The Case for Liquid Tokens

The argument for liquid tokens is simple: I believe there is a huge opportunity (alpha) in the liquid token investment space, while the VC token investment space is already oversaturated.

The cryptocurrency market has shifted from depicting dreams in 2021 to realizing those dreams post-2024, with Solanas serving as a prime example.

VCs should focus on identifying promising products rather than repricing assets. DeFi’s revival bodes well for undervalued protocols like AAVE, highlighting opportunities in the liquid token space.

Banana Gun's high revenue ranking despite its low market cap exemplifies the undervaluation of some promising protocols.

A recent example is Ethena, which demonstrates the potential for discovering valuable liquid tokens.

Four questions help uncover opportunities in liquid tokens:

1. Aren't scams the most profitable?

While scams can yield high returns, asset selection becomes paramount post-2024, rendering scams less effective. Focus on identifying promising protocols.

2. When will the market pay attention?

It's crucial to anticipate market trends and identify assets that will garner attention. TradFi capital requires logical fundamentals to drive market movements.

3. Why not just buy Memecoins?

Memecoins, despite lacking fundamentals, exhibit a strong community following, which can serve as a basis for a "fundamental" framework. This community worship manifests in shared memes and a strong collective identity.

4. What do fundamentals represent?

Examples like Solanas highlight a logical argument for higher valuations, but fundamentals can also manifest in other ways, such as strong community support or a unique value proposition. Uncovering these fundamentals is key.

Overall, some liquid tokens are quietly building promising protocols, presenting opportunities for those who can uncover them.