Preface

The Telegram Open Network (TON), is the most eagerly anticipated Mainnet launch in 2019 - and not without reason. TON has conjured up the 2nd largest fundraising effort in crypto, second only to that of EOS, and promises to launch a  5th generation blockchain that introduces its native asset, the Gram, as a payments tool to approximately 250 million active users of the Telegram Messenger.

But not all appears to be rosy over at Telegram HQ. The project is late in its roadmap by more than one year, and has only recently released a public Testnet, with all too many variables being currently classified under “unknown”.  TON is faced with a dire dilemma; either deliver a working Mainnet by the 31st of October, or return capital to investors.

The small ecosystem around TON is currently seeing a flurry of activity as the deadline approaches fast, with mystery abound as the core developer team continues to keep a very low profile. Will the network launch in time? Will it be sufficiently decentralized? Will it attract the necessary developer interest to populate the network with applications?

In this report, we provide answers to the above questions - and many more, in what is possibly the most comprehensive piece of research on all-things TON.

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Takeaways

• Brave is a standout among crypto projects from the ICO era, when considering the adoption it has managed to drive.
• The MAU numbers are still low, when compared to other browser products.
• BAT, the native protocol asset, only finds utility as a payment token, which dampens Braves adoptability.
• While the adoption numbers are encouraging, more users do not necessarily translate into more ad spend, as Brave's core value proposition is - quite literally - ad-blocking.
• The ads shown on Brave Rewards are mostly of poor quality and still very crypto specific. Better quality ads and better payouts to users (currently $0.5 pcm) will improve adoption.

Brave is one of the breakout crypto-friendly products to come out of the 2017 ICO boom. The browser is a privacy-first product, offshoot of Mozilla Firefox and fork of Chromium, powered by a cryptoeconomic layer in the back end. Instead of a traditional advertising model, Brave shares 70% of the ad revenue generated, with users, in the form of Basic Attention Tokens (BAT). Whether a user is exposed to ads or not, is up to the their discretion.

In this short post, we make a case for how Brave’s token economy design might hamper the value accrual potential of the BAT token over the long term, by deteriorating user experience for merchants.

Adoption

Recently, the browser surpassed 8M MAU, a YoY growth rate of 166%. While the absolute figures pale compared to Chrome's 3B users, they are certainly outstanding in a crypto context. If the assumption that internet users across the world will increasingly keep becoming privacy sensitive holds true, then a window of opportunity opens up for Brave. On the browser end, Brave is faster than Chrome, while its integration with Duckduckgo on the search engine layer, boosts its privacy preserving value proposition.

Whether or not Brave is an attractive investable opportunity through BAT, largely depends on BAT's token economics. BAT is the native network token that is primarily used as a payment token, in the exchange for attention between advertisers and users. While an ad-blocking browser by default, in Brave users are presented with the option to share their data with advertisers, and see ads in exchange for BAT.

1.5B tokens were issued and distributed over 85% to investors and the wider market - a big long term positive in my book. Until further notice, there will never be any inflation - also a big net positive. BAT tokens have no further intended utility than the payment function described above - a feature I perceive as a net negative.

The numbers of publishers signing up to the Brave ecosystem are steadily increasing. The more publishers there are on the platform, the more attention there is on the platform and thus the more attractive it will be for advertisers to use Brave instead of competing ad networks. In order to do that, advertisers will be required to build up BAT reserves to pay users with.

OVER THE LONG TERM, ADVERTISERS WOULD HAVE TO ENGAGE IN SOME FORM OF RESERVE MANAGEMENT ON THEIR BAT HOLDINGS, IN ORDER TO LOCK DOWN A BEST PRICE IN TERMS OF USD, AND OPTIMIZE THEIR COST BASIS.

The model is already getting some traction, most of which comes from the crypto-native community. The quality of ads that Brave shows is relatively low, with the majority of the advertised brands being VPN and exchange products. Unsurprising - given the type of user that has become an early Brave adopter, but for the product to become stickier, I feel we would have to see better quality advertising.

