Chasing the Meta: January 2022
Tracing the "meta" stories across the crypto space
Introduction:
It is both very fitting and somewhat ironic that the concept of chasing Crypto narratives & “The Meta” was in fact, introduced through a narrative called “Trading the Metagame” by Cobie that coined this term in the end of Dec (2021). As Cobie so astutely put it,
As with video games, using the metagame in crypto gives the player the maximum chance to win. Identifying the metagame allows you to figure out the easiest and most lucrative opportunities at any given time.
Why did this resonate with so many people? Every crypto discord, group chat, or team starting in 2022 - had some reference to finding this “meta” narrative? Cobie literally hit the nail on the head, because he took an abstract concept that everyone involved in Crypto recognized, and cemented it into something concrete, almost palatable. We all knew back in 2021 that narratives were shifting left and right, month by month, whether it was Defi Summer, NFTs, ETH/BTC ratio, Metaverse, or the L1 wars. We just did not know that the narrative of narratives was in fact the actual “meta.”
Jan 2022 Month 1:
Because this concept is so powerful and easy to follow, I decided to start tracking the Meta stories of 2022. My hope is that we can look back at the end of 2022 and try understanding the Who? What? Why? of these “meta” stories in the hope that this helps us understand the crypto space even more. For we know that history repeats itself. Without further ado, introducing the “meta” concepts of January 2022:
1. Writing
Who? Cobie & Blknoiz06 & Adam Cochran. These are required readings for anyone actually serious about Crypto.
What? Cobie kickstarted the meta narrative with his blog post. Read it and you will realize how entwined the Crypto space is with this concept. Blknoiz06 came out with his predictions for 2022 - even today more than half of his predictions are being discussed at large with the community, whether it is $JEWEL, $POKT, or even composability & data layers like Celestia. The power of writing is that you can set “meta” narratives and this is the highest level of Alpha one can generate. Adam wrote a crazy twitter thread himself with some of the his top performers with ETH, YFI, CVX, KP3R - note 50% of these tokens (CVX & KP3R) are meta-related narratives for Jan. discussed below.
Why? Writing is one of the most effective ways to communicate with people across the space. As Kyle Samani from Multicoin said
It's extremely unintuitive that you can take a billion shots on goal by writing something one time…it's a real superpower to leverage one -to->many communication in that way
Just read through the three articles I linked above and then look at the January narratives for 2022 and see how powerful writing becomes. This is what sets the narratives and hence unlocks the power of writing.
2. [Mega-Narrative]VE-Token Wars & Token Design
Who? Multiple parties including Curve Wars, Convex, Tokemak, Saber, Sunny, TribecaDAO, FTM, Andre & Daniele, Platypus & 3AC
What? This has been a pretty huge category for 2022. Initially a lot of the narrative was focused on the Curve War narrative (including Convex, Tokemak, OHM & Redacted Cartel). Convex was a clear winner in 2021 and people took notice. Other narratives started popping up at the end of 2021 including the Saber Wars with Saber and Sunny, as well as Andre Cronje deciding to launch an ve-Token (Solidly) on $FTM. This was a combination of ve(3,3) so a Narrative within a Narrative 🤯. Interestingly enough, Andre decided that the top 20 or so protocols by TVL on $FTM would get airdropped a veNFT with snapshot happening on Jan 23, 2022. There was some fascinating game theory plays that took place when Andre announced his project, notably veDAO vs 0xDAO.
veDAO is an experiment with a single purpose: capture enough TVL to qualify as a top 20 project on Fantom, meeting the snapshot requirements to receive one of Andre Cronje’s ve3 NFTs.
Basically veDAO was bootstrapped and created right after Andre’s announcement to lock in enough liquidity to make it into the top 20 TVL projects on FTM. 0xDAO was created shortly after to “fight back”:
While this has been a net positive for the Fantom Foundation, a new phenomena has begun to emerge, one that seeks to bootstrap purpose-built DAOs with intensive capital for incredibly short periods of time, specifically, the veDAO.
0xDAO felt that new DAOs like veDAO, hurt the FTM ecosystem because taking a top 20 spot was unfair to protocols that have been building in FTM since day 1.
On the other hand, Saber also made a token design update in its ve-Token model to build in voting and staking. This was similar to the veCRV model where Solana players can also accumulate the Saber token and decide on which pools get the emissions. Additionally, they also announced bribing coming soon very similar to the Curve War narrative.
