Multicoin Capital Part 2: The Everlasting Narrative in the Crypto World
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Multicoin Capital Part 2: The Everlasting Narrative in the Crypto World
Rather than chasing cutting-edge narratives, it's better to seize opportunities with certainty.
Navigating Web3 tides with focused insightsAuthor: Multicoin Capital
Translation: Azuma, Odaily Planet Daily
Two days ago, Multicoin Capital published an article titled "Multicoin Capital: Frontier Narratives in 2025," outlining the most uncertain yet imaginative frontier narratives for 2025.
Today, Multicoin Capital releases another piece—but this time focusing on the highest-certainty “eternal narratives.”
Below is the full translated text of Multicoin Capital’s article, translated by Odaily Planet Daily.
Jeff Bezos, founder of Amazon, has a famous quote:
"What will change in the next ten years? That's a very interesting question—and one often asked. But I'm almost never asked the reverse: What won't change in the next ten years? And I think that second question is actually more important, because knowing what doesn’t change allows you to build your business strategy around those certainties. In our retail business, we know customers want lower prices—we knew that ten years ago and I know it’ll still be true ten years from now. They want faster delivery; they want broader selection... Clearly, no customer ten years from now is going to come up and say, 'Hey Jeff, I love Amazon, but could you make the prices a little higher and the delivery a little slower?' That would never happen. So we need to double down on these things—get them right. We know the effort we invest today will still deliver positive returns to our customers a decade later. When you know something is valuable long-term, you can afford to commit massive resources toward it."
Earlier this week, we released a typical VC-style article highlighting the new opportunities our investment team at Multicoin Capital expects to see in 2025. Inspired by Bezos’ logic, we believe it’s equally critical to emphasize the trends we often take for granted—but that are nonetheless continuing to evolve. These represent stable, durable opportunities upon which we can continue building and investing.
Eternal Narrative One: Relentless Pursuit of Capital Efficiency
Presenter: Kyle Samani (Co-Founder, Multicoin Capital)
DeFi started with extremely low capital efficiency. Uniswap’s xy=k curve became infamous for its capital inefficiency.
Over the past five years, DeFi has dramatically improved capital efficiency across multiple dimensions: CLOBs, looping/multiply products, concentrated liquidity, USDe-based derivatives exchanges, lending using derivatives collateral, using LP positions as collateral for derivatives, and more. The market has consistently and relentlessly pursued greater capital efficiency.
This is the magic of DeFi. Permissionless innovation has enabled all of these efficiency gains.
We believe Drift, Solana’s leading derivatives exchange in which Multicoin has invested, represents a key direction in DeFi’s journey toward capital efficiency—a version of the logical end state. Spencer and David discussed this during their talk at the 2024 Multicoin Summit.
Eternal Narrative Two: Irresistible New Financial Games
Presenter: Tushar Jain
Humans always want to gamble—but the games keep evolving.
Meme tokens are the newest form of gambling. With far greater volatility than traditional casinos or sports betting, meme tokens offer a more thrilling experience. Compared to other forms of gambling, meme tokens provide higher potential returns, and the intensity of risk and excitement generated by their extreme instability surpasses both casino games and sports betting. The possibility of massive payouts is also significantly greater than existing formats, making them highly attractive to those with higher risk tolerance. This combination of explosive upside and inherent unpredictability creates an experience unmatched by traditional gambling.
Meme tokens also possess a unique social dimension. Abstracting internet culture into a meme token adds a social layer absent in other gambling forms. They are deeply tied to online communities and digital culture, fostering consensus among participants. This social element transforms trading meme tokens into a collective activity, allowing individuals to connect through shared interests and experiences. It cultivates a sense of belonging and shared identity—an emotional component missing from conventional gambling.
Meme tokens represent the convergence of gambling, internet culture, and social interaction. They deliver a high-stakes, high-reward experience that caters to humanity’s innate desire for excitement, while leveraging the social dynamics and collective energy of online communities. As internet culture continues to evolve, meme tokens will likely remain a significant part of the gambling landscape, offering a uniquely compelling experience for those willing to take risks.