Brave token economics from the ground-up

Earlier on, I mentioned that I see BAT's utility as * only * a payment token, as a net negative. The reason why, is that it introduces a lot of overhead for advertisers. There is virtually no reason for merchants to adopt a highly unstable currency equivalent as means of payment in order to reach audiences, except perhaps for if they are long the platform itself - in which case the presumption becomes that every merchant will wear an investor hat. Even then, the case for pure payment tokens is grim as the aforementioned adoption mechanism is a zero-sum game.

If the majority of token economy participants decide to just build up reserves of the native payment token, you would have to assume that their involvement in the Brave ecosystem will not drive the majority of their business, so long as running costs cannot be covered using said token without exchanging it for fiat. In itself, that limits the addressable market.

Now, if the majority of participants decide to not be exposed to volatility and sell down on their token denominated income immediately upon receiving it, then everybody else is incentivised to do so - or be left holding the bag. If we agree that this dynamic is true, then it creates the perfect conditions for a race to the bottom.

The final argument that could work in Brave's favour, would be that the product will be so irresistible and as such attract so many users, that it will be impossible for advertisers to ignore it.

THIS COULD BE THE CASE FOR BRAVE, ONLY IT CAN'T, AS LONG AS ITS CORE VALUE PROPOSITION IS -  QUITE LITERALLY - BLOCKING ADS.

I have been using Brave with the Rewards feature on for 3 months now as an experiment and earned 5.9 BAT thus far, which amount to $0.5 pcm at current prices. In western world standards this is inconsequential. Personally, I would rather pay 3x as much to not have to bear with ads.

It’s neither stable, nor volatile - what is it?

For almost 2 years now, BAT's price has ranged between $0.15 and $0.50, and while that makes a good case for relative stability enforced by market forces, it certainly is not as good as a stablecoin's, while it doesn't seem to have the potential for a moonshot either.

Given this price action history, one would expect those advertisers that decide to build BAT reserves to drive up the price to ~$0.5, at which point cyclical sellers would be triggered and they would drive the price down again. Conversely, at prices near the $0.15 level, utility seekers would start buying up reserves again. Without a systematic mechanism to break the cycle, I could see it just endlessly repeating. Good for the speculator that is interested in taking advantage of that cyclicality, but bad for almost everyone else.

A better model would be one predicated on some sort of stablecoin, where BAT would be the protocol asset that would give validators that would stake it access to ledger fess.

We are increasingly seeing traction in the work token space, with Terra's dual token model providing for a good example.

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Key Takeaways

• There is a hidden negative multiplier effect in the Terra system, that will dampen the price of Luna - until a network effect is reached.
• There is a hidden viral loop in the Token economics, that incentivizes merchants to also be stakers and enlist as many other merchants as possible to drive their unit costs down.
• The interplay of the two loops optimizes for long-term oriented actors to populate the consensus layer, a net positive.
• Both the decision to start with Korea, and the go-to-market strategy Terra is deploying, are moats in the making, if executed well.
• Luna lost ~75% of its value since listing in Q3 2019. At current prices, pre-sale investors are likely at break-even, having already booked (some) profit.
• Conservative estimates from a DCF model, show that Luna, at current price levels, is undervalued by between 38% and 67%.

What is Terra?

Terra is a stablecoin project out of Korea that deploys a seigniorage shares model in order to algorithmically ensure stability in the system. This is not the first time we see an asset of this type hit the market - Basis and The Reserve are the two most prominent ones that jump to mind. However, where its predecessors have thus far failed, Terra is getting promising traction.

Terra's base layer token economics

Terra is essentially composed of 2 tokens that live in parallel; Terra and Luna. Terra(X) is the stablecoin component - where (X) is any fiat equivalence supported on Terra (e.g X = KRW, USD etc), and Luna is the protocol token. Terra powers the user facing part of the terra.money platform, while Luna - a fixed supply variable price token - powers the infrastructure.

