Seeking Bull Market Catalysts: Can Consumer-Grade Applications Like SocialFi and GameFi Take Over from Memes?
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Seeking Bull Market Catalysts: Can Consumer-Grade Applications Like SocialFi and GameFi Take Over from Memes?
Don't be lured by excessive bullishness.
Navigating Web3 tides with focused insightsAuthor: IGNAS | DEFI RESEARCH
Translation: TechFlow
I'm tired of seeing another L2 project launch with a $5 billion fully diluted valuation (FDV). Even more boring is yet another fork of Uniswap, Aave, or Liquity on a new L2.
I’m also uninterested in buying into another overvalued infrastructure protocol that adds no value to its token—whether data availability, oracles, blockchain-as-a-service, etc. I crave innovation! Where is it?
Finding Internal Catalysts for the Bull Market
In my last blog post, I mentioned the market’s state of boredom and shared some external catalysts that could drive prices higher. ETH ETFs and shifts in the U.S. government's stance toward crypto can help, but other macro catalysts like rate cuts will come later to fuel the bull run.
I loved the positioning of the 2020–21 bull market. Governments had to print money due to the pandemic (an external catalyst), and people stuck at home started speculating on NFTs, farming DeFi yields of 1000%, exploring the metaverse, and “working” in Axie Infinity or other P2E games. The variety of innovations in crypto kept us engaged.
But so far, this cycle feels somewhat dull.
I believe for this bull market to become a supercycle, we need strong internal innovation—beyond just macro conditions—to attract retail users and keep them interested and involved as they see their paper gains grow.
Without active engagement in the crypto market, even loyal users may simply hold BTC, ETH, and SOL, since the risk/reward of trading in PvP markets isn’t worth it.
Right now, we’re mostly earning points or speculating on Memes. Memes are indeed fun, and there are signs that some new retail users have entered the market. But unless you have an edge, your chances of profiting from memes are slim. Influencers, market makers, and pump-and-dump groups always make money off naive traders.
Points are a fading airdrop trend where the rich get richer because rewards typically depend on 1) deposited capital and 2) trading volume. You can at least earn more airdrops by creating multiple wallets and doing manual trades. But most airdrops are now linear, and LayerZero’s anti-Sybil efforts might be changing the game.
So what innovations in this cycle could reignite retail excitement?
You know, I’m bullish on the restaking narrative because it’s a playground for minting new tokens, boosting yields, and increasing demand for ETH. But restaking isn’t a compelling story for retail. Few will truly understand or care to read about “generic subjectivity work tokens.”
Restaking is a game for whales. Although innovative AVSs (Actively Validated Services) may appeal more to technically savvy retail users.
(Navigating Restaking: Your Guide to Eigenlayer’s Actively Validated Services)
BTCFi with Ordinals and Runes is my second favorite innovation/narrative of this cycle. I explained why in previous articles:
(Navigating the Runes Protocol Launch: Beyond Initial Hype)
But even technically skilled Ethereum and Solana users aren’t too excited, due to technical complexity and unclear value propositions. Despite funny videos of Chinese grandmas trading BRC20s.
We need something that reignites our investment passion—something that draws in large numbers of new retail users and actually delivers real profits (unlike most Memes).
It's hard to predict what NFTs or P2E will look like in this cycle, but I lean toward believing in a new generation of consumer apps. There are already signs this trend is underway.
Top Consumer Applications
On May 7th, four new social apps briefly entered the top 15 protocols by fees generated:
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Fantasy Top
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Friend Tech
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Pumpdotfun
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YOLO Games
“User numbers are still small (none has more than ~20k DAU), but monetization-wise, their success represents a shift in crypto-native business models toward building proprietary distribution.” – Consumer Ecosystem Report from Our Network newsletter.
Honestly, I was very skeptical about Blast L2 (backed by Paradigm) because it’s just another L2 where you farm points—and I didn’t plan to deposit any ETH to farm points.
But Fantasy Top made me join Blast. It turned out I didn’t really care about another L2. I cared about the app on that L2.
