Welcome to Talking Narratives by Sun Tzu Academy. Every couple of weeks, we sit down with a crypto fren to chat about the latest narratives and what's on the horizon.
For our debut, we are excited to have @TheDeFInvestor, one of our favourite CT figure and known for his brilliant weekly alpha threads!
Current Narrative and Projects
The main narrative I’m interested in right now is GambleFi.
$RLB had a crazy run recently, and I think that many other tokens from this sector will follow. Some of them are already pumping.
What I really like about this narrative is that the sector's major projects have undoubtedly found product-market fit, so there’s not just hype without strong fundamentals.
Rollbit alone is generating hundreds of millions of dollars in annual revenue, and I don’t see why $RLB couldn’t reach a $1B market cap one day if the project continues to grow at the current pace.
Another project that I find interesting for a short term play is WINR. What caught my attention is that the team of WINR is also building their own Arbitrum L3 for on-chain gambling. In this way, they're capitalizing on the hype around Ethereum scaling solutions and GambleFi at the same time.
I believe the staying power of the GambleFi narrative might catch a few off guard. It's clear now that it boasts both a Product-Market Fit (PMF) and a lucrative revenue model. My thoughts on GambleFi summarized in one tweet below 👇
@TheDeFiInvestor discussed RLB, and there's already a buzz with numerous threads on WINR (which, by the way, I touched upon a month ago) and DMT. So, I won't just rehash what's already out there. However, I've been vocal about my bullish stance on COCO.
Patrick(@PonziTraderx) just announced the third revenue share earlier today, A sum of $103K will be distributed to holders with at least 50k COCO(I secured a neat 0.05E from it). this suggests an annualized revenue of $5.35M and a P/S ratio of 1.31.
Let’s put that into perspectives:
At Rollbit P/S(6x) - COCO price: $0.32, 4.6x from current price($0.07)
At Uniswap P/F(6.18x) - COCO price: $0.33, 4.7x
At 10x P/S - COCO price: $0.534, 7.6x
At Unibot P/S(14.6x) - COCO price: $0.78, 11x
Let's consider the revenue share in terms of APR. Currently 450 people qualify for the revenue share, a jump from 385 just about a week ago. Given this week's revenue stats, holders are raking in an impressive ~100% APR, paid out in ETH. For a bit of perspective, Unibot holders are clocking in at around 13% APR.
From the charts above you can see that whenever Unibot's APR touches the 30-40% mark, there's a realization that the Unibot token might be undervalued, leading to a buying spree. I anticipate a similar trajectory for COCO. The only hiccup? Trust. The COCO team hasn't exactly been an open book regarding the percentage of tax revenue funneled into revenue share or the performance metrics of their platform(so does Rollbit during the early days). However, if you've tracked their impressive two-week delivery streak and have faith in the team, COCO should be on your radar.
Another GambleFi project I have my eyes on is actually $HAMS, right, the hamsters racing coin. Before you quickly write this one off, did you know that a newly KYC’d team took over, and they are building a full-blown hamster themed online casino? Here is a recent update 👇
TL;DR:
New team
KYC’d with Phenix Finance and CertiK
Smart contracts will be audited by CertiK
Gambling license applied, ETA within 2 weeks
Lead dev will publicly DOX post license
Hamster themed online casino in the works, frontend done
Given its current valuation, I think $HAMS worth paying attention to.
Every single influencer has a casino token to shill kek. However, here are couple that you probably overlooked.
I been following this one since launch, I was impressed by the way the team handled the launch. Due to block 0 snipers getting the blacklist treatment, a whopping 38% of the supply is locked up for good. This leaves less than 20% in circulation, translating to a circulating market cap of under $300K.
ALLIN is a telegram casino bot, I've tried my hand at blackjack on it, and it's swift, user-friendly, and, let's be real, pretty darn addictive. Unlike TG sniping bots, you don’t need to share your private keys with the bot. $ALLIN serves as the in game currency, winnings are paid in $ALLIN, and losses are burned. Given the house edge, this design inherently makes $ALLIN deflationary. $ALLIN is really under the radar, but people have been enjoying playing it. You can find the deposit history here.
In terms of roadmap, the team's zeroing in on rolling out a Discord betting bot and expanding the game roster – think roulette, PvP blackjack, poker, and more.
Started as a NFT collection on AVAX, a few community members took over and built an online casino. The lead dev @VirtualQuery has been a long time builder on AVAX, made a NFT analytic/aggregator tool in the past. FerdyFlip has had over $3M wagered since inception. The team has been teasing a $FERDY token since May, and confirmed FerdyFish will expand to other chains.
The main NFT collection earns platform fees. At the current floor price 198 AVAX, FerdyFish has an implied marketcap of $737K.
I think GambleFi or decentralized casino will stick around for a little bit. There are bunch other GambleFi projects with potential which we will cover in the future issues. GambleFi summer's in full swing, so place your bets and enjoy the ride.
@Winter
2023 has been a lot of chop in the majors with few days of pump, where most are either chopped to zero or sidelined till better conditions. But there are still small fraction of degens made generational wealth. It started off with meme wave from PEPE to gamblefi, hopping sector to sector. But in my opinion, the biggest narrative is Hated Rally, to be left curve until it’s right curve.