The blockchain layer in Terra collapses the multiple layers of payments processors present in modern day e-commerce and P2P payments value chains, and manages to reduce the cost of executing transactions by as much as 80% - ledger fees start a default of 0.1% and are capped at 1%. Validators have to stake Luna in order to be granted the right to validate blocks and access a perpetual stream of ledger fees as a reward for their work - and equivalently are exposed to slashing if they are found to misreport ledger state. A validator's Luna stake represents pro-rata odds of generating Terra blocks; i.e. the more Luna you stake, the higher the expected value of the rewards you claim. Luna holders are also granted governance rights over the fiscal stimulus treasury - endowments to dApps that apply to the Terra ecosystem.

How Terra maintains stability

Terra maintains stability by algorithmically adjusting the money supply. In an excess demand condition, where Terra would go off its peg on the upside, the system mints more Terra and burns an equivalent (according to the spot exchange rate) amount of Luna. Conversely, when Terra is experiencing a lot of selling pressure, the system mints and auctions more Luna in order to buy back and burn Terra - contracting the money supply and diluting Luna holders.

A hidden negative multiplier effect in the stability mechanism

Herein lies the first issue with Terra's model; validator dilution. Until the stablecoin instrument has enough brand recognition, trust and ultimately network effect, so that the perceived risk of holding Terra on balance sheet is low, merchant incentives remain somewhat warped. Here's what I mean:

1 unit of TerraUSD on balance sheet is worth less than 1 unit of fiat USD, due to their differing counterparty risk profiles.

The former is backed by a consortium of private actors, while the latter is backed by the US government. Until a network effect enough strong enough to persuade merchants otherwise is in place, they are incentivised to offload that balance sheet risk and head for the nearest exit to government backed fiat.

The effect is continued dilution for Luna holders.

Similarly, in the pegging process described earlier - where equivalent values of Terra and Luna are arbitraged away to bring the peg to balance, in order for the arbitrageur to book profit, they need to immediately liquidate the Luna they receive in equivalence. If that incentive structure holds, then not only are validators diluted by inflation in the short term, but the value of their Luna holdings reduces further as market makers immediately offload the minted Luna to market, increasing the available supply of the asset. Absent a network effect, this dynamic acts as a negative (unintended) multiplier in the Terra system.

Compensating validators for dilution

To incentivise validators to weather the storm, Terra introduces long-term validator incentives in the form of inflationary rewards (currently ~10%). Effectively Terra is inviting potential validators to ride out the J-curve with them and collect beans in the process. At a high-level, the idea makes sense; the negative multiplier effect should hold only until the network effect is reached. Once that is achieved, then the loop should turn from adverse to virtuous, and value would start to trickle back into Luna tokens.

A hidden viral loop in the token economics

Things get interesting when the boundaries between merchant/user of the Terra blockchain and validator start to blur. There is no provision in the model to explicitly prohibit merchants from also become holders of Luna and validators in Terra's consensus. In fact, it seems that Terra implicitly optimizes for that. Of course, not all merchants will wear investor hats, but potentially the more savvy (and dare I say the more influential) will recognise that since they are already long the platform as early adopters, they can leverage up on the upside by staking Luna, while reducing their unit costs and hedging the downside, by collecting ledger fees.

Now were that the case, merchant validators are even more incentivized to evangelize Terra; the more merchants on the platform, the more ledger fees they would collect, the more their unit economics would improve and the quicker the platform would get to the critical inflexion point, after which the Luna economics turn positive.

As positive as this might be though, so long as local governments remain skeptical of cryptoassets, it is unlikely that this viral loop will be activated.

Demand for txs = value appreciation for Luna

By now, it should be clear that Terra has been architected in such a way, that makes demand for transactions the critical variable in its value model. So far, the team has implemented 1 stable pair - the Korean Won (KRW), with plans to expand in a multitude of currencies that include the USD and the IMF's SDR.

