The "Speculation Only" Era in Crypto is Ending The revenue meta and the increased attention investors pay to tokens' value accrual mechanisms, are evidence to the fact that crypto markets are maturing. Up to this day, a lot of investments hinged on the fact that some "governance" token, often without any value accrual, being perpetually inflated, and ultimately resembling an unregulated form of equity with 0 enforceable share holder rights, happened to share the name with some piece of fancy tech that might (or might not) be relevant at some point in the future. Now, things are changing and that is good. Cryptographic tokens provide a great tool for builders of decentralized tech to raise funds efficiently in a digital world, and they are powerful tools to build community and incentivize product adoption along the way. But why would people buy these tokens? From an investor's perspective, tokens are (or should be) co-ownership of and exposure to internet-native business models with revenue and growth potential. Think about traditional markets, where rational (and successful) investors invest their money in companies that successfully manage to build strong business models and products around disruptive technologies. Companies with a business plan, revenue forecasts, and (ideally) aligned interests across founders and employees to grow the value of the company the equity represents ownership in long-term (often questionable in crypto). Which brings us back to Web3, and the fundamental investment cases that might or might not exist around many of our tokens. But don't get me wrong. I don't think speculating merely around narratives is a bad thing. It's a defining characteristic of our hyperfinancialized industry, and won't die out. If you manage to frontrun the shifting attention in this space successfully, short term narrative speculation will also continue to provide outsized returns. Also, in a complex (bull) market like we're in rn, there is always various forces at play concurrently. Corporates and equity-based investment SPVs will largely continue to buy the same majors that most of ETF flows will accrue to (BTC, ETH, maybe SOL and BNB). Retail will always buy the same ghost chain dino alts (ADA, XRP, LTC) and memes (DOGE), that they trust bc they've been around long enough, and that are actually accessible on CEXes and retail platforms. The onchain PvP in the trenches will always give rise to new runners that are detached from any fundamentals. But nevertheless, in the long-term, and solely speaking from a token & price action perspective, I do believe that the winners will be: - Tokens (whether infra or app layer) that credibly provide co-ownership and participation in upside (revenue) of strong internet-native business models that can include anything from spot & perp DEXes or lending protocols to proving markets, launchpads, compute networks, interoperability infra, and more. What matters is that the tokenomics are solid (not perpetually dilutive), and that clear value accrual mechanisms exist. - Native tokens of execution layers that already do or potentially will power multi-billion dollar economies, and that have strong organic demand as ecosystem exposure proxies and utility asset within the surrounding DeFi ecosystem, while often also being leveraged to secure the network (becoming productive via staking rewards). If also incorporating economic participation akin to what I outlined above and sustainable tokenomics, even better. Why? Because outside of our little crypto-native degen bubble here, where almost anything that is onchain can quickly be worth a few hundred millions in FDV, there is little interest in investing in abstract promises of relevance in the future at sky high valuations. Sophisticated investors that enter our space will want to understand the business models and investment cases of what they bet their money on, and see a path to sustainable growth + value accrual. Meanwhile (and as outlined before) most retail will stick to whats accessible, preferring memes and the dinos dinos they know, over fancy/complex tech. To make things worse, in recent years, VCs have also increasingly managed to completely monopolize value capture from pre-seed rounds to public launches at 9-10 fig launch valuations, creating an often predatory and extractive setup for retail and open market investors more broadly. Something that, especially in the absence of justifying fundamentals, and given a finite amount of capital/liquidity to be allocated in the market, is definitely not sustainable in the long-term. I have previously talked about these issues (e.g. in my Celestia piece), and will revisit this again more broadly another day. But for today, let's keep the focus here on the investment/business cases around our magic internet money tokens, not the (admittedly also relevant) distribution. Because the former is definitely something you should keep in mind when placing your bets. In the long-term, only a fraction of all the tokens in a market that sees new tokens launch almost daily, will survive the relentless battle for relevance, investor attention, and liquidity. I believe the ones that do, will largely be the ones that have actually sustainable tokenomics and functioning business models that their tokens allow investors to participate in. Because while in a world where instead of companies, we invest in protocols, algorithms and DAOs, a lot of things are new and different, don't be fooled into believing that the fundamental principles of investing don't apply at all. Especially as the market matures, while becoming increasingly saturated and competitive, both successfully launching a token as a builder, and winning as an investor, becomes more difficult. Understanding market dynamics and investor rationales, but also being able to distinguish between narrative-driven speculation and fundamentals-driven investing in internet-native business models, is hence absolutely key. DYOR anons.