Avalanche also had its own start of a native stableswap with ve-tokenomics:
Why? The veToken design has been thus far been very successful with Curve and its ecosystem. This token model makes sense for stableswaps and it will be interesting to see if other types of protocols adopt it as well. Rewarding participants more and more for locking tokens for longer periods of time, and giving them the ability to vote on where emissions go - is a model to align incentives across all players in a protocol. This narrative is a Mega-Meta narrative that is going viral across all chains.
3. Community Airdrops
Who? $SOS, fees.wtf, $LOOKS, $GAS
What? Next on the list we have community led airdrops. Granted some of these happened in the end of December, we are still seeing more community airdrops for the month of Jan. SOS was one of the first to airdrop tokens to users of OpenSea. SOS created the OpenDAO and one of its core contributors is @9x9x9eth. The token was created by the community for the community. It had a fair distribution with 0 tokens reserved for the founding team. No private or public sale, just a free airdrop. They went on to create a DAO for governance for this token and project.
fees.wtf was more of a failed airdrop that tried awarding users based on ETH gas usage. Issues ranged from botched liquidity to botting activity. In a nutshell, an airdrop that did not go well.
$LOOKS launched a pretty successful airdrop and allowed users to stake immediately on their NFT platform with some healthy yield. Probably one of the only airdrops that has actually appreciated in value since it dropped. LooksRare is the community-first NFT marketplace with rewards for participating - where you get rewards for buying or selling NFTs.
Why? Community. Who hates free money? SOS has a strong community member backing. LooksRare wanted to reward users for their NFT activity. The one thing to be aware of, is to always be cautious with some of these free airdrops - because they do not always work out.
4. The $11M (3,3) Narrative
Who? OHM, BTRFLY, TIME, Sol Invictus
What? The (3,3) concept flooded the crypto community. OHM started this year with migrating to its V2 gOHM followed by working on its next product: Permissionless Olympus Pro. Redacted Cartel (BTRFLY) took the (3,3) narrative to the next level by creating a “complimentary subDAO for OlympusDAO”. Redacted Cartel also created the Thecosomata Treaty which is a bilateral agreement between REDACTED CARTEL & Olympus DAO to increase liquidity of the OHM:BTRFLY liquidity pair on Sushiswap. Additionally Redacted Cartel made a bold acquisition of VoteMak in collaboration with TokenReactor which would help place BTRFLY as “not only a leader, but the facilitator of the $TOKE wars”.
Sol Invictus (◎,◎) = (3,3) of Solana also got more aggressive with integrations and partnerships across the Solana ecosystem. INV also had an Agora proposal from the Luna ecosystem.
Unfortunately, as fun as this narrative initially was, everyone playing the (3,3) meta was in for a rude awakening mid-Jan. OHM price plummeted to its ATL Jan 17, 2022. TIME another (3,3) fork announced that it was also moving away from the OHM model.
However, there were some clear winners (cough cough $11M):
Why? (3,3) works well when Up Only, but when it crashes you don’t want to be left holding the bag. @shotta_sk played this narrative like a fiddle, went all in both OHM & BTRFLY early on, but made sure to de-risk OHM for his familia. Great lesson on playing the narratives and like Cobie said in his article, “Of course, identifying the meta early, buying the meta coins and selling them into meta exuberance is the ideal and obvious way to use the meta”.
5. Defi Kingdoms & Jewel
Who? Defi Kingdom - $JEWEL token
What? Jewel has been picking up steam since end of last year, but had a huge breakout early Jan. With talks of Heroes, summoning, Avalanche cross-chain, Crystal airdrops - this token had a meteoric ATH rise ($22.52) and subsequent pullback in end of Jan.
A lot of what drove this narrative was DFK’s gamified version of Defi as well as the comparison to Axie Infinity. A lot of big accounts picked up on the $JEWEL trend as well. With that said, we will probably see some interesting trends for DFK this year and some further drive especially because of the gaming narrative talking shape this year.
Why? One of the craziest things to happen was the OTC market sale of locked Jewel - where players with huge bags of locked Jewel were selling it at huge discounts to the market via a private unofficial discord. There was a huge disconnect between current $JEWEL prices and locked $JEWEL tokens. Will be very interesting to see what DFK develops.
6. SolLunAvax → FOAN → Privacy?
Who? Fantom, ONE, Atom, Near
What?
Near started picking up steam in December - with many new protocols launching on top of Near and Aurora (Bridge + EVM Scaling Solution for Ethereum). Near hit all the main narratives including NFTs, Alt-L1s, Stableswaps, (3,3), DEXs. 3AC also added $NEAR to its Twitter profile. Near also had the Tri-narrative with ROSE, PAD, Trisolaris being touted as the next big things.