From a strategic standpoint, the decision to start with the KRW seems smart for a couple of reasons; (i) Korea is one of the most technologically advanced countries globally, with the 2nd highest % of Information and Communication Technology as a proportion of GDP, and 2nd highest % of R&D spend among OECD countries.

Not only does that improve the adoption potential for Terra, but also (ii) given the relatively insular nature of Korean currency markets (see: Kimchi premium), it provides for a "natural" incubator by protecting Terra from external competition. That allows Terra to iterate fast and capture market share in the Korean and ASEAN markets, leveraging local networks, while ironing out the model and improving its potential for further expansion.

Further, the team has explicitly targeted e-commerce as the first market they will be focusing on, a burgeoning industry that has been experiencing anywhere between 5% and 65% CAGR in the region, over recent years. One of Terra’s core strategies is to build an alliance of e-commerce sites and operate as a payment platform for them. The Terra stablecoin may also be offered as an incentive for those making purchases on these sites - a strategy that is serviceable due to the cost efficiency that Terra's blockchain back-end achieves.

In order to bolster their go-to-market capabilities, Terra launched CHAI, a consumer facing e-commerce application for everyday purchases (to illustrate, a large proportion of purchases are reportedly for rice) that works with Terra's blockchain as the back-end payment rails. According to reports from Terra, CHAI has seen 250k sign-ups since launching a few months ago, with $1.3M volume processed.

A quick look at the Terra block explorer points to an approximate equivalent $1.5k as the current daily transaction volume - a figure that pales in comparison to legacy internet native competitors. To illustrate, appox. $200M daily volume processed by Adyen, a Dutch competitor of Stripe that recently underwent an IPO at an $18B valuation. Be that as it may, in the short few months the platform has been live, volume has been growing linearly, showing a healthy - albeit pre-exponential - growth pattern.

While somewhat protected from global markets competitors, Terra faces strong domestic competition from Kakao/Klaytn (who has also a stake in Terra), Toss and other legacy payment solution providers.

Should one be a buyer of Luna at this point?

Terra has secured $32M from Polychain, Arrington XRP and Binance Labs - among others, in a sale that concluded in September 2018. Various ICO listing sites point to the ICO price per Luna token, standing at $0.80. Given the pre-sale patterns we have seen over the years, we could speculate that the price that early investors came in is closer to to $0.2. Anecdotal information we have collected, point to Luna tokens changing hands OTC pre-Mainnet for as much as $2.4 per Luna, which would have put early investors at over a 10x return at that point.

Currrently, the token is trading at $0.43, having listed at approx. $1.7 per token; that's a 75% drawdown, that puts the early investors in the 2x gain region - likely with more realised already, and less of an incentive to sell down on the remainder of their positions.

Valuing LUNA with a DCF

To further put some context on current price levels, we went ahead and repurposed a model built to value Perlin's native token, the PERL, and applied it to Terra's specific case. The premise is that a DCF model applies really well to valuing Luna tokens, as staking Luna is a claim to a stream of future cash flows (tx fees).

Model assumptions

We benchmarked the 3 industries that are most relevant to Terra (shown below), projected their growth in tx volumes according to 3rd party estimates over 10 years, estimated how much share blockchain based solutions are poised to capture over those 10 years (different S-curves) and made an assumption on the proportion of the blockchain quadrant Terra is likely to represent in each industry.

The main assumptions that govern the model beyond the ones mentioned above, are:

• a 0.35% tx fee - adjusted downwards from the average {0.1% to 1%} to reflect the cost of running a validator
• a 40% discount rate - industry standard for VC
• an 80% main use case contribution level - assuming that most of the value transacted on Terra will come from the 3 industries benchmarked
• a 25% staking rate - reflecting the current state of Luna staking / total supply
• a 2% annual growth rate after the 10 years modelled to capture the terminal value

You can access the model here.

