Pop a Cap

While I should have written this post last night when it was 94 rather than now after the markets have retracted and it is 88, it was late and I was tired.

What the hell am I talking about?

Market Capitalization.

There are 94 88 projects that are currently valued at over a billion dollars. To break into the top 100 in market cap, it takes almost 900M in value. This is quite a wide spread across projects and while I haven't been in crypto long, I still remember a time when it was only the first five or so that had billion dollar caps.

What I do find interesting, is that I don't know a lot of the tokens in the top 100 but I don't think there is much real support other than the hope of moon propping many of them up. While I am sure they all offer something in their various whitepapers, I still question if there is anything actually built as a service or product that is actually getting used. There are a lot of projects out there - yet who is actually using them for their intended usecase?

Weirdly though (in my opinion), the ones that do have usecase and are at least somewhat being used as intended, don't seem to always get much love.

RANKED #189

Okay, I am HIVE biased already, but I am still pretty sure that it is the largest and most active independent community and it doesn't rely on Twitter to have a face, it has many faces, as well as the most active and popular crypto game out there in Splinterlands. Plus, it also has LEO and the CUB Finance teams, on platform staking, earning, yield, governance, scalability, security.... and, it caters to everyone, without a lot of the complexity that the other projects require, just to understand what the hell they are supposed to be - What's not to love?

But, Hive aside.

RANKED #290

Travala (AVA) also has a use case and is being used as intended, though since it is for the travel industry, Covid restrictions have put a little bit of a dampener on their products and service - yet, it still, not a great deal of love, despite there being options to earn and coming options for additional staking. (@trumpman?)

Use me MoFo

Now, I own both of these tokens, so again, I am pretty biased, but my point is that even tokens that are heavily utilized like WAXP are sitting in #114 and my ex and now shitcoin STEEM, is in #183 - but it is getting used (and abused).

A lot of the tokens that are highly valued in monetary terms are DeFi yield tokens and I suspect that since most of them do not offer anything other than the yield, they are all going to fail eventually. For most of them, they are just trying to keep the music going before people start looking for a seat - which isn't going to be in their projects.

I have said many times before, that while there is "money to be made" in a lot of these tokens, eventually people are going to look for some modicum of stability to park their wealth and with an expanding list of shitcoins hitting the market and ways to earn them, people are going to shift toward what gets used. at least in part.

Those who have been able to generate wealth will of course have the option to use it to generate more and can afford high risk, but the percentages they put into high-risk investment vehicles will decrease for most of them. As the crypto industry matures and businesses not only form, but start getting decent patronage, the people who parked their funds earliest are going to benefit the most, as we have seen during the ramp up of Splinterlands on Hive.

Early on, not many people played and investment was low, but in the last months it has boomed with users and value has skyrocketed. The same thing can and hopefully will happen with tokens like AVA and HIVE, where as the shine of defy yield wears off as coins fail, the people will look to move at least some of their wealth into safer harbors.

With the hundreds of billions worth held in shitcoins now, they have the options to go to fiat, go to stables or to support other projects. While each will likely take some kind of hybrid approach to their diversification, a fair amount should fall back into projects, especially since for those in the know, they will understand that getting into real projects early will benefit from the multiplier effect of bandwagoning.

Not long back @edicted mentioned a future of 50 dollar HIVE, which means is about 100x up from where we are today. Damn, that would be crazy, right?

In terms of current market capitalization, that would just squeeze HIVE into 10th position behind Polkadot. However, that doesn't take into consideration what would happen in that event, as a lot of those current top 100 tokens are likely to fall dramatically from grace, while a few of them will make massive inroads up the charts. This means that potentially, HIVE could hit the 20Bish mark needed for 50 dollar tokens, and still sit somewhere around the 30 or 40 mark on the ranking.

What a shame!

However, at that stage, everything in the top 100 would very likely be real projects with usecase and patronage actually using it, much like the Fortune 500 is made up of companies that are actually making money as their business model intends and aren't just there without a working product because of hype. There is some hype for sure.

But, all of this is specualtion, just like all of the investors are speculating on tokens in the hope to get rich, not caring if the tokens they have actually do something or not because,

They are gonna dump!

As soon as they get to some price point that suits them or they think the market is going to turn, they have no reason to stay, because the only thing keeping them there is the potential for profit. While this is the same for all investments, investors who are looking a little longer realize that the real money is finding a balance between yield and security, opting for lower yield in favor of less risk. The best way to do this is by getting into investments that have usecase and are being used, because the community of users are part of the security - as they are invested in the business model too, even if not with capital.

It is a hard, long road investing into essentially startups in the hope that eventually they will get supported by the user market and realize their value potential. And, it is definitely not as sexy as getting massive overnight gains, but eventually, nearly all the gamblers get caught out and the "slow and steady" win the race.

The next drive at ATHs is going to be a lot of fun, but what is going to be very interesting is what happens post-bull, as that will tell a lot about the maturity of the industry the likely direction it is going to take as it leads into the next bull. For most of the projects without usecase, the bear will find them dead in the water - not even worth a sniff.

What tokens out there do you think have usecase, but aren't getting love?

Taraz [ Gen1: Hive ]