narrative crypto vs usable crypto

i used to think crypto as one giant world, but recently my whole perspective shifted to always think crypto as two major worlds, particularly from builders pov: 1) narrative crypto 2) usable crypto i’ll explain how to exactly think about them and build/make money out of it.

usable crypto

they’re typically ‘best businesses’: - wallets (@ phantom, @ MetaMask) - stablecoins (usdt, usdc) - exchanges (@ HyperliquidX, @ Raydium, @ JupiterExchange) - launchpads (@ pumpdotfun) - bots and trading terminals (@ AxiomExchange) - defi (@ aave, @ kamino, @ LidoFinance) and so on. it just works! (and generates massive $$ revenue)

narrative crypto

there’s typically a good story/vision ($100b+), strong enough to change the world: - btc (story on better money or digital gold) - ai x crypto (most gpu infra & agent frameworks) - desci or ip shit (story protocol) - newer l1/l2s (eg. stable l1s or perp l2s) - privacy (@ Zcash) - restaking and any other random infra - x402 it hardly generates revenue, but it makes token goes up because of the story which lures both institution and retail. now, narrative crypto and usable crypto aren’t mutually exclusive (but collectively exhaustive). think about this:

there are v folks who actually use zcash (5-10k txns per day), but it has a v strong narrative of privacy rn and hence, higher attention. and it’s highly possible that this attention also drives usability (see recent spike). similarly, x402 from @ CoinbaseDev has hardly any usage but it’s the talk of the town recently and it’ll def. drive more awarenessusage from speculation

zcash txns per day (source: bitinfocharts.com)

i always think of this as a spectrum:

(sorry, if your logo is misplaced or not here - feel free to point it out!)

and both are equally important as both feed into each other:

narrative crypto drives → speculation which drives → adoption for usable crypto

at usable crypto, your product (users) are king, while at narrative crypto, your community is king.

builder dilemma

every builder has this dilemma whether to build for narrative or usable crypto.

a thumb rule is:

––– if you’re good at the attention game and have enough charisma to create a movement (or you’re scammy enough - it’s a skill and a compliment!) –– you should build for narrative crypto.

for instance, if you’re good at token game (and cex listings/cabals) - you hould focus on building a grand narrative and vision

and ofc, if there’s enough momentum, it’ll be useful enough too - for instance, for blockchains like solana, where capital do attract talent and it makes those chains useful.

if you wanna have have a $1b+ narrative, you’ve to think from first principles on what’s unique possible using crypto rails.

is the vision convincing enough to have a $100b+ market, if it works? is it exciting enough to be hyped among retail?

(for instance, plasma had the $1t+ stablecoin market narrative to TGE at $14b, despite no real usage yet)

––– if you’re great at building product, you should build for usable crypto - where you solve a niche segment (eg. axiom for memecoin traders or a defi protocol).

usable crypto is about building; what traders (or crypto natives) would directly (terminal/exchanges) or indirectly (stablecoins) would need.

and it doesn’t need to just fuel speculation, the same product can have non-speculative use-cases too (stabecoins for payments).

and here narrative is also important (for polymarket, it’s prediction markets) -as narrative do attract users. think of narrative as marketing.

ofc, you can end up building for both, but it’s always good to focus on one to start with and it’s p difficult to identify your strength. you’ve to find your edge.

for traders

you always have to bet on narratives.

you bet on the narrative you think will be the most forward looking narrative in the next few weeks or months or years.

everyone trading tokens is playing the game of ‘attention arbitrage’ i.e, — buying what’s gaining attention and selling what’s already had its moment. eg. rotating perp coins to privacy coins (and now ai coins).

on a particular narrative, you’ve to bet on teams you think will be able to get attention and be the alpha/beta play. if they’re able to do it, your bet will take off.

tldr

both usable and narrative crypto are important aspect of crypto.

as a builder, always choose one to start with and be v strong in either narrative or usability. once one is nailed, you can then expand to other and that’s the endgame.

personally, i’ve learned this the hard way in my last 1 year of being a full-time founder. i used to always midcurve it.

but it’s a game at the end of the day. a game you’ve to play as per the rules of the markets!

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