Fantasy Top allows speculation on Twitter influencers’ engagement. You can earn Blast Gold + FAN points or trade your hero cards.
It’s a niche protocol combining speculation with Crypto Twitter. But just as Facebook began as a platform for Harvard students and expanded to other Ivy League schools, Fantasy Top could broaden its scope to include famous Twitter or Instagram influencers.
Elon Musk’s card would be popular.
This kind of growth beyond the crypto bubble is what I hope for in this cycle. Which app is most likely to achieve this?
Friend Tech briefly did it—bringing in OnlyFans creators—but they didn’t stay long. Friend Tech is now at a crossroads, reinventing itself via another native L2 points program.
Pumpdotfun is a solid platform. Yes, I don’t like Meme speculation, but Pumpdotfun found a great product-market fit for the current market phase.
YOLO Games also relies heavily on speculation, but one consumer app better integrates speculation with social elements: Polymarket.
Polymarket Prediction Markets
Polymarket is a prediction market that allows trading event-driven binary options, which settle at $1 or $0 upon expiration.
You can exit your position before expiry.
For example, you can bet on who will win the U.S. presidential election, or whether ETH will surpass BTC by 2025.
I like it because it leverages the wisdom of the crowd for real-time sentiment analysis, helping us better understand world events.
Vitalik has praised Polymarket on multiple occasions:
During the speculative frenzy around ETH ETF approval, Polymarket had around 2,000 daily active users. Still too few, but with huge growth potential.
Polymarket just raised $70 million from Vitalik Buterin and Founders Fund (Peter Thiel’s VC firm). I wouldn’t be surprised if they launch an airdrop soon.
There’s one consumer app I’m even more bullish on: Farcaster.
Farcaster – Decentralized Twitter
Farcaster reportedly raised $150 million at a $1 billion valuation!
Compare that to other 2024 raises: Eigenlayer raised $100M, Optimism $89M, Berachain $69M.
Farcaster is a true 0-to-1 innovation of this cycle, merging the best of social media (Twitter) and crypto. It could become a super crypto app, integrating social interactions with payments, trading, and other financial activities.
It’s already good enough that if X were to vanish suddenly, all Crypto Twitter users could migrate to Farcaster within days.
Farcaster saw a major user surge in February when the $DEGEN community token was airdropped to early users. Surprisingly, daily active users continued growing, reaching 59,000.
Lens Protocol is another decentralized social layer, with 19,000 daily active users.
Although Lens has fewer users, it’s actually the only network that stores user content and identity fully on-chain. Farcaster’s posts and interactions are off-chain (while profiles are on-chain).
In a surprising move, Lens announced migrating from Polygon PoS to a ZK Stack superchain on zkSync—a big win for zkSync, a loss for Polygon.
Which consumer apps are you bullish on? I asked this on X and received many interesting replies.
New Models for Making Money
I’m bullish on consumer apps because they innovate in user reward mechanisms and tokenomics, offering a way out of today’s low-circulating-supply, high-FDV problem.
The problem is: there are still too few popular consumer apps!
Also, speculating on Farcaster or Lens growth may seem complicated now, but one thing I know about crypto is that it always finds unique ways to reward early users.
As an early Farcaster user, I got a DEGEN airdrop worth several thousand dollars. In fact, Farcaster has 47 other “scene coins” – social Memes – you’ve probably never heard of.
Lens has its own Memes, but I’m confident Lens will eventually launch a $LENS airdrop. I’m less sure about Farcaster.
Your airdrop will depend on your engagement—posting once or twice won’t get you much. Yet these platforms offer a way out of today’s “rich get richer” points meta, where your rewards depend on how deep your pockets are.
Even on Fantasy Top or Polymarket, rewards are more skill-based: if you’re smart enough, you can earn big.
These consumer apps may adopt different tokenomics and escape the low-circulating-supply, high-FDV trap. Friend Tech gave 100% of its tokens to the community. I hope other consumer apps follow FT’s lead.
