# My Crypto Thesis As Of Q2 2023

In a few weeks, I'm going to meet up with coworkers at a company offsite where we'll be going on a lot of walks and sharing meals together--in-person! This will undoubtedly lead to a lot of spontaneous brainstorming and forecasting. I miss this about the in-office work culture.

These are colleagues that I am lucky to see one or two times a year so there's a lot to catch up on.

One of my goals ahead of this trip is to bring with me a mostly developed (~75% crystalized) thesis about where the crypto industry is going:
- What will the crypto user experience look like in 2030?
- What will the infrastructure look like then?

This will help inform answers to the most important existential questions in the industry today:
- What should I be building in 2023?
- Where will value have accrued by 2030?

## Rollup Mesh: many Rollups optimized for specific "Feature dApps"
- There will be many rollups (e.g. many L2s, and L3's offshooting from those L2's, and L4's, etc) that all share the same VM architecture as the underlying L1. Think of these as computing ecosystems comprising one L1 and many L2's that all offer one VM experience to the developer.
- This is the Rollup "mesh". There will be one Rollup Mesh for the EVM, another for Solana VM, Cosmos VM, etc.
- Each of those rollups will be optimized at the lowest layer to support one "Feature dApp" that attracts users to the rollup, and several "Satellite dApps" that are highly symbiotic with the feature dApp
- The mesh will comprise Rollups that are distinguished by their dApps and why users want to use them
- These Rollups will all look and feel like Web3 products today: fast and centralized. Users interacting with feature dApps will not have to know what chain they are on
- **Counterpoint (CP):** Why wouldn't these dApps just deploy on Web2 servers instead of rollups?
- Composability: Because rollups offer things that servers don't: dApps deployed on rollups are composable with other dApps on that rollups or even other rollups, because they all use the same VM.
- Path to decentralization: No one wants to keep a server updated. Rollups can take advantage of shared sequencer technology to eventually offer multiple validators who would validate their rollup. Restaking will also offer the ability to easily borrow economic security from lower and higher valued layers
- Profitability: Feature dApps can all create native tokens that accrue value to the rollup by forcing users to pay for their dApp usage with those native tokens while forcing validators to stake that
- This will be a boon for the following products:
- Rollups-as-a-service (RAAS)
- Devs will want to convert their dApps into Rollups quickly without worrying about things like setting up Proof-of-Stake, RPC clients, block explorers, etc.
- Network infrastructure
- RAAS will produce new Rollups like a factory and offer services for users and validators.
- Staking on one Rollup shouldn't be so different from staking on another one.
- Analytics for stakers (Rated)
- Monitoring software (Beaconchain)
- App level analytics (DefiLlama
- Rated (analytics. Think DefiLLama for rollup stats)
- Node Security
- Distributed Validator Technology
- Sequencers as a Service ("Shared Sequencers")
- dApp devolopers won't want to fuss with implementing Sequencers for the consensus of their rollups
- There will be a lot of cross rollup MEV available that these shared sequencers will extract
- Ideally, these sequencers can decentralize over time, allowing Applications to be self sovereign
- dApp developers
- I think longer term this will cover dApps in many categories.
- In the shorter term, DeFi and Consumer facing dApps will be the first feature dapps. DeFi mainly for higher net worth individuals and institutions. These are the two categories that have the ability to be "killer" apps and therefore have enough power to bring users to a specific rollup. Think DyDx, if it were deployed on an EVM.
- On an optimized rollup, the dApp can feel faster for the user
- Bridges
- Tokens will flow constantly across Rollups to engage different use cases. Imagine transferring value from the Gaming Rollup to the DeFi rollup to deposit earnings from the game into self custody bank accuont.
- Want my thesis on Bridges? Wait for my next post but TLDR:
- Bridges will have to rely on network effects, and therefore the cheapest bridges will be the biggest.
- There will be a power law distribution of Bridge market share
- The top bridge will be able to charge a tiny service fee, which will be very profitable at large scale
- Liquidity Networks/AMM Bridges are unimaginative and capital inefficient, have very little chance to offer competitive fees when facing alternatives at large scale
- Wallets
- Will be the passport to navigate the differnet rollups
- Users want a single interface to move between networks
- Will onfuscate rollup specific details from user.
- Can offer bridging in the background to get from network to network
- Will have pricing power since they control users and dictate which dApps they use.
- I predict bridge aggregators will eventually move into the wallet space since they're the interface today for cross-rollup navigators
- Users
- Use a dApp and then transfer your funds back to Mainnet where they are safe and self custodial. Every dApp feels the same.

## Oh, the Rollups you'll go!

*A Rollup optimized for gaming: low latency, centralized operator, loose and fast with regulations*

*A Rollup optimized for highly secure, self custody finance: slow, decentralized and secure, with fast and cheap connections to all other realms*

*A Rollup optimized for purchasing goods and services. Has great native customer support and dispute resolution and is very easy to onboard new merchant dApps.*

## How do we get to this world

For my crypto vision to materialize, we need a lot of liquidity. Rollups, Feature dApps, Bridges, etc. will all require a lot of human attention and capital in order to achieve network effects of scale.

Where are these inflows going to come from? This has been a topic for a while in the crypto discourse. In order for the industry to grow, we need to attract new users who have never sent a crypto transaction before.

This is less clear to me but my instinct is that the Feature dApps will attract all of the new inflows and bring in new users into the crypto world. So the question then becomes, which feature dApps will bring on new users?

Most likely candidates:
- New addicting games that could only work on blockchains
- Existing addicting games integrating blockchain technology in such a way that leads to a lot more on-chain activity