Leigh Drogen, of Starkiller Capital, is a smart prognosticator, willing to call it as he sees it and cut against the grain, which is why the his recent letter, “Blockspace: Crypto’s Heaviest Bag, ” is so dense and compelling.
We are big long term believers in DeFi, tokenization of real world assets, gaming, DePin, enabling AI agents to transact on-chain, amongst other use cases we can think of, what we are most excited about are all the use cases we can’t yet think of. When you give entrepreneurs cheap abundant blockspace on public permissionless blockchains that have the ability to reach everyone on earth, it is inevitable that they will build some incredible and incredibly valuable things used by hundreds of millions if not billions of people.
https://www.starkiller.capital/post/blockspace-crypto-s-heaviest-bag
I pull-quoted the most optimistic part of the post, but the other compelling ideas here are:
- Bitcoin has consolidated its permission as a store of value with some begrudging world acceptance but it has largely ceded the protocol fight to other L1’s. It’s not clear if any Bitcoin L2 will become large.
- Ethereum might end up as a major platform for the era of fat app Starkiller Capital sees as coming, but the transaction space is so cheap, it’s a big question mark on how it will translate to Ethereum as an investment.
- We are in the midst of a phase one meltdown (and well on our way to the “Web2 era for crypto”), as VC’s extract the easy capital in inflated L1’s of ghost town protocols. Hello, Cardano!
- While people haven’t been paying attention, blockspace is now efficient and readily available. The apps that are coming to take advantage of are likely 6-9 months out (in the authors’ view).
- “The stark divide between the success of ETH as an asset and the success of the Ethereum ecosystem as a technology is nothing short of epic. The chasm is so wide that many longtime developers and holders of ecosystem assets have very publicly questioned whether transacting in the ecosystem is now too cheap!”
- Stablecoins are here and working well, likely to become way more prominent and cut banking inefficiencies…eventually.
- And uh, the guys at Starkiller don’t like Gensler very much!
The content from Starkiller is always original and worth reading, I strongly recommend subscribing to the Starkiller Capital Insights newsletter (just scroll to the bottom of the linked post here).
Eric Frankl.in 