ConsenSys CCO talks about MetaMask Airdrop, Ethereum Shanghai Upgrade, Crypto Regulation and more
The Crypto news the team reports directly from Blockchain Economy London Summit which lasts from 27–28 February 2023.
Crypto news had an opportunity to sit down with Lex Sokolinit Chief Cryptoeconomics Officer on ConsenSysto talk about a variety of topics, including current market trends, crypto regulation, and also the long-awaited MetaMask airdrop.
What factors are driving the crypto market right now?
Crypto news asked Lex about the latest trends in the crypto market and what factors are driving them.
Lex emphasized the importance of watching macro trends and the interconnection between different asset classes. Lex noted that crypto is now considered just another risk asset class, with the performance tied to other risky assets – when risky assets do well, crypto does well. Lex explained that over the past year there had been a large explosion in Terra Luna, affecting every asset manager and custodial service exposed to it.
This resulted in Lower trust in custodial services and maybe bigger trust in decentralized solutions and increased regulatory measures.
Lex highlighted that the market drivers now include the probability of entering one recessionwhich affects discretionary expenses and connects to how many NFTs people buy. Lex also mentioned other drivers, such as Ethereum’s ability to stake and unstake with Ethereum Shanghai upgrade, Bitcoin’s ability to have NFTsand fundamental advances in technologywhich reinforces the strength of the technology story.
Eventually Lex came in on regulatory