39 – That Is So Not KOL

Give Me Utility, Don’t Give Me $LIBRA

Well, not to blow our own vuvuzela, but our pivot to utility came at the perfect time.

The mood of the week has been blowback to key opinion leaders (KOLs) who have spent much of the bull cycle trumpeting the speculative meme projects they were investing into their large follower bases to sell for a profit. All textbook insider trading schemas, openly admitted to by the LA Vape Cabal and other current “darlings” of the Solana shitcoin casino. 

Chief among these KOLs: Argentinian President Javier Milei. The world leader is facing a federal probe for his role in promoting and allegedly launching $LIBRA. No, not that $LIBRA — Facebook’s defunt token from last cycle, IYKYK. (What’s Zuckerberg batting these days? .201?) Also an abject failure, this $LIBRA was developed with the help of the now-infamous Hayden Davis, who rugged most of Twitter with coin. Its market cap went from $2.6B to $0.8B in less than an hour of the token’s launch, and now sits at a dismal $300M.

All of this degenerate news that we said was finally being purged from our weekly writing is the very evidence the wider space may be pivoting toward utility too. 

So what does real utility look like? We’ve spent plenty of time discussing Helium, the clearest protocol-as-a-service value proposition around. (Even Big Telecom is bought in.) And we’ve also touched on how memecoins have been leveraged by brands like Iggy Azalea and Pudgy Penguins to monetize fan communities in new ways.

But to understand the full potential of crypto utility, let’s first take a step back and talk about the state of the technology, its parts, and the implications. Web3 technology largely consists of decentralized communications protocols with varying degrees of auditable logs for transactions related to using the protocol. 

Bitcoin, the most famous of these protocol, is a digital money transfer service. It leverages complex math, distributed processing and storage, and defined hard limits on scarcity, in order to ensure the integrity of the system without having a bank running the books in the middle.

That idea inspired Ethereum to build the World Computer, a blockchain protocol focused on bringing the transparent audibility of the financial ledger to other systems reliant on account-keeping — think video games, social and streaming platforms, or business software. Much of Ethereum’s ecosystem has focused on the financialization of different assets on the Layer-2 (read: middle-men) blockchains, in order to meet the cost-related challenges of scaling the network.

Then, there is Solana, which has iterated on the original concept of a world computer to build what it calls a real-time state machine: a database that can read and write transactions at the speed at which users are generating them. This blockchain protocol is 100-1000x faster than Ethereum, with a demonstrated track record of getting faster and more distributed over time.

With artificial general intelligence (AGI) potentially on the horizon, unique and verified datasets are the moats necessary to build the AI companies of the future. Solana not only scales to onboard consumers, but to license their data to the future of AI agents.

There are a lot of smoke and mirrors in the web3 spaces. Rather than doomscrolling X for the next cool (KOL?) thing, we’d recommend the unsexy and TradFi-coded process of due diligence. Do your research into each new project and prioritize those with an understanding of data and its importance to shaping intelligence systems in their domain. This will continue to be the differentiating force between projects that succeed here long-term, and those that go the way of the $LIBRA(s).

To that end, the dePIN projects building on Solana understand that securing the data on a Layer-1 — and doing so cheaply — is an incredibly important piece to scaling their unit economics in the future. And that’s why this publication continues to shout that transactions per second (TPS) is king when it comes to evaluating the protocols themselves.

—El Prof