What is crypto good for?

Which applications will still be in-demand at the end of the bull market?

Censorship-resistance is the only 10x value proposition of blockchains and their applications.

Blockchains have other value propositions, but these are not the order of magnitude improvement that applications need to catch on.

Secondary value props include asset programmability, and configurable privacy – ranging from full transparency to complete anonymity.

Still, applications with other value propositions only work if they also inherit censorship-resistance. Otherwise, they – at best – cause accounting headaches; at worst, break blockchains' security assumptions.

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Consider RWAs brought onchain as ERC-20s: these appear to gain asset programmability – they can be locked, streamed, LP'd – but they can be rugged at any time by the issuer.

The value proposition of programmability is nerfed for lack of censorship-resistance.

In other words, "the main benefits are lost if a trusted third party is still required to prevent double-spending."

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Censorship-resistance is the main value proposition of blockchains and their applications, and it is an inalienable one.

It is this category of applications which survive market cycles, and the builders of these applications who stick around between them – in essence, cypherpunks.

What doesn't last is everything else – everything else has what we call "a narrative" – which means "it's here now," or "coming up next," but everyone knows it will disappear.

Think about how insane this is – people openly admitting the investments they're making, the products they're building are a passing fad.

Meanwhile, builders of real products, legitimate businesses are shunned – even ridiculed for doing so.

Worse – most of these can't even get funded.

"Speculation" is entrenched as the main investment methodology.

So much so, that VCs rarely fund actual products – even those who understand the value prop of censorship-resistant apps; the investment returns from dogshit with buzzwords that retail understands far exceed those of legitimate apps, and so, the most profitable game is in funding vaporware, manipulating valuations, and exiting onto speculators.

There were aligned VCs, but they couldn't make enough to justify their funds. The ones left are those that played the game.

Likewise, the projects that got funded.

Extractive token games

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Tokens launched at low float, high FDV inflate their valuations by calculating FDV as last traded price × total token supply, based on a small percentage of the total token supply.

This artificially inflates the apparent value of the token, not reflecting the true supply and demand. As soon as investors' tokens vest, these tokens are down-only; insiders eat away at the order book, selling to retail at these inflated prices.

Speculation and multiple VC funding rounds followed by low float, high FDV token launches are not sustainable.

Crypto needs an alternative.

Enter @punkdotfun.

New frontiers

DeFi holds the promise of a parallel financial system, different from – and independent of – the existing one.

With it comes the opportunity to construct new economic models.

This is a great challenge – it's much easier to build copycats, borrow mechanisms, and reason by analogy – mirroring what exists than it is to build from first principles.

Multiple-round raises and marked-to-market valuations are vestiges of the old system.

They are not fundamentally sound – only held up by manipulative marketing, and they are wailing in their death throes now. The memecoin meta is the dying gasp of this extractive system.

Going forward, crypto needs an alternative system of raising capital.

There must still be a profit motive, but it can't be based on a lottery – a game of musical chairs or hot potato, where the first investor to defect rugs the entire liquidity pool.

Furthermore, it won't be based on gatekept deals, or funded by grifters.

Those systems have given us what we've got.

The new meta is the opposite of the old one:

Projects raising at low valuations, full float, in a single round, fair launched to other builders – those best equipped to identify value – on a platform which solves all of the challenges of TGE, for builders, by builders.

This is what we are building at @punkdotfun.

Inverting the meta

Tokens launched at low float, high FDV inflate their valuations as retail buy, and are down-only once insiders eat away at the order book, selling into speculation.

Tokens launched at high float, low FDV – where the whole supply is liquid at a low market cap – have the chance to do the opposite, climbing in price, upheld by deep liquidity, and accumulating both interest and fundamental value before going parabolic.

These will accrue value based on genuine utility – i.e. demand-side tokenomics – maximizing genuine user demand for a token based on claims to revenue and the token's use in the protocol.

Conclusion

In addition to economic security, @tokendynamics has focused almost exclusively on demand-side tokenomics.

@punkdotfun fixes the supply-side.

It solves and automates the entire raise process for teams. Teams no longer have to spend months building and modeling token launches.

With a plug-and-play, configurable tokenomics and issuance solution, builders of the most important, mission-critical applications are free to launch and raise at low valuations with enough funding to push their projects into the wild.

With proper utility, these tokens will automatically accrue value, providing the returns investors want.

If this vision of what we're building appeals to you, follow us @punkdotfun.

And if you'd like your project to be a part of it, send us a DM.