The human impulse to gamble is eternal—but the games we play keep changing. Meme tokens are the next evolution, but certainly not the final one.
Eternal Narrative Three: Financial Market Transparency
Presenter: Spencer Applebaum
In traditional finance (TradFi), brokers like Robinhood and E*Trade can offer zero-commission trading to retail investors because firms such as Citadel Securities, Susquehanna International, Wolverine Trading, and other high-frequency traders (HFTs) bid for order flow—a model known as Payment for Order Flow (PFOF).
These firms compete to execute large volumes of retail orders at or near the mid-price. There’s extensive literature arguing why PFOF benefits the world rather than being inherently evil—despite its typically negative connotation.
The challenge with PFOF models used by Robinhood and similar platforms is opacity. Bidding is limited to market makers partnered with the broker. Additionally, multiple layers of intermediaries—clearinghouses, exchanges, brokers—each extract hidden fees, usually embedded within the bid-ask spread.
A research paper on PFOF opacity noted: “Robinhood’s agreements with wholesalers increase PFOF at the expense of wider slippage—the exact conflict of interest SEC Chair Gensler has warned about... If consumers could easily distinguish differences in execution quality between brokers, this wouldn’t be an issue. But such distinctions cannot be inferred from current disclosure practices.”
The beauty of DeFi lies in collapsing settlement, exchange, custody, and execution into a single transparent API. This gives DeFi a natural advantage, as markets inherently value transparency.
DFlow, a Multicoin portfolio company, is pioneering a concept called “conditional liquidity,” where liquidity is only matched if the counterparty is verified by the frontend app as non-adversarial—or if the matcher algorithmically achieves better pricing from market makers. Market makers can provide liquidity on on-chain CLOBs like Phoenix or on-chain AMMs like Orca, offering retail orders better slippage while avoiding exploitation by predatory actors.
The entire stack is open and transparent. Using conditional liquidity, PFOF-like mechanisms can be built natively on-chain—elegantly combining the best of TradFi and DeFi: the ability to segment order flow and offer better quotes to retail users, while preserving DeFi’s openness, transparency, and auditability.
Eternal Narrative Four: Value Capture Models Will Continuously Split and Recombine
Presenter: Shayon Sengupta
Last year, I wrote about the “Attention Theory of Value,” describing how crypto adoption in consumer apps fundamentally hinges on permissionless asset issuance and trading across any interface or environment.
In 2024, asset issuance was concentrated in a few places—with pump.fun standing out. These platforms dominated issuance, but crucially, trading happened elsewhere: via Telegram bots, aggregators like DexScreener and Birdeye, inside Phantom wallets. Issuance and trading were decoupled—occurring across fragmented venues. As long as crypto capital markets exist, asset issuance and trading have always been separate. Bitcoin was first issued on a cryptography mailing list (metzdowd.com), but now trades on Nasdaq via ETFs. Tokens launched during ICOBench in 2017 are traded on centralized exchanges (CEXs).
So while pump.fun won issuance last year, Telegram bots and retail-focused aggregators captured trading—the new source of order flow. Long-term, I believe owning an exchange or controlling order flow is the more profitable business.
This is just the beginning of the issuance/trading platform race. Asset issuance and trading will be split and recombined a thousand times across a thousand venues, because attention on the internet isn’t confined to a single app—it exists across forums, livestreams, chat tools, and every interface we interact with.
More importantly, I hope more apps realize that controlling attention means having the opportunity to capture order flow—a highly lucrative business. Expect to see wallets and trading features embedded directly into more consumer applications by 2025.
Eternal Narrative Five: Capital Seeks Yield
Presenter: Eli Qian
Everyone wants ways to earn yield—preferably simple and straightforward ones.
Until recently, most yield sources were accessible only to sophisticated market participants. For example, depositing money in a U.S. bank savings account earns ~0.01% APY—while the bank lends that same money out at 10%! Only by investing in money market funds do retail savers access reasonable yields. Yet demand for yield persists. Products like ETFs (abstracting stock picking) and robo-advisors (managing entire portfolios) have made previously inaccessible yield streams available to non-expert investors.
