There was an interesting discussion in the LeoFinance Discord server earlier today about projects and funding through the DHF. Some projects are getting huge payouts from the DHF on a daily basis while other projects on Hive are self-funded and/or have sustainable revenue models.
A huge debate in the crypto space more broadly takes us to discussions around real yield (DeFi protocols) and overall sustainability in this industry. In 2020 & 2021, we saw a major influx of VC money flood this space.
That caused the likes of FTX and other crypto startups to jump to massive valuations. We saw ridiculous money flowing in. Dumb money chasing dumb money.
The problem with money like this is that it tends to prop up what would otherwise be losers.
Shakeouts are needed. This is why markets have cycles. The cyclical nature of markets allows losers to lose and winners to win.
In every cycle - crypto or otherwise - we see who the losers are. They disappear into the void of nothingness while the winners stay humble, grind away and try to attain more of their TAM (Total Addressable Market).
The Real Yield Narrative and Sustainable Crypto Startups
Our discussion around DHF funding for Hive projects reminds me of the Real Yield Narrative. This started at the outset of this most recent bear market where DeFi protocols seemed to get hit the hardest first.
We saw 99% of DeFi projects completely fail. The founders either rugged or the community headed straight for the exits.
What remains are the leaner DeFi protocols with hardcore communities. The protocols that have been able to generate revenue on their own as opposed to unsustainable tokenomics have also outperformed.
What I'm interested in seeing is which DeFi protocols are able to slowly churn out more and more Total Value Locked (TVL). These protocols could become massive winners in the next bull run.
MakerDAO is super interesting on this front for me. CUB is obviously chasing a similar path to utilizing real yield to drive TVL growth and hit the next bull cycle with feet on the ground.
Here we see the top 15 DeFi protocol s who are earning real revenues. Majority of them are DEXes. Pancakeswap is obviously a huge winner here. Charging fees on every single swap on PCS on BNB Smart Chain... which is quite a lot.
$122k+ per day in 24hr fee revenue generated. Wild!
Despite that, their token has been going down in price. There can be a lot of other reasons for this, but that is outside the scope of this article.
What we're focused on here is survival, revenue and sustainability.
How to Survive
In order to survive as a startup of any kind - but especially as a crypto startup - you need to be lean and also discover revenue models.
Yes, you can get funded by the DHF or other DAOs... but what happens if that funding suddenly dries up?
Do you have any actual business? Or do you get caught with your pants at your ankles.
Bear markets tend to show everyones' true faces. In my opinion, there are a lot of crypto projects being propped up by external funding.
If that funding were to go away, I have a feeling the founders would also go away quite quickly.
Being a founder is hard. Being a crypto founder is torture. You live on a daily basis wondering how you will survive the night.
The great thing about this industry is how fast it moves. It also makes it super hard and challenging to navigate. I love this industry and every day I show up here, I look for more ways to achieve sustainability, lengthy runways and lean operations.
The winners in the next bull cycle will be the projects that were able to lean up in the bear market, generate external revenue and build better technology than the previous cycle.
What projects do you see that are doing these things?
About LeoFinance
LeoFinance is a blockchain-based Web3 community that builds innovative applications on the Hive, BSC, ETH and Polygon blockchains. Our flagship application: LeoFinance.io allows users and creators to engage & share micro and long-form content on the blockchain while earning cryptocurrency rewards.
Our mission is to democratize financial knowledge and access with Web3.
Twitter: https://twitter.com/FinanceLeo
Discord: https://discord.gg/E4jePHe
Whitepaper: https://whitepaper.leofinance.io
Our Hive Applications
Join Web3: https://leofinance.io/
Microblog on Hive: https://leofinance.io/threads
Delegate HIVE POWER: Earn 16% APR, Paid Daily. Currently @ 2.8M HP
Hivestats: https://hivestats.io
LeoDex: https://leodex.io
LeoFi: https://leofi.io
BSC HBD (bHBD): https://wleo.io/hbd-bsc/
BSC HIVE (bHIVE): https://wleo.io/hive-bsc/
Earn 50%+ APR on HIVE/HBD: https://cubdefi.com/farms
Web3 & DeFi
Web3 is about more than social media. It encompasses a personal revolution in financial awareness and data ownership. We've merged the two with our Social Apps and our DeFi Apps:
CubFinance (BSC): https://cubdefi.com
PolyCUB (Polygon): https://polycub.com
Multi-Token Bridge (Bridge HIVE, HBD, LEO): https://wleo.io