The key is to bet on something absurd that it seems stupid or against the moral ethics (of course, don’t throw net-worth into outright rugs) A closer thought, crypto itself is sort of a left-curve, only criminals and unlawful would trust some computer codes on the internet to secure their money. But here we are, keeping significant wealth on the blockchain.
@TheDeFiInvestor & @rektGEMS talked about gamblefi and bot meta that outperformed and likely to continue.
Gamblefi- Sentiment on gambling turned from “morally wrong” (left curve) to “it’s just a good business” (right curve). Rollbit used to be shady online casino which didn’t honor winnings withdrawal to future exchange that will handle significant trading market share.
Bot meta -
Entering private key into a telegram bot that can trade faster? Sounds like a big no-no in a bull market when things must be righteous and glorified. It is fundamentally opposing the idea of self-custody. However, when things got to pure PVP and Jared is having every swap transaction as his big sandwich, UNIBOT and co became the solution despite challenging the self-custody idea. I think you get where this is going, left curve to right curve.
Gamblefi - majors like RLB, WINR and DMT, COCO more gamble one. Why? They allow to ape with size and get good return. There are some small ones like ALLIN and BAZED, but small bets.
Bots szn 2 - Unibot, Loot (end of presale vesting soon), DARK, Saint (good shilling and smart wallets are buying) + new with unique offerings.
Future Narratives and Projects
In the long term, the narrative I am most bullish on is RWAs (Real-World Assets). For now, I’m mostly interested in stablecoin projects that are starting to use real-world assets such as Frax Finance.
Many people argue that a stablecoin backed by real-world assets cannot be entirely decentralized. This is somehow true, but I’m not sure if there’s any way to build a scalable and fully decentralized stablecoin at the same time.
Apart from this narrative, I am also highly interested in LSDfi.
Investing in LSDfi projects, in my view, is akin to a leveraged bet on ETH, as they directly benefit from an increase in the ETH staking rate."
Pendle Finance is my favorite project from this category by far as I think that yield trading products have a lot of room to grow, but I’m also looking at other ones such as Eigenlayer and Lybra Finance.
I’m on the same page as @TheDeFiInvestor here. I believe RWA will shape up to be as big a narrative as the LST wave we saw earlier this year, if not even more impactful. I think a lot people are thinking the same, but the inherent complexities of RWA (think regulations, KYC hoops) mean it's a slower burn for teams to get everything in place. But here's the silver lining: unlike the DeFi protocols we've seen that can be cloned in a heartbeat, replicating the success of an RWA venture will be a tall order.
There are barely any actionable RWA plays out there. The ones live right now either requiring KYC or running a B2B model. So I believe the first permissionless, DeFi native RWA project that on-chain community can participate in will likely do very well. cough TProtocol cough.
Couple other narratives I want to keep an eye on and do more research:
- Account Abstraction & EIP-4337: AA was probably the most talked about topic at ETHcc. We're at a juncture where the crypto and blockchain infrastructures are set, but to truly bring the rest of the world onboard, we need to up our UI/UX game. With EIP-4337, it’s likely that the way we currently interact with crypto wallets will completely change in the next couple years. That leaves room for projects like SEND to flourish.
- On-chain Prediction Market: Polymarket has dominated this sector by far, and it goes viral in mainstream every couple months whenever there’s something crazy happens. As the GambleFi narrative unfolds, I foresee a surge in interest towards on-chain prediction markets. With prediction markets, you can really bet on anything. One specific project is launching on mainnet soon, and I will pay close attention: FORE Protocol.
@Winter:
Another less discussed ongoing branch of this Hated Rally is 3AC redemption arc
OPNX ($OX)
Certainly, none could forget/forgive how leveraged 3AC (Su Zhu & Kyle Davies) were and ultimately became one of the main contributors to chain of disasters 2022. Yet, they did not get cuffed (unlike SBF) but made their way to rebrand a centralized exchange into OPNX, focusing on FTX creditors claims initall. However, Su and Kyle are degens and they know what the market wants, hence pivoted fully to list perpetual for hot tokens like RLB and BITCOIN(not orange). And price action speaks for itself.
Moving forward, perp on Milady is teased by Su and possibly even integration with Elixir protocol, a decentralized market making layer (to be covered in upcoming research post). It is aimed to thicken the liquidity on OPNX and attract more volume.
I would not be surpised to see OX continues climb to higher levels.
Long-term narratives: RWA, AI (retarded imho, but will run), L3/own-chains, LSDfi (esp validators distribution and restaking). Gamblefi/perps as the most profitable hence easier to push.
General Market Outlook
I’m not really a macro guy, but I think that even if a big recession (which would be the most anticipated one in history) will start, BTC would still probably not go below its November 2022 low.
And given that I believe that $BTC will go above $100K in the next bull run, the risk/reward of being too bearish or even shorting at this point is not worth it in my opinion.
Not an expect but I don’t think that macro will have such an impact as we are close to the maximum rate and given that the market is forward thinking we should be good. Most important - ETFs and regulation (but less than before).