[REDACTED] 2024 | Value Accrual Shift in a Chain Abstracted World

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1. 0:01

   it's good to see everyone here I'm Edward from media wallet and um it's been quite a crazy year actually we have seen a lot of changes in narrative and today I'll just like to talk a little bit about value of Cru Shi in a CH attractive World well if you know me well enough you will realize that I'm actually quite passionate about chain chain abstractions and coming actually from a produ dark and Technical background I'm actually supposed to talk

2. 0:34

   more about the technical implementations or like some of the products updates in media wallet but today I decided to sort of talk more about value acral instead and why is that I think in the past couple of years we have actually seen quite a lot of teams that were pretty good in creating applications and made some good updates that eventually shifted towards vertical expansions and decided to work on protocols which is quite fine because provided that a lot

3. 1:06

   of value growth in the past actually happens in protocol levels which is blockchain and just L1 L2 it makes a lot of sense to do this to make these decisions but I would say that I'll argue that in the next one to two years we'll see a shift in who's going to make more money General in the entire blockchain stack and that's what I would love to share today so before I start I would like to give a few credits to actually Robie Peterson

4. 1:38

   from um Deli digital a lot of what I'm going to share today actually have a huge reference from them and if you haven't read it I would strongly recommend you to go through it because it does give me a huge change and impact on how I think about the entire blockchain stake and how I think about things working right now so the way that I'm I'm going to do presentation today is I'm going to share a few predictions on what we're going to see in the coming next few months or years it might not be true but I would be staying here to see

5. 2:11

   them if that if that happens so the first one is I believe we are going to see the diminishing of fat protocol effects what is fat protocol effect it's basically stating that protocol layers is generally the final layer that acures the mo most value and this is particularly interesting because that changes actually coming from something that is a shift of behavior from users in the past we see blockchain first user behavior

6. 2:44

   and in the future we will see application Phase user Behavior what do I mean by blockchain phase Behavior so just we probably know blockchain is a very complicated Technologies and the thing is it is the same with any other Technologies AI is complicated AR is complicated VR is complicated but unlike any other Technologies blockchain is currently being served in a very R way directly to the users what do I mean by that so just imagine if today you are

7. 3:17

   recommending your friends to buy a meme token Black Dragon for example so you're going to tell them hey man go look at these tokens it's going to pump 100x what do you think your friends is going to do so without giving him more context what he's going to do is first look into black dragon tokens and try to find out which blockchain it is on so let's say he found out that it's on near protocol

8. 3:40

   then he is going to do research around near protocol whether or not that is trust trustworthy he found out near Procol seems solid okay then he'll start to research about which wallet he's going to use he found a wallet let's say m wallet he's going to create an account he's going to save his sit phras he's going to do a lot of things and afterwards he's going to look for a Dax that he can trade and actually get black

9. 4:03

   black dragons instead of serving users a simple functions that allows them to just buy tokens we are serving them the entire blockchain ecosystem that's how R we are serving the entire technology stack but I believe that's going to change very very soon in a chain abstracted World users will be served with application first and that applications will have a lot of metalwares that abstract out different things so so instead of telling you the entire blockchain and telling you what

10. 4:34

    to do what you can do within this blockchain the application will just navigate for you and just serve you the best rate now we talk about the fat protocol thesis just now but what actually power the fat protocol thesis underneath is the network effect of the blockchain and this network effect actually comes from us the Builders of blockchain consistently delivering the W Gardens for users what do I mean by W Gardens let's say in the user case scenario just

11. 5:06

    now that um you managed to buy your friends managed to buy black dragons now he has created an account he has get used to the wallet he has get used to the tax and those all are actually sunken cost which means if he now decides to move over to the next token let's say Dodge Coin he would probably have to redo all of them download a new wallets find a new Dex to trade them and

12. 5:29

    do whats those sunken costs and those effort that he has paid off will have to be redone and that is what brings the network effects to the blockchain I know that's not a good thing but essentially that is what makes a lot of users being sticky to the blockchain today and onboarding that is also actually onboarding users directly to the blockchain and which is not the right approach chain abstractions on the other way on the other hand sort of solve this and I I would say there are

13. 6:00

    three layers of chain abstractions that would have to happen for us to really have an Ideal World of blockchain that can be delivered to the mass the first layer will be identity second layer will be State and asset by state I mean your state on Smart contract could be your social States could be your sort of trading history state or whatsoever then gas abstractions and with all these three layers ready I would predict that

