DeFi is dead. And for good reason. 😫
Most DeFi builders have rolled over and waved the white flag, surrendering to Memes as the new top crypto usecase. But why? 🏳️
Many builders have forgotten how to innovate, and those that do still forget the only real product in crypto is the token.
For retail users, there is no way to get exposure to the innovations or hot narratives of this cycle early. Investment at any decent valuation has been once again exclusive to private rounds.
If you treat your users like shit, you will very soon no longer have any users.
Restaking, new L2s, BTC restaking, etc. All the major protocols within the narratives of this cycle have refused to launch their token before they get slapped with an absolutely crazy valuation.
Then every token that eventually launches with "Low float, High FDV" attempts to use retail as exit liquidity for the hundreds of private investors ready to dump as soon as they unlock.
Putting it simply, no retail investor has ever gotten rich from the narratives of this cycle. DeFi is seriously lacking this key bit of marketing.
Points meta just serves to pump the valuation further, by demonstrating fake users. This comes with the promise of "airdrops", but these are not real airdrops. Airdrops used to reward early and loyal users, with wallet size being irrelevant.
That is not the case here. This is simply over-engineered farming. Even then, the farmers end up as forced investors since terms are undefined and variable. Adding vesting or even systematically removing eligible parties.
Retail is sick of being farmed.
Why would they continue to play these unfair games?
So they have turned to memes, to them it's still a casino, but at least it is a slightly more fair casino.
There are literally hundreds of case studies of average degens getting rich from a memecoin. Feels like there is a new one every day. This is the key.
So, how do we fix this?
It's simple, we need to once again allow retail to be early, and get rich.
DeFi doomers will say it's over. "Retail doesn't want DeFi anymore, they want Memes. Pure concentrated speculation". But the market shows otherwise.
Look at the DeFi tokens that have performed the best this cycle.
$AAVE,
$PENDLE,
$JUP,
$COW,
$LDO,
$UNI etc. What do all of these tokens have in common?
Firstly, they are actually trading. Secondly, most supply overhang has passed. These are both not shared by tokens of this cycle. Clearly, there is still an appetite to trade DeFi tokens, it just has to be the right tokens.
The defi-renaissance thesis for me is simple. Memecoins only appeal to traders who don't care about fundamentals at all, and instead care about pure speculation or price action.
On the other hand, DeFi tokens have the ability to appeal to BOTH fundamentals and speculative trades. The set of traders for these tokens is strictly larger than that of Memecoins.
For that reason, assuming DeFi builders can see the errors in their current ways and welcome retail back, I expect DeFi tokens to outperform memecoins in 2025.
-----------------------------------------------------
I'm trying something new with this longer-form content. If you liked it then please follow me and rt or comment 🫶