A fair and generous Polymarket airdrop could shake the market, potentially attracting more VC funding and shifting attention from infrastructure to consumer apps.
Seriously, this cycle desperately needs more successful consumer apps—for our industry’s sake. I love Picolas’s view that we need something to lift crypto out of its current degeneracy.
Other areas with potential to attract massive new users include Telegram’s integration with Ton and new crypto games.
You can read my bullish take on the Ton ecosystem and dApps.
Another area is GameFi.
On the latest top GameFi games and their innovative tokenomics and incentive models, I collaborated with Skipper, our researcher at Pink Brains.
GameFi: 3 Top Web3 Games Worth Playing Early
Let’s face it. Most past GameFi projects were missing the “play” part.
Moreover, the “earn” aspect usually meant paying users in utility tokens that gained no value due to the lack of engaging gameplay.
This changed in 2024. For the first time, we’re seeing player-centric Web3 games gaining mainstream attention.
Here are three top Web3 games worth investing time in as an early adopter:
Nyan Heroes is like Overwatch, but with cats piloting giant mechs. This Solana-based FPS captivates players with dynamic movement features like wall-climbing.
Nyan Heroes ranked in the top 5 on Epic Games Store wishlists—after only two seasons in pre-release.
This F2P game just launched its $NYAN token on May 21, currently with a $25M market cap, but already listed on Bybit, Gate.io, HTX, MEXC, and Backpack Exchange—a positive signal for future price action if the team keeps delivering.
The studio behind the game, 9 Lives Interactive, raised $3M in early March.
Bullish catalysts for Nyan Heroes:
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One of the top 30 games on Epic Games Store.
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Over 200K downloads within two weeks of pre-release.
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Full version with integrated NFTs launching early 2025.
How early players can get rewarded:
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Wait for the announcement of the next pre-season.
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Play Season 3.
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Earn CATNIP points by improving your MMR ranking.
Metalcore is like Battlefield meets Star Wars, entirely powered by a Web3 open economy with potential earning elements.
Metalcore is one of the few Web3 games whose graphics and overall aesthetics can genuinely compete with mainstream titles, thanks to Unreal Engine 5—even though it’s still in closed beta.
This first/third-person territorial warfare shooter blends PvP and PvE elements.
Bullish catalysts for Metalcore:
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Highest-quality graphics among Web3 games thanks to UE5.
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Won Best Blockchain Game 2024 at Global Blockchain Awards.
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Metalcore has raised $20M total, backed by Delphi Digital, Arrington, and Spartan Group.
How early players can get rewarded:
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Start playing Metalcore when open access begins.
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Focus on high-quality cooperative gameplay, not just scores.
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Players will earn $MCG tokens through strategic play and tactical decisions.
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Shrapnel
Shrapnel is a first-person extraction shooter with earnable elements, built on Unreal Engine 5.
This Avalanche-based FPS is still in early development, but a "play-to-airdrop" campaign with over $100K in prizes sparked significant interest among Web3 creators and is beginning to attract Web2 attention.
Bullish catalysts for Shrapnel:
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$100K prize pool for “play-to-airdrop” events.
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Team includes Emmy-winning members from Halo, Call of Duty, and Westworld.
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Shrapnel has one of the largest creator communities in Web3 gaming.
How early players can get rewarded:
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Purchase a Shrapnel Extraction Pack NFT to play.
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Participate in the next “play-to-airdrop” event (TBD).
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Top 1,000 players on leaderboards share the prize pool.
Don’t Get Swept Up in Overly Bullish Narratives
Consumer applications must attract mainstream users outside the crypto bubble.
But Brave taught us a lesson: a protocol’s success doesn’t necessarily mean its token will perform well.
Despite being one of the most successful consumer apps, its BAT token still trades at 2017 prices.
In the long run, it will be difficult for any dApp mentioned in this blog to outperform BAT.
Therefore, be sure to research when to take profits.
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Ignas | DeFi Research
