1/ We’re in the app phase of the app-infra cycle

Investing @variant, writing at https://backoftheenvelope.substack.com/

3/ My guess is we entered an app phase sometime in the past 6-9 months

Apps are products that interface directly with the end consumer

Eg stablecoins are infrastructure for apps, but aren’t apps themselves. It’s analogous to how users can trade ETH or SOL, but ETH and SOL are assets (not apps)

4/ So, what are the apps?

-Old DeFi. Projects from last cycle innovated throughout the bear market and are back bigger and better. Think: Aave, Kamino, Uni

-New DeFi. Think: Hyperliquid, Morpho, and Jupiter, underpinned by infra improvements that didn’t exist 3 years ago 

-Information markets, specifically prediction markets (@polymarket) 

-Smoother + more engaging interfaces for utilizing / exchanging assets. Think: @moonshot, @azura, @tradewithphoton, @pvp_dot_trade and many others

-Open social. Farcaster and Telegram have both found some success with mini apps and in-app, embedded economies. I think we’ll see this shine in the second half of the app phase 

-All the AI agent stuff

5/ We likely have 6-9 months left in the app phase

Two things I’m looking at:

1) There will be new apps emerge in the second half. What are those?

2) Infra will start to break as apps gain adoption. Where is it breaking? That’s an opportunity

6/ On new apps

My guesses for where we’ll see interesting new apps emerge include:

- Open social. Still relatively underexplored / underutilized relative to the rest of crypto infra. The challenge is in onboarding, but all it takes is one killer app

- Gaming. This has been a hated sector for years. The challenge has always been in building actually fun games. The right path is to lean into everything that’s new and unique to crypto. I think the @Farcade team may have cracked the code.

- The @worldcoin ecosystem. 20M users is nothing to sneeze at 

- Hooks. We know Uni v4 is coming. There will probably be apps

7/ On new infra

Two ways to look at this: infra breaking under stress tests from new adoption OR an app innovating with infra in a way that others will follow

Infra breaking - it happened the past two cycles, it will probably happen again

8/ Infra follows 

The most obvious example will be apps building their own chains, but not simply for owned economics

Hyperliquid built an L1 to optimize chain elements - such as embedding price updates with the block transition logic - to create real product improvements

Unichain is doing something similar

We’ll see more of this

9/ Finally, one trend I think we’ll see is a transformation of dev-based activities into user apps

Activities historically limited to devs are becoming new apps. Launching tokens is one of the first, most evident examples. We’ll see more

2/ Each portion of the app-infra cycle has lasted 1-1.5 years

H2 2022-2023: base level infra improvements (L2s maturing, Solana stability)

2023-2024: mid-level infra implementations (embedded wallets, better security, faster bridges)

H2 2024-now: app emergence