The current narrative is that the markets are a Game of Macro. In the Unchained Episode: “Cobie and Chris Burniske on How to Navigate a Crypto Bear Market” [1] the narrative is that Layer 1 of this cycle will get rekt like Eth and may show recovery in the next cycle with builder building and drawing in people. This resonates with me. Thus the Spiel is to buy AVAX, Solana, Near, Arweave, Filecoin, Moonbeam, (etc) at max pain - essentially looking at Layer 1 of the last bull run.

The investment Strategy for this is to buy a bundle of Layer 1 chains when max pain hit acting as an Index for the overall ecosystem system. Note the fat protocol thesis is key here as we make an assumption that value accrues at the protocol level Fat Protocol Thesis to be true essentially.

Demand-Side: Every ecosystem tends to have its own grant program and start-up/ developer support system. Effective spending dollars from these programs can attract:

Demand Side: (effective) Dollars > Talent > builds application > (if it has utility) attracts users> which increases the demand layer 1 token to interact with the chain - Note: there is a chance of a flywheel effect as often multiple application needs to exist to build new ones. Also more user = more funding = more attractive to talent

• Size of the Grant program
• Number of Application
• Developer Activity
• Network Activity
• Social metrics (attention economy)

Supply-Side: will be determined by market structure:

• 1. Whales & Unlocks
• 2. Tokeneconomic model and new issuance

Evidence for this thesis:

If we plot Ethereum Fee (red) against the price of Solana (yellow), we see an initial discovery phase showing the utility of cheaper fees in November 2022, which tapered off with Ethereum Gas prices falling again before supporting the rally of Solana Starting in around July 2021.

Source: Santiment.net

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