The Euthanasia Rollercoaster - The Daily Gwei #460
Are we really going to do this all over again?
Another extremely hyped-up ERC20 token was launched over the last 24 hours and this one was tied to the popular NFT project Bored Ape Yacht Club. The token, ApeCoin, is currently trading at $15 which gives it a fully diluted value of $15 billion and the airdrop that Bored Ape NFT holders got is worth 6 figures - one of the biggest aidrops in crypto’s history. Given the relative sucess of ApeCoin so far, are we going to see other similar projects issue their own ERC20 tokens to capitalize on the hype? Of course we are.
We see this play out time and time again with new trends and those who have been around for a while have coined it the “euthanasia rollercoaster”. When applied to crypto it’s the concept of a trend playing itself out to death where each new iteration of said trend is less and less noteworthy. We saw it play out with DeFi summer and all the “food forks” in 2020, we’ve seen it play out across the “10k pfp” manias, and we’ve seen it play out in the alt-L1 space. Now, I think we’re going to be seeing a bunch of NFT projects issuing their own ERC20 token because ApeCoin has been a relative success (at least so far).
Honestly, at this point, I really wish this industry would stop doing things like this because I actually think its set us back on many different fronts. For example, as I wrote about yesterday, DeFi is still trying to recover from the excess of DeFi summer which happened 18 months ago (a lifetime in crypto) - and I believe it’s mostly due to so many people getting burned by playing the speculative games at that time. This then leads to slower adoption, a higher churn rate of users, and an overall harder time for builders. Though you could take the opposite view and say that this is a necessary thing to happen as projects do indeed need to go through a “trough of disillusionment” phase at some point.
I’m not actually sure if there is a way to stop/change this trend short of basically banning financial speculation itself. The crypto markets are the freest markets in human history and people are always hungry to speculate on something - especially things that have an incredible amount of hype behind them. So even if it does lead to lots of people getting burned, it’s prudent to remember that there are winners too so it’s not totally zero-sum - though to be fair it’s much closer to the zero-sum side of the scale than the positive-sum side.
In saying all of this, I do hope we see less of the money games & ponzis and more of the long-term sustainable projects. I mean, if this industry just remains 99% speculative/gambling then we have failed in what we’ve been trying to do since Bitcoin first came onto the scene - provide a truly self-sovereign and bankless financial system for those who need it - and also leverage the same technology to build as many world-changing decentralized tools as possible.
Because after all, speculation is cool but changing the world is even cooler.
Have a great weekend everyone,
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All information presented above is for educational purposes only and should not be taken as investment advice.