Cryptocurrency relies on hype, hype, hype.
The right bet on a new trend can earn you 100x, but if the choice is wrong, you risk losing everything.
Let’s take a look at the top 5 failing trends + lessons we can learn.
Crypto trends fail for a variety of reasons. Some believe this is due to a fundamental misunderstanding of blockchain and its business value. Such trends are to be avoided at all costs.
But experimentation is part of the crypto world. Some projects fail because they come in too early (we’ll see this in the examples below). It was the wrong time, but it was a real attempt to build something, and not the desire of the creators to scam users.
Some of these concepts don’t work, but it sets the stage for future applications and trends to flourish. Let’s see it:
Utility or food tokens
This comes from the 2017 ICO era. High inflation worthless tokens that were supposed to be used for specific applications.
99% full scam and their price is the following chart:
You don’t pay your dentist with Dentacoin
Habr, but with a token is not the best idea
Despite the fact that there was a lot of fraud, it is important to note that the ICO as a fundraising mechanism had some good qualities. But every app doesn’t need a token, and if it can be replaced by a stablecoin or just fiat, then it probably should.
Well-known companies such as JP Morgan, R3 and IBM have launched centralized blockchains. Trying to create pocket structures, as if against the backdrop of “dirty” and incomprehensible to traditional financial structures of bitcoin.
“Pocket blockchain” is a misunderstanding of cryptocurrency.
The main ideal of the crypt is decentralization, no intermediation, and networks open to all.
Although these projects are improved cycle by cycle, they never work.
DeFi 2.0 was supposed to fix the shortcomings of the DeFi summer (liquidity stabilization mechanisms and lack of long-term incentives for users).
It was assumed that a system of balances built around staking and a rebalancing mechanism would be able to provide sustainable growth.
But the impact of DeFi 2.0 is still being felt today. Some of the projects took into account the problems and still found some balance.
DeFi 2.0 also brought innovations that have become the industry standard:
ve-tokenomics where users lock their tokens in the protocol
Protocol Owned Liquidity – purchase by the protocol of liquidity
This sets the stage for the next DeFi innovation.
Token managed registries
It was assumed that token-driven registries would improve the quality of information – reduce censorship, bias and distortion of information due to economic incentives.
Token-driven registries are decentralized lists that provide financial incentives for token holders to shape the contents of the lists in a balanced way.
Large projects like Messari, Adchain, etc. had token registries.
The registries did not become successful due to the general apathy among token holders that still plagues token-voting crypto projects. But it did draw attention to the complexity of voting and how it should work for systems to work. This has led, for example, to the ability to delegate your votes to modern DAOs.
Securities tokenization for standardization and compliance with tokens appears to be a promising concept.
There was a lot of excitement when such projects appeared, led by Polymath and Tzero.
However, the market was not ready for security tokens in 2018, but apparently now the time has come.
RWA(Real Assets World) is the tokenization of real world assets for ease of exchange. RWA looks like security tokens, but from a different angle.
The market capitalization of Real World Assets (RWA) is $1.4 billion at the time of writing.
Experimentation in crypto projects should be encouraged. DeFi 2.0, security tokens, and registries set the stage for future innovations.
Just because something doesn’t work now doesn’t mean it won’t work in the future. The public may not be ready for, but a new look, time and users will come.
But there are also trends that are dead initially. Anything that tries to bring centralized control to crypto will never succeed.
PS I do not have a Telegram channel with news, memes and other things, but there is [телеграмм канал](https://t.me/ton_learn) where I post open source lessons on the TON blockchain, as well as complex data analytics on the crypt (for example, searching for money laundering deals in Python), I will be glad for your subscription.