The result on the base case scenario, is an estimated $0.72 per Luna, at a $180M network valuation.

Given current price levels, this represents between 38% and 67% upside, depending on whether we benchmark on tokens staked or overall network valuation. What is interesting about the result is that in a scenario building exercise (changing one of the key variables and keeping all else constant), the base case outcome sits a few standard deviations to the left of the mean, implying that at this point there is more upside to owning Luna than downside.

To illustrate, if we assume that 50% of the tx volume on Terra will come from other than the 3 main use cases, then the fair price per Luna token stands at ~$1.3 (3x from current value). If we further relax that assumption to 10%, then the projected upside stands at 10x. Equivalently, while exploring different discount rate levels (reflecting different levels of perceived risk), we find that a 50% discount rate yields a fair price of $0.33 per Luna (a 25% downside), while a 30% rate yields $1.62 per Luna (a 4x outcome) and so on.

What is rotten in the state of Denmark...?

There is a lot that's right about Terra; a great team, a straight-forward token model, a very technology-friendly home market, the potential for explosive growth in the coming years, an attractive current valuation and not many project specific risks.

Regarding the latter, there are three main risk drivers that stand out in our research - namely (i) the hidden negative multiplier - covered in an earlier section, (ii) the risk that price oracles introduce in the model, and (iii) the time-lags that exist in the stabilisation model.

As far as (ii) is concerned, this is a problem that underlies the whole blockchain industry. There are currently various solutions being iterated upon, including some higher profile ones from Chainlink and Maker DAO, but also some newer ones like DIA and Band Protocol.

Regarding (iii), the risk here lies in that the supply side mechanisms that ensure the peg remains stable will be slow to react to demand side fluctuations - or that the market won't pick them up soon enough. At the scale Terra is at now, the effect should be miniscule. However, in a condition of large transaction volumes, this could lead to poor price discovery for Terra users and a lot of unintended costs creeping up on merchants' and users' balance sheets, effectively eroding the usability and cost base advantages that a stablecoin can introduce in an e-commerce context.

A failure in this area after the Terra network has reached critical mass, would introduce an existential risk to the platform, as if not amended with immediacy, it would likely erode its core value proposition and breach trust with the merchants operating on the network.  We see this as a a key milestone for the project to clear, and will be monitoring progress closely on that front.

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Introduction

2019 has been quite a ride for global markets. The year started with a rallying S&P and confident markets which quickly transitioned into fear, uncertainty and doubt, as the Sino-American trade war took center stage and the yield curve inverted for the first time since 2008, summoning fears of an impending recession.

In that environment, cryptoassets had a mercurial H1 2019, coming off of a brutal bear market in 2018.

Emerging cryptoassets within the cluster outperformed the average in Q1, passing the baton to Bitcoin in Q2, which led the way with a 230% appreciation, bottom-to-top, from April to July 2019. At the time, there were strong indications that the pent up demand for capital flight from China found a suitable vehicle in Bitcoin, as global economic uncertainty rose [1]. However, this did not sustain for long, leading the overall asset class to deflate by 50% over the course of H2 2019.

Although Bitcoin failed to meet expectations set by the excitement garnered by 1H19’s run-up to $13k per BTC, the asset class overall is once again the best performing for the year, returning +90% beginning to end, whereas the NASDAQ returned +38%, the S&P +31% and REITs +27%.

Be that as it may, the sentiment among market participants - at present - is much bleaker than the absolute YoY performance implies, reminding us that biases are omnipresent in how sentiment manifests in markets. In this case, it is an anchoring bias, a recency bias and loss aversion in full effect [2].

As Bitcoin descended from July highs for most of 2H19, the trade war fears were dispelled and under the onlook of a dovish Fed, the Dow and the S&P both broke to new all-time highs.

Considering the developments on the ground within the world of cryptoassets, we are - quite frankly - dumbfounded by the weak sentiment.

