the contrast between CeFi and DeFi and give users better and more seamless choices. Retail traders might leverage central limit order books from their Ledgers, while institutional investors might execute DeFi transactions without assets ever leaving their regulated custodians.

While we’ve made good progress on wallets, there’s still work to be done on the browsers and app stores. The most crypto-friendly browser, Brave, has grown tremendously, doubling from 24 million to 50 million MAUs from 2020 to 2021.

They also rolled out a privacy-preserving ads program in beta created a Wallet Partner program that counts 75 dApps, and integrated with Solana and IPFS. I’m keeping an eye out for their 2022 year in review in January.

Suffice it to say, there are still major censorship risks that confront crypto. And the backend challenges are even more acute.

2. Data Integrity

We need better reliability and standardisation around on-chain data, and better access to secure, verified “real-world” data in order for crypto (particularly DeFi) to reach its full potential.

Most data providers, like Coin Metrics or Glassnode, offer a limited number of API endpoints for general-purpose datasets.

The Graph offers tooling that enables the developer community (or independent teams and entities) to develop open APIs of specialised subgraphs that data consumers can query to power unique application features. Anyone can build and publish open APIs, called subgraphs, making data easily accessible.

3. DAO Treasury Management

Despite the lessons of history, most DAOs still don’t properly diversify their treasuries or spend much time on coherent community budgeting processes. That is thanks, in equal parts, to legal and organisational ambiguities, a lack of tooling, and a fairly blasé attitude toward professional management.

Surely, other protocols had learned their lessons, and big exchanges wouldn’t lever up on their trading tokens with customer funds.

It appears that the immediate future of crypto protocols will continue to flow through foundations and VC-backed corporate entities as the catastrophic downdraft in crypto prices this year has essentially relegated many high flying 2021 protocols from unicorn to Series A status.

But it is clear that many communities did not take proper advantage to diversify their portfolios at the height of bull market mania last year, and now many may struggle to take advantage of opportunities in this new market.

(Vitalik is an exception. He’s a god tier trader. 2017. 2021. All hail.)

The best time to diversify treasury was 12 months ago, when I wrote “the first recommendation most treasury managers would make today: start selling. A Q1 blow off top doesn’t do a DAO any good if the asset nukes 90% mere months later.” Communities that didn’t heed those bear market warnings will now have to cut community spend, devolve into volunteer-led zombies…or consolidate?

That's it for the day, Web3Shala 👋

To the moon 🚀LFG 🔥