14. 6:25

    we will have a future where users get to transact across networks with any assets using just single account moving forward my second prediction is that race to the bottom will basically happen everywhere and that is because what users cannot see or feel will eventually be reduced to Commodities what does that mean so just now we mentioned about different stack of layers in blockchain and if we look closer it essentially looks like this

15. 6:57

    where we have users at the top that we have applications and wallet right now they're basically at the same layer because to sign the transactions you need to have a user interface that you can look at that generates the order and you also need a wallet to sign the transactions and underneath applications and wallets that's a lot more but we can reduce them down to just two layers which is infra and middleware and also protocol protocol layers in a chain abstract the world the only thing that

16. 7:22

    users is going to feel is just applications whatever that's being served to them will be displayed on the applications the rat the speed and and whatsoever and beyond that users don't care about things anymore so going back to the first prediction we say that right now we are serving blockchain directly to users that essentially means we are also shipping the think about Community about The Vibes of of a blockchain about how decentralized is a

17. 7:47

    blockchain just imagine today you go on Twitter you find near protocol you see people talking about how decentralized it is how good it is how shed it is but in a chain abstracted World nobody cares about what community you have on the blockchain they might care about community on a specific token but not the blockchain itself they wouldn't care about how decentralized a blockchain is just like you wouldn't care about the nft you purchased two years ago whether

18. 8:12

    it's on ipfs which is fully decentralized or whether it's on a centralized Google Cloud Storage those things that get reduced into Commodities basically will have only quantifiable attributes and I will reduce that to two things which is the speed the execution speed and also the rate the attributes that we going to sort of um reduce includes the things we mentioned just now The Vibes the community the algorithm today we have seen a lot of algorithms around how liquidity is being displayed they won't

19. 8:50

    really matter so much in a CH abstracted world the next thing so let's say if now raise to the bottom happens resources get reduced and eventually front end just pick the best rate from whichever applications or whichever decks or whichever infrastructures they get where does the value go from based on a few predictions we actually see people believing that the value will go back to the applications or value will go to the wallet the fat wallet thesis I

20. 9:23

    personally believe that most value will go back to the users now that doesn't mean that it is going to happen happen immediately I believe in the short to medium term users will still pay for premiums on two qualities which is convenience and Trust I think these are the two intangibles that is worth investing on and this convenience convenience fees will persist and generate values for early adopters for at least I think 6 months to one years those who can quickly adopt to Chan

21. 9:55

    abstractions and bring users the best experience that is convenient and easy to use users will pay for it in the longer term I believe the race to the bottom competition will also happen in the front end we are start we are starting to see jupyter Team delivering a front end a wallet front end that charges no fee that's easy to use and I would certainly believe that in the future they will improve it a lot that it might

22. 10:19

    looks and feel more like Phantom's wallets or even improve it while they are not charging any fees Phantoms today is charging 0.585 fees Jupiter which sort of has a similar Brands and believe trusted by the users are going to deliver a similar experience with no fees and perhaps better rates so if your users I believe you would choose Jupiter which doesn't charge you any fees and

23. 10:42

    invisible hands of the markers will eventually just Place users towards the most efficient and most simple to use front ends so if any of the applications today is trying to expand towards vertical and becoming protocols I would say that's probably not the best place that you want want to invest in because in a world that everything gets tined up and gets Quantified you don't really generate much value and users

24. 11:07

    relationship is something that you generally want to care about and the next prediction that I have is the slides is a bit screw up here but I'll try to go through it wallets and applications will become one so just now we mentioned about things underneath applications and wallets will get sort of commoditize the next thing is front end becomes the final place that decides the order flow essentially deciding where values we go to and right now if

25. 11:37

    you look at the front end a complete transactions or action on a blockchain essentially has three three items which is securing and storing private Keys generating transactions which is capturing users intention you want to know what orders users want want to make and also signing transactions and also publishing them so the convenience and trustworthiness just now the two intangibles we mentioned will be the most important thing that us want to

26. 12:02

    captures and these two things come from simple thing which is wallets and front ends so in the future world I believe we'll see only two type of applications which is first for undifferentiated cases things things is like more undifferentiated like swapping investment where only numbers matters I think Super apps will come into place and in a more differentiated cases or specializ use cases we see different applications like social and

27. 12:27

    gaming in a short conclusion I believe in the future most of their value will go go back to the users and if they don't go back to the users it is going to stick in the front end for service fee there's no much point to go create different protocols to compete against each other and the best one is to bring applications and onboard users so that's it for me thank you and if you have anything to talk to

28. 12:52

    Media wallet feel free to reach out I'll be glad to ask this thank you