Ignas: Current market lacks genuine innovation, pointing out potential innovative energy in communities, prediction markets, and gaming projects.

Cryptocurrency researcher Ignas believes that there hasn't been real innovation in the market recently, and relying on memes and token airdrops cannot sustain industry growth in the long term. He points out several potential innovative projects and areas, including communities, prediction markets, and gaming projects, hoping to see these projects drive market growth in the future.

This article is compiled and translated. For any discrepancies, please refer to the original text.

This article does not constitute investment advice.

Lack of Innovation Leads to Stagnation in Growth

No More Layer2 Needed!

Ignas expressed frustration at seeing yet another L2 launch, with its token diluting the FDV market value by as much as $5 billion upon release.

Many, including himself, are getting bored with another Uniswap, Aave, or Liquity fork on these new L2s. Users are no longer excited to buy into another infrastructure protocol with false high valuations, as these protocols lack innovation and essentially provide zero value to the tokens.

What the market needs is innovation! But where is it?

2021 Bull Market: Right Time, Right Place, Right People

Ignas really liked the positioning of the 2020-21 bull market. It was a perfect storm: with the COVID-19 pandemic, governments had to print money, external catalysts, and people were speculating on NFTs, farming DeFi yields up to 1000%, engaging in the Metaverse, and playing Axie Infinity or other P2E games out of boredom.

There were several innovations in the crypto space at that time that kept users engaged.

2024 Bull Market Seems to Only Have Memes and Points

However, this bull market so far has been quite boring. There hasn't been real innovation. To turn this bull market into a super cycle, Ignas believes strong internal innovation at a macro level is necessary to attract retail investors and maintain market entertainment and attention.

Due to the lack of innovative investment targets, most market participants are simply holding BTC, ETH, SOL, and working hard to accumulate points or speculate on the next trending meme coin.

But without a special advantage, the opportunity to make money through meme coins is not significant. Most of them are KOLs, market makers, and studios harvesting naive retail investors, while points are on a downward trend because rewards usually depend on deposited funds and trading volume, leading to a game where the rich get richer, becoming a game only for whales.

The BTCFi of Franklin Runes and Runes is indeed an innovation/narrative of this cycle, but even tech-savvy Ethereans and Solana degens are not very interested in it due to its technical complexity and lack of a clear value proposition.

Franklin Runes Report: Runes Issuance to Become the Standard for Bitcoin Ecosystem Homogeneous Tokens

What Innovations Might We See Next?

So, what innovations in this cycle could reignite retail interest?

We really need some new things to revitalize the market to attract a large number of new users, and unlike most meme coins, truly make users money. It's hard to predict what the current cycle's NFT/P2E will be, but Ignas believes it will be the next generation of consumer apps.

Which Protocols Have a Chance to Innovate?

Let's first take a look at some of the currently popular protocols for any clues. On May 7, four new social apps briefly entered the top 15 in gas consumption:

• Fantasy Top
• Friend Tech
• Pump Fun
• YOLO Games

While the user numbers for these protocols are still small, with no protocol having over 20,000 daily active users, from a monetization perspective, these protocols represent new entry points for native crypto business models at the app layer.

Ignas mentioned no interest in Blast L2 as it's just another L2 for users to earn points. However, Fantasy Top allowed Ignas to join Blast. Fantasy Top can predict the engagement of Twitter KOLs through card trading in its community.

More on Blur's revenue-generating L2 network Blast: On-chain native interest rates, NFT perpetual contracts, etc.

The second protocol, Friend Tech, briefly achieved innovation by creating small circles through social protocol design but didn't sustain it for long. Friend Tech is currently at a crossroads in reshaping itself.

Friend.tech token plummeted over 20%: Co-founder hints at possible departure from Base

Pump Fun is a great tool for creating meme coins. Pump Fun has found a great product-market fit in the current market as a platform.

Solana meme coin platform Pump Fun hit by private key theft + flash loan attack

YOLO Games is primarily speculation-based.

Any Protocols with Emerging Innovative Potential?

In addition to the current top 15 protocols, Ignas also highlighted several protocols he believes have the potential to drive market growth through innovation.

First is Polymarket, a prediction betting market. Vitalik has praised Polymarket multiple times for allowing users to focus on specific issues and current events. In fact, Polymarket recently raised $70 million from Vitalik and Peter Thiel. Ignas wouldn't be surprised if they soon launch an airdrop.

During the peak of ETH ETF approval speculation frenzy, Polymarket had about 2,000 daily users. Although the number is still small, there is a great growth potential.

Another protocol with innovative potential is Farcaster, a true zero-to-one startup that combines the best features of social media Twitter with cryptocurrencies. Integrating social interactions, payments, and financial transactions, Farcaster could be a super crypto app in the future.

This is good enough as if Twitter suddenly disappears, all crypto users can immediately switch to Farcaster. On the other hand, in February, when DEGEN tokens were airdropped to early users, Farcaster experienced significant user growth, with daily active users reaching 59,000.

Lens Protocol is also a very promising community protocol with over 19,000 daily users, and while it has fewer users, Lens is actually the only social protocol storing user content and identities on-chain. Lens announced a move from Polygon PoS to zkSync, one of Polygon's significant losses.

Recommended Reading: Lens Protocol Launches Hybrid Network Lens Network, Boosting Efficiency While Maintaining Decentralized Social Interactions
Reason for Recommendation: The article clearly outlines Lens Protocol's recent development roadmap, including Lens Network, adoption of the Volition hybrid architecture, and migration from Rollup to ZK Stack, providing a clearer understanding of the content in this article.

Lens has its own meme coin, but Ignas is very confident Lens will eventually launch the LENS token airdrop; however, he is less certain about Farcaster.

In addition to the above three major protocols, Ignas also pointed out that Telegram integration with Ton and new crypto games could have potential, and of course, let's not forget that GameFi might bring innovation in the future.

A Super App Is Needed Now to Attract New Users

With the current market growth stagnating, it seems there are no more new topics, even the author feels it. It seems that apart from the hype around points, new Layer2 networks, Ethereum spot ETFs, meme coins, etc., there is nothing else to write about! It is very clear that the crypto market indeed lacks innovation, which will hinder market growth or even lead to decline.

This cycle needs more successful consumer-facing new apps

Ignas believes that the real innovation in the next cycle is likely to come from consumer apps, attracting mainstream users outside the crypto community to drive macro-level new applications. He pointed out several potential projects, and it is truly worth exploring and anticipating how the market will ultimately develop as he described.