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Wei Dai

@weidai0

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Theory crafting: SoV assets require *stability* of their cashflow/REV, rather than the lack of it. =========== If BTC (or Gold) started to generate cashflow, it won't stop being a SoV asset, at least right away. But, if this cashflow ever decrease, the valuation would drop in response. Plus, markets may over-index on cashflow falling: a SoV asset with falling cashflow is less appealing than another SoV whose cashflow is not falling (could be due to it being zero). Compounds that with the fact that SoV relies on network effects, which means that relative marketshare movements could get amplified (a winning SoV can win harder). =========== In upshot, the downside of cashflow/REV for a SOV asset is that it makes the asset less appealing when cashflow falls. Therefore, what's really important for SoV assets is the *stability* of cashflow/REV, rather than the lack of it. (All of this is mostly empty speculation from first principles and not backed by any real data btw. So take it with a grain of salt.)
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We are all building the same thing: infinite, dynamically & horizontally scalable blockspace (d)Apps can choose within the sovereignty vs composability spectrum. Fees are infinite dimensional, enabling infinite number of "composability domains" (apps that compose). - If an app needs no composability, it will have an independent fee market that is free from global congestion. - If a group of apps need composability amongst each other, they will share a fee market. The two popular scaling & interop approaches today can achieve dynamic horizontal scaling: 1. Coordinated sequencers + shared settlement (+ ephemeral rollups) can get us there. 2. True parallelization + local fee markets on a single chain can also potentially get us there. There are of course lots challenges that I swept underneath the rug here, such as the need for horizontally scalable DA, as well as a new smart contract framework that fits the entire trade-off spectrum for apps (existing VMs are not designed for this).
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Why I'm excited about investing in crypto infra 🧵 Crypto and trust-minimizing technologies will transform foundational infrastructures across industries. As an ex-academic and now investor, I strive to find, fund, and partner with 0-to-1 innovators and 10x disruptors. At @1kxnetwork, our thesis is that crypto will disrupt sectors with high costs of trust. We believe that new digital infrastructures will be built to be resilient & trust-minimized, while being interoperable, scalable, and user-empowering. Unfortunately, crypto infrastructure today is simply not yet robust, scalable, interoperable or private enough for billion-user super apps to fully operate on top of. We don't need more infra. We need better infra. We need 0-to-1 innovators and 10x disruptors. If you are working on something that fits that description--whether it's rigorous academic research, novel application of existing tech, or even moonshot ideas that simply compel you--please don't hesitate to reach out. DM's open.
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