While being cognizant and appreciative of the limitations of cryptoassets and the challenges that lie ahead,  we cannot help but continue to be optimistic about the medium and long term prospects of the asset class.

2019: a year of quiet infrastructure development

Our thesis has always been that there are two forces that charge the adoption of cryptoassets; 1. top-down adoption by institutions and legacy finance, and 2. bottom-up adoption of Web 3.0 and Open Finance innovations and primitives by the general public.  

2019 was a year of steady infrastructure development and deployment in both of these areas.

TOP DOWN

2019 saw a continuous stream of innovation in institutional infrastructure, with cornerstone products such as digital asset custody and derivatives being delivered and further developed from both legacy players such as Fidelity, ICE and the CME [3], as well as crypto native players such as Coinbase, BitGo and Binance [4]. These advances are bringing mature and trusted prime brokerage solutions closer to the cryptocurrency industry, and will enable the deployment of ever more complex strategies at scale, while simplifying the complexity at the base layer of this technology, head-on.

At the same time though, 2019 saw multiple rejections of applications for a Bitcoin ETF - and for good reason. The market is still fairly fragmented, small and immature for an ETF, with a prime example being the lack of a generally accepted and agreed upon true price of Bitcoin. Despite this, in December 2019 Charles Schwab reported that Grayscale’s Bitcoin Trust is the 4th most popular equity amongst Millennials in their customer base - more popular than Netflix or Berkshire Hathaway [5].

As progress in data pipelines is made and liquidity improves, the uncertainties around the asset class will become increasingly less, at which point we expect to see the development of products that will make Bitcoin’s inclusion into ISAs (Individual Savings Account) and IRAs (Individual Retirement Account), a matter of routine.

While we do not believe that this will become commonplace in 2020, we do believe we will see material progress in that direction, both in regulations, and in market structure/infrastructure.

Once that milestone is cleared, and the asset class has grown sufficiently to become even more generally accepted, the probability of it being included as an asset of pension funds and endowments increases dramatically. The most forward thinking of the largest allocators are already getting smart in and around the asset class, primarily via allocating to Venture Capital [7], while some have started dipping their toes in direct token purchases.

The last but perhaps most important piece of the puzzle for top down adoption is regulatory clarity - or, at present, lack thereof. Bitcoin’s Q2 ascent was accompanied by the announcement of Libra - Facebook’s blockchain-based stablecoin initiative, that would bring digital wallet infrastructure to Facebook’s massive user base.

Libra’s launch was soon put on hold by US lawmakers, with both Mark Zuckerberg and David Marcus (Libra CEO) having to undergo multiple rounds of hearings in front of the US Congress and Senate. The most important takeaway to come out of those hearings, was the lack of alignment among members of the House and Senate, which continues to spell uncertainty for entrepreneurs and managers in the space.

Meanwhile, in October, Xi Jinping publicly labeled blockchain an important strategic focus for China, causing a flurry of activity in the market [9].

Amongst the most notable events to follow, the Bundestag issued a decree enabling German banks to sell and custody crypto starting 2020, the ECB announcing a proof-of-concept for anonymous transactions using central bank backed digital currency, and more recently a draft bill entitled “Crypto-Currency Act of 2020” was introduced in the US House of Representatives.

Given the sense of urgency that China’s aggressive move seems to have instilled in its counterparts, we believe that 2020 is going to be a pivotal year for a much needed regulatory framework that will de-risk the emerging asset class.

BOTTOM-UP

Even in the face of structural uncertainty, in 2019 the builders have been hard at work and their labour is already bearing fruit - with Ethereum (#2 public blockchain and #1 smart contract platform by market capitalization) the clear leader in attracting developer interest. Ethereum has been a hotbed for developer activity, with Open Finance (or DeFi) use cases finding notable traction.