Crypto is similar. Earning yield through staking or lending used to require technical expertise. Now, user-friendly products are emerging to eliminate this knowledge arbitrage that disadvantages retail users. Today, with just a few clicks, anyone can log into a wallet or app and earn staking or lending yield without deep technical knowledge. Fuse Wallet and StakeKit already enable this. In the future, wallets and DeFi apps will automatically allocate and rebalance assets across validators, lending protocols, and liquidity pools, delivering optimal yield 24/7.
Eternal Narrative Six: Innovation Driving Down Banking Costs
Presenter: Vishal Kankani
The Medici family pioneered modern banking in the 14th century. At the time, banking was slow, physical, expensive, and required immense trust. Over time, the cost of accessing financial services has plummeted. With blockchain, we now see a clear path to 24/7, global, zero-cost banking.
No matter how advanced financial instruments become, the demand for core banking services remains constant. Banking-as-a-Service (BaaS) emerged because innovating at the application layer is difficult when constrained by legacy TradFi infrastructure. Naturally, this led to modularization—separating frontends from backends. Today, the backend is known as BaaS.
BaaS providers license their infrastructure to fintech companies, enabling them to launch digital banks, corporate cards, and lending products with minimal time and cost. By offering these services via APIs, BaaS allows tech companies to focus on user experience and product, while BaaS handles the “boring but critical” backend operations—compliance, risk management, and fund flows.
Pre-blockchain BaaS stacks included bank infrastructure, KYC/AML compliance, payment processing, card issuing, and data aggregation. The system works, but it’s complex and inefficient—still rooted in 1970s-era banking rails (SWIFT/ACH), costly, non-24/7, capital-inefficient, and not truly global.
Blockchain will disrupt modern BaaS because it represents radical innovation. By using blockchain-based assets and protocols, we can build a new BaaS model that is simpler, cheaper, faster, more global, and more transparent.
The post-blockchain BaaS stack will include self-custodial wallets like Squads, enhanced on-chain KYC/compliance protocols like zkMe, stablecoin payment infrastructure like Bridge, and DeFi protocols for lending (Kamino) and trading (Drift).
The evolution of BaaS toward blockchain-based models is inevitable. As infrastructure matures, we’ll see blockchain protocols replace every component of today’s BaaS stack, creating a leaner, more efficient, and more transparent model for financial services.
Squads, a Multicoin portfolio company, provides a Banking-as-a-Service protocol on Solana, enabling businesses, individuals, and developers to create secure accounts that store value and support programmable transactions. Squads is the first formally verified protocol on Solana and has already processed over $1 billion in stablecoin volume. Assets secured using the Squads protocol are growing exponentially. We expect Squads to lead BaaS innovation in 2025.
Eternal Narrative Seven: Reducing Friction Increases Usage
When you make something simpler by lowering costs and friction, people naturally use it more. Email transformed communication; the iPhone made photo-taking and life-logging effortless; Amazon simplified online shopping; social media made content sharing seamless.
Clearly, making transactions and remittances easier will have the same effect. Stablecoins may be one of the most transformative financial innovations of our era. The ability to send remittances 24/7 with near-instant settlement will have profound implications. It enables the dollar to penetrate new markets and reach ordinary people in ways Treasury auctions cannot. It makes commerce more efficient—no downtime for nights, weekends, or holidays. It reduces working capital needs and drastically cuts the cost and time of cross-border payments. Stablecoin supply is at an all-time high, transaction volume is surging, and as regulation clarifies, adoption will grow further.
Stablecoins will further catalyze the concept of open finance. When transactions become easier, more transactions happen. Stablecoin holders will seek yield on these assets and gravitate toward platforms like Kamino and Drift, which autonomously match lenders and borrowers while minimizing friction. Once on-chain, stablecoin holders can earn yield with just a few clicks—from money market funds like BlackRock’s BUIDL to decentralized exchanges like Drift, Jupiter, Raydium, and Uniswap. As on-chain assets grow, there’s no doubt stablecoin holders will have access to an ever-expanding universe of assets to own and engage with. Stablecoins are the Trojan horse of the on-chain economy—they will help build a more inclusive, open, and global financial system.
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