If you haven’t been in the industry for very long, it’s hard to fully appreciate how quickly narratives change in this space, especially when you’re trying to keep up. Trends get old, memes get tired, and it’s fair to say that seasonal trends this year are currently feeling the pressure of Bitcoin’s waning momentum.
While it may be easy to dismiss this as a temporary setback in a normal bull market correction, the strong underlying currents run counter to popular scaling theories. As this tide ebbs, it’s getting a little harder to ignore the naked swimmers.
Is the airdrop meta over?
If it wasn’t already obvious, the recent flurry of projects offering to “build on Bitcoin” have so far been more opportunistic than innovative. Sure, BitVM and ordinals sparked real interest and creativity, but subsequent developments have left a lot to be desired. This was mainly caused by lazy operators. Instead of doing real engineering work, every other third-rate entrepreneur in the industry simply ran the Ethereum playbook on Bitcoin.
I Claimed In a previous article, we discussed why this modular, small-scale industry has made Ethereum worse off from a scaling perspective, but recent developments have highlighted just how misaligned the economic incentives are.
Of course, the roadblock to this infrastructure arms race is the ability of promoters to print tokens like it’s going out of style. Unfortunately, it looks like the trend for these schemes is starting to fall apart. You may remember when Dentacoin raised billions of dollars and then everyone finally pivoted away from ICOs. Something similar is happening right now.
Just a few months ago, I explained How the concept of points conquered the token airdrop meta. Alternative execution layers were popping up one after another, advertising the opportunity to earn ultimate rewards in exchange for liquidity on the network. The premise was very simple, users are incentivized to use an application with a specific rollup or contribute assets to its trading pool. Once the chain launches, tokens are allocated to quasi-random eligible participants, an idea that further fits the protocol and its future.
In the end, quite the opposite is happening: several highly anticipated token airdrops took place last week, revealing the absurdity of this approach.
How does an anonymous system verify the identity of a user? It can’t. Otherwise, any capable person would have the opportunity to impersonate any number of users. Naturally, someone with deep pockets I immediately noticed the trick. And they are busy exploiting it for their own gain. Airdrops attract not users, but mercenaries who are looking to plunder every new layer of wallet they can get their hands on.
You may wonder why I am writing about tokens in a Bitcoin article. This is just a reminder that any scaling proposal or layer on Bitcoin that involves tokens should be avoided at all costs. Asset fraud aside, this playbook is a clear sign of an outdated project even by Ethereum standards. I don’t care what technology they claim to be working on, nor do I care about their execution environment or zero-knowledge proofs. Their window of opportunity is closing in and they will be expected to try to scam “users” at every turn to profit from the liquidity left by this scam. Stay away.
Ethereum’s Identity Crisis
of Bitcoin Layer The platform reported yesterday that over half of Bitcoin’s current scaling proposals plan to use Ethereum’s EVM as the technology platform. It’s hard to know what to make of this figure – it’s probably too generous to associate any of this with Bitcoin, but the market is clearly interested in exploring this idea.
This is especially meaningful given the current volatile state of Ethereum. I wouldn’t call it a civil war just yet, but some battle lines are being drawn and the outcome will impact the rollup-centric roadmap. I’ve previously said The Case for Ethereum Network FragmentationSuffice it to say, things have escalated quickly and the project is once again facing serious debate and introspection.
On the one hand, a group of developers Enacting rollup operations Protocol for the Integration of Economic Activities Improved user experienceAnother group is Asking questions About this initiative Further centralize MEV extraction This also impacts censorship resistance. It looks like Vitalik needs to take another step.
Combined with fatigue over the commoditization of the EVM execution environment, the previously lauded theory of modularization is now It’s starting to look pretty weak.At the very least, the original strategy no longer appears to be working and the narrative is shifting again.
The timing could be good for the emerging Bitcoin layers that are beginning to look pretty outdated by industry standards – and they haven’t even launched yet.
Meme exhaustion
I would never be bearish on memes, but they move in cycles, and the latest ones lose their luster. I’m not ready to declare the pinnacle of this new meme paradigm, but this is another example of Bitcoin’s new layer lagging behind. Without dog and cat tokens, what market would there be for all the infrastructure being built?
A new generation of Bitcoin developers is on shaky ground. Those who decide to take the long road of focusing on practical work will have a better chance of making it to the other side of this bull market. To do so, they will need to learn valuable lessons from the experiment on the other side of the Atlantic. Given how quickly things are changing, patience seems to be the answer.