ONE / Harmony has been driven in large part by Defi Kingdoms and its native $JEWEL token. Defi Kingdoms has been one of the top up and coming games as it combines both RPG like gameplay coupled with Defi. The way to bring the next thousands of users into Crypto is through games like DFK that make it fun, competitive, and intuitive for players.
Atom / Cosmos has been a darling child of the crypto ecosystem especially because of IBC. Cosmos has captured a few narratives including being multichain as well as modularity. Popular tokens within this ecosystem remain OSMO, JUNO, and EVMOS among others.
FTM also picked up steam with a big push by both Andre & Daniele for this chain. It is under owned by VC, retail friendly, undervalued vs other L1s. This was coupled with Andre’s narrative for his VE(3,3) project Solidly, so another narrative within a narrative.
Why? The thesis of a single chain to rule them all seems to be losing popularity. Whether we move to a multi-chain world vs. a cross-chain world is still yet to be seen but this is most likely where we will end up in the future. SolLunAvax → FOAN → Question is what will the next rotation be? Possibly Privacy &/or ZK Rollups.
7. NFTs & SimpDAOs
Who? Ghozali Ghozalu followed by IreneDAO
What? Gozali’s NFTs took the crypto space by storm. He took pictures of himself every day for 5 years (2017 - 2021) and sold them via NFTs on OpenSea. It was trending across discords, telegram and Twitter. This NFT had volume of 391 ETH traded - so yay for royalty fees!
Shortly after this, IreneDAO was created and also launched NFTs with Irene’s photos. We saw some crazy price action on OpenSea as well and this was trending for some time during January. The NFT started around 0.07 and reached an avg. price of 2.4ETH (34x) overnight and has 2.4K ETH trade volume as of today.
Why? Everyone loves a feel good narrative especially with Ghozali - people were happy to support this project. For IreneDAO - well horniness always wins.
8. Frog Nation Controversy
Who? 0xSifu & Daniele
What? Controversy regarding 0xSifu’s past that rocked the Frog Nation - which had downstream affects on most Frog nation tokens including MIM, Spell, TIME / Wonderland. Alameda ended up removing their $500M+ of liquidity at a loss in the Curve MIM pool and MIM ended up depeg-ing.
Why? ZackXBT doxed 0xSifu on Jan 26th in a twitter thread. Thread went viral and was shocking for the community.
9. Modularity
Who? Celestia
As blknoiz06 put it
My favorite project focusing on building a piece of this modular blockchain architecture is Celestia. They are building a blockchain dedicated to being the most efficient and decentralized data-availability layer and will be able to connect to other execution and settlement layers to complete the full modular stack
What?
One of the biggest projects that has a lot of narrative forming around is Celestia which is a pluggable consensus and data availability layer.
Why? Celestia separates Consensus and Execution. Celestia provides a very simple base layer blockchain that only does consensus and data availability. This in turn, allows developers to define their own execution layers on top of this in the form of their own customized blockchains. You can compare this idea similar to the evolution of the web where in the early 1990s each website had its own physical server whereas today, we have VMs and the cloud where anyone can spin up their own servers (AWS, Google Cloud) etc. Celestia aims to be a pluggable layer for up and coming blockchains.
10. NFT Flippening
Who? NFTs & the Metaverse
What? BAYC not only flipped Crypto Punks but also hit a 100 ETH floor end of Jan. There have also been a lot of great women-led NFT projects that started to gain traction in January including World of Women, WomenRise, and Boss Beauties among others. Other notable projects this month included Azuki, CloneX and Fluf.
Why? NFTs starting to gain popularity as well as an easy way to bridge new comers to Crypto. Some observers mention that when crypto markets trade flat or down, people rush to NFTs: BTC/ETH Pump → Alt Coin Pump → NFTs → Rinse and Repeat. Yet to be confirmed if this trend holds, but something to watch this year.
It is also interesting to note that in the short-term lindy effects for NFTs don’t seem to hold; however, long term we will see how strong lindy effects matter.
Conclusions
Meta Conclusions (especially if you are trading Narratives / Meta):
You either create the Meta or you are part of the Meta. Just make sure you understand which category you are in.
Metas & Narratives are getting shorter and shorter spanning from quarterly narratives → monthly narratives → daily narratives. It is critical to understand what narrative cycle you are in, especially if you are trading the meta narratives.
Narratives within Narratives - we are starting to see narratives form within other narratives. A lot of time the top narratives have many different arms - so it is critical to understand what, who and how deep is the narrative.
Pay attention to people setting the narratives - they are fewer than you think
Narratives are important but what is more important is your conviction and long term thesis. Before you start chasing narratives, figure out your own thesis first, which can be Bayesian and change over time.
what's ur twitter handle broski?