| | | Market innovation works in serendipitous and tediously gradual ways, what Matt Ridley calls the "human version of natural selection." | This crypto cycle hasn't seen radically transformative zero to one innovations like DeFi did in 2020, but the pace of innovation hasn't slowed. | Today's edition spotlights some of crypto's greatest app innovations over the past year. | | | 2024's biggest airdrops: | | The value of an airdrop is determinant on a dozen factors but here are a few key ones: legitimacy, current market sentiment, proportion of token allocation the project allocated on its first airdrop. | The two biggest aidrops, HYPE and STRK, capitalized on the tailwinds of bullish market sentiments. HYPE distributed 33% of its token on TGE, while Starknet distributed a smaller 7.2% on launch. | — Donovan Choy (X: @donovanchoy | Farcaster: @donovan) | | 2024's greatest innovations | Pendle | Pendle exists because crypto wants to speculate. | In Pendle's short history, the team has constantly reiterated its yield trading product using narratives from stablecoins and infamous "DeFi 2.0" (Olympus DAO) in the 2021 bull, to liquid staking tokens, real-world assets on Arbitrum, and liquid restaking during the prolonged bear. | It wasn't until the points meta blew up in early 2024 that Pendle struck gold, with its TVL shooting up from the multi-million to multi-billion dollar range. Pendle's Principle Tokens (PT) and Yield Token (YT) yield mechanisms remain an indispensable tool for anyone looking to perform any form of leveraged points or fixed yield farms. | Fluid | Fluid is a picture-perfect example of what innovation looks like. Fluid took many of DeFi's successful primitives, such as Uniswap v3's concentrated liquidity and Aave's utilization rate curves, then redesigned traditional AMM liquidity provisioning from the ground up. | With its "smart debt" and "smart collateral" mechanisms, Fluid enables deep multi-million dollar DEX liquidity pools that are, technically speaking, $0 in TVL. This capital efficiency was an ingenious combination of users' debt from lending protocols and AMM liquidity pools. | Ethena | Stablecoins are some of the hardest sectors to compete in. That makes USDe's $6 billion market cap achievement very impressive — all within the span of a year. | Previous stablecoins built along the spectrum of centralization (USDT) vs. scalability (DAI). Ethena instead put together a series of impressive business development deals with CEXs and designed USDe, a scalable stablecoin that exploited the arbitrage in CEX-DEX perps funding rates and delivered yield to users. | GEODNET | For GPS technology to work well at centimeter-level accuracy, traditional companies deploy thousands of real-time kinematic (RTK) networks, like base stations and mobile rovers, globally. | Using crypto token incentives, GEODNET sought to scale the deployment of RTK networks. Based on November data, GEODNET has already deployed at least 10,000 stations across 140 countries, surpassing the 5,000 stations put together from traditional providers Trimble and Hexagon. | Notably, GEODNET has found a significant cost advantage. Deploying a base station with GEODNET is about $700, or 97% cheaper than legacy costs of $25,000. If that's not innovation, I don't know what is. | For more, see Blockworks Research's free report on GEODNET. | Virtuals | Virtuals is the premier "picks and shovel" play of the recent AI agent frenzy. | It's an AI agent factory that lets anyone spawn a tokenized AI agent. Similar to pump.fun, the agent's native token is bonded to a DEX liquidity pool (Uniswap v2) once the criteria of a $420k market cap is met. | Built on Base, Virtuals has spawned at least 12,000 AI agents since its inception, including the wildly popular anime bot Luna, which runs 24/7 and can be tipped with the agent's respective token. | Virtual's innovation comes from a combination of many different pieces including LLM models, crypto wallets, innovative value accretive tokenomics, NFTs and IPFS for data storage. | For more, see this comprehensive post from Chainofthought. | — Donovan Choy |
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