Venture Capital Partner Adam Cochran's 10,000-word crypto thesis Chapter Two: Key Catalysts

Cinneamhain Ventures partner Adam Cochran has released his 2022 crypto thesis and his top picks in various sectors, categorizing them into seven groups. This article is Chapter 2: Key Catalysts.

Original link: https://twitter.com/adamscochran/status/1476652328736342023

• 1. God Tier: ETH, YFI, CVX, KP3R
• 2. Outperformance/Critical Catalysts: FLX, CRV, ALCX, BAL, ZRX, FXS, RBN
• 3. Outperformance + Top Farms: FTM, AVAX, ZEC, Gearbox, Euler Finance
• 4. Value-Driven/Long-term Outperformance: MKR, HNT, LDO, COMP, RARE, SNX, SYN, GNO
• 5. Medium Risk, Clear Potential: PERP, FST, CAP, MCB, DPX, HND, API3, ANGLE
• 6. High Risk, 50x or Bust: GEL, NFTX, RAMP, THALES, PICKLE, BABL, PREMIA, PENDLE
• 7. Promising: Cowswap, Element Finance, Opyn, Cozy Finance, Pods, Volumex

Reflexer Ungovernance Token FLX

Reflexer Ungovernance Token FLX, also known as the governance token of RAI stablecoin, Cochran summarized his analysis released at the end of last year:

RAI is the purest stablecoin, severely undervalued, with many key catalysts.

Cochran believes that Web3 will adopt its own floating exchange rate currency, and RAI is the perfect candidate, becoming the long-term driving force of Web3 currency. 2022 will be the first breakout year for RAI.

Curve DAO Token CRV

Cochran points out that the liquidity rewards released by Curve stablecoin pools are excessive, but Curve 2.0 will change everything. Curve 2.0 is no longer limited to stablecoins but can attract new projects to inject liquidity, starting with the flaws in the current AMM market:

• Uniswap: V3 mechanism is suitable for professional market makers, but too complex for retail investors.
• Sushiswap: Currently experiencing internal turmoil, Cochran believes Sushi can rise again but needs time.

Due to the flaws of the above two, liquidity in the market is mostly divided among AMM platforms such as CRV, BAL, ZRX, and Curve's incentive mechanism will easily make it the preferred choice for new projects to launch liquidity pools.

This will bring new users and trading volume to Curve, attracting more projects to focus on Convex and Curve. Potential disadvantages may include Curve's slow rollout of multiple V2 liquidity pools or failed community governance votes.

Token appreciation + staking rewards will bring significant performance to Curve.

Alchemix ALCX

Cochran believes that ALCX is one of the few assets in 2022 with high risk and high potential, summarized as follows:

• Self-repaying loans are one of the best DeFi designs, but tokenomics and capital efficiency still need optimization.
• The team continues to research AlchemixV2 to solve many key issues.
• When considering liquidity growth rather than token price, Alchemix's principles will undoubtedly be adopted by other protocols.
• Self-repaying loans create significant opportunities for investors through leverage and risk-taking, but also offer lower returns.
• The new strategy model allows Alchemix to act like a mini Yearn, able to borrow and automatically repay loans.

Alchemix may fail, but it will change the game, especially with the release of V2. 2022 could potentially outperform BTC.

Balancer BAL

According to Cochran's analysis from last year article, Balancer is one of the severely oversold and undervalued classic DeFi protocols with the potential to become one of the most important AMM platforms. The summary is as follows:

• Excellent underlying technology supports powerful applications and high-performance capital efficiency.
• The partnership with Cowswap Gnosis V2 will be a key factor in future treasury management.
• BAL has enormous upside potential, especially as it transitions to the veToken model.

Although Cochran believes that BAL will outperform the market this year, its true strength may take several years to materialize. Balancer will become a top AMM platform through mechanisms such as deep treasury, index products, and LBP token issuance, providing multi-asset capital efficiency that other protocols do not have.

0x ZRX

Similarly, based on last year's analysis, 0x is one of the oversold and undervalued DeFi infrastructure projects. As end-to-end crypto wallets are increasingly adopted, 2022 could be a year for ZRX, summarized as follows:

• Strong external revenue/adoption rate.
• Key foundation for the multi-chain future.
• Building the strongest project for cross-chain DEX.

Users using MetaMask Swaps or other wallets may not realize that these projects are adopting 0x. With future developments such as L1 scaling, L2 availability, possible MetaMask issuance, cross-chain transactions, 2022 will be a driving year for 0x.

ZRX's tokenomics led to overselling due to less than ideal conditions, but Cochran believes that 0x will be ubiquitous in the future, significantly increasing node operators' earnings and driving token staking rates.

Frax Share FXS

Frax may be one of the best aggregation protocols in the stablecoin field, summarized as follows:

• A strong executor of new financial models.
• Very good at establishing diversity and value-added bridges with other protocols, such as integration with Convex and cvxFXS.

Two things in the crypto field cannot be ignored, relentless builders and relentless bridge builders. Cochran believes that Frax satisfies both characteristics.

Ribbon Finance RBN

RBN is like the options version of Yearn, currently struggling due to FDV valuation. However, Cochran points out that its tokenomics, release model, upcoming locking mechanism, and external revenue are enough to offset its overvalued FDV, summarized as follows:

• The best vaults often have complex and difficult-to-replicate strategies.
• Ribbon's value comes from external reward options strategies, not just releasing RBN tokens.
• Unlike Yearn Vaults, Ribbon is expected to generate significant returns in bull, bear, and sideways markets.
• Updating tokenomics and transitioning to the veToken model.

Cochran believes that crisis is an opportunity. Ribbon has been stagnant due to a small amount of funds in tokenomics and vaults, but it could be the only path to expand the options market.

Just as most users cannot execute too complex liquidity mining strategies, hence the need for Yearn, similarly, most people cannot build options strategies, hence the need for Ribbon.

Ribbon needs more options peers and more trading volume to grow, and the upcoming on-chain options protocols will make Ribbon more viable.