There are now stable value issuers (e.g. Maker DAO), loan facilities (e.g. Compound), market makers and exchanges (e.g. Uniswap, Kyber) and derivatives products (e.g. Synthetix) that are fairly well established, while we are seeing use cases in insurance (e.g. Nexus Mutual), interfaces (e.g. Zerion), and payments (e.g. xDai) emerge.

These protocols and applications live purely on-chain, are largely software operated and have processed multiple hundreds of millions of USD in loans, payments and collateral value in 2019 [10].

Over the course of 2019, Ethereum became a lot more expressive. There are now more frameworks, IDEs and mature blocks of value within Ethereum that can be used as references for new applications, enabling developers to deploy a wider array of features, faster than ever before.

Given the product/market fit that the category is showing, Ethereum’s lead in developer mindshare and maturity of tooling, but also being cognizant of the platform’s scaling and governance limitations , we believe this to be the space where most value will be created and captured in the next 2-3 years.

It is indicative that in an indexing exercise exploring 2019 returns, DeFi has been the standout performer, primarily driven by the mercurial H2 performance of Synthetix (SNX) - a 30x run. Additionally, the money and finance related indices have strongly outperformed all other clusters in 2019 - a clear indication of where product/market fit can be found at present and how much it matters to the market.

Some of the areas that we are excited by within the cluster, are synthetic asset solutions that will reduce collateral ratio requirements, allow for legacy assets (e.g. equities) to be printed on chain and transacted at a fraction of the cost of traditional brokerages, enablers of new forms of hedging risk for crypto native businesses (e.g. hashrate derivatives) and - well - new forms of leverage. After all, given the early stage we are currently in, speculation largely remains the main use case.

Concurrently, in 2019 we saw glimpses of the rise of domain specific chains. Different fee structures for platform resources and performance limitations and trade-offs across different chains create breeding grounds for fundamentally different applications (e.g. Flow).

As such, while Ethereum has found traction in use cases that are described by low friction and high transaction value, chains like EOS - and more recently WAX - are finding traction in high friction and low volume applications (e.g. games & gambling) [11].

While - in theory - Layer 2 solutions can allow for such applications to work on slower chains, it is hard to argue that these solutions will provide a more compelling alternative to chains that are purpose built to withstand heavier loads. Then again,  whether or not the necessity for transaction speed will trump the value multiplier that a network effect can be, remains to be seen.

Most of the aforementioned platforms are still in their infancy and others are yet to launch, as is the case with the interoperability bridges that will allow value to frictionlessly traverse through different blockchain ecosystems (e.g. Cosmos).

We see the next two years as the time when these platforms will prove (or disprove) their viability and pave the way for fulfilling the Web 3.0 vision from 2021 onwards.

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In Jan 2019, while at The Graph Day 2019 in SF, I caught Tara Tan’s presentation on designing for users in crypto. I immediately thought it was powerful.

A combination of data that lay the problem bare (e.g. 42 or so user steps to use Maker DAO) and allegories that made the subject relatable (e.g. the bicycle being a fringe technology until it became user friendly - read: dominant design) carried an important message through; crypto needs design thinking for the next 1M of users to hop on board. But perhaps more important than the message, was the delivery; a succinct, cogent and well designed presentation which proves the message’s point in this case.

Intrigued, a few months later I got in touch: “hey - loved your presentation at The Graph Day, let’s connect and see if there’s common ground we can work on together”. Fast forward to June 2019 we had a plan to draw up a report on the state of adoption in crypto. We quickly realised that in order to create something impactful, but also true to the facts and thin in bias, we would need help.

Enter the State of Adoption 2019/2020: a collaborative report on the state of things in crypto, pulling data and insights from world class operators (e.g. Bison Trails, River Financial), investors (e.g IDEOVC, Outlier Ventures), data co’s (e.g. Token Analyst, Dune Analytics), native to the cryptoasset ecosystem.

With this piece of work, we aim to align investors and entrepreneurs already active in the space, but also intrigue and inspire those that are curious, with respect to where we have been, where we are at and where the opportunities lie ahead.