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THE RUSSIA / UKRAINE CONFLICT accelerates several of my 2022 predictions, creating the perfect storm (and narrative) for the polarization (for the democratization) of permissionless access to decentralized finance VS the demonization of crypto as means to avoid sanctions.
Therefore we likely see an acceleration the need for strong government surveillance and implementation of such sanctions against nefarious global actors. With an Executive Order moments away, here we go…
- KYC REQUIREMENTS HYPERACCELERATE - KYC infrastructure accelerates immediately due to regulatory mandates and need to enforce global sanctions. Pressure is already building via FATF, US executive orders, EU’s MiCA implementation in April.
- WALLETS BECOME PASSPORTS - Wallets will emerge as a three dimensional passport - creating identity (driver’s license of sorts), payments (credit cards), and voting (Voter ID and track record).
- VALUATION COMPRESSION - As VC warchests deploy these next 3-6 months, vaporware evaporates, and everyone wakes up to value and what is real in the wake of economic and political strife, valuations come down, rounds continue to grow in size, as advantage goes back to VCs and away from founders.
- SoV TOKENS ACCELATE AS SAFE HAVEN - XRP case settles imminently and serves as an additional catalyst for flooring of core SoV tokens - teeing up ETH (retail), XRP (b2b), and BTC (pure SoV) as regulatorily sound, and we see flight of capital from vaporware to SoV simultaneous with institutions stepping into exposure.
- DAO TOOLING / MARKETPLACES - DAO tooling and marketplaces continue to firm up as gig workers flood into DAO participation and social support these coming weeks in search of ways to donate, put donations to work, and access project based compensation.
- TREASURIES BECOME PRODUCT HOLDING COMPANIES - Treasury management forces consolidation into holding company platforms (Consensys model) over the next 3 months as vaporware cooks off, compliant platforms become differentiated, and treasuries finally go to work at scale.
- TRADITIONAL MARKETING IS KING - Marketing (non crypto) becomes a core revenue driver and spend, as mass retail emerges as the next frontier (beyond native degen), and requires a leveling up of management teams and business models (gamification, UX, revenue, etc.).
- METAVERSE EXPANDS AS DEFI CONTRACTS BEFORE EXPLODING AGAIN - Metaverse investments become attractive due to TAMs and longer term bastion / clarity to DeFi before regulatory flooring events. Brands are doubling down in the metaverse, and physical redeemables are a grasp away.
- CBDCs ACCELERATE IN THE WEST - US, UK, and EU accelerate CBDC development for surveillance, and force stablecoins into charter system…announcements in bound. Good for everyone longer term as folks realize pseudo-censorship resistance of blockchains while maintaining reasonable traceability for tracking illicit funds. Asset-backed stablecoins get wrapped up and put in the charter box.
- ENFORCEMENT ACCELERATES - Sanctions ARE the flooring event and jet fuel for regulators to accelerate any and all agendas with respect to enforcement across DeFi and financialization of NFTs and Web 3.0. Will see some examples these next few weeks.
- GLOBAL FATF/VASP PARITY - Havens dry up through summer as governments are forced to adopt VASP standards in order to interact with tier 1 western economies. This looks like broadly adapted uniform VASP regimes and passportability (similar to EU’s MiCA) at a minimum.
- CASH FLOWING PROTOCOLS SEE RAPID GROWTH AND VALUE ACCRETION - Institutions and investors in the space will want exposure to traditional business models built from a Web 3.0 perspective, and will put a premium on models they recognize (good for storage - AR, middleware - POKT, API3).
- WALL STREET CONSOLIDATES CRYPTO THROUGH M&A BY FALL - The traditional broker dealer tech stack emerges as banks consolidate crypto custodians as they become RIAs and crypto OTCs that are licensed (and partner with crypto RIAs).
- TRACEABILITY GETS GUARDRAILS - Chainalysis is the real Palantir and big governments’ T1000. The good and bad of on chain tracking and analytics both bolsters the case of implicit blockchain transparency, AND warrants an outcry from the community.
- NFTs BAKE OFF AND INFRASTRUCTURE EMERGES - NFTs take share more quickly than DeFi given lack of regulations, traditional IP and trademark frameworks are somewhat more liberal, and traditional brands cascade into the space for both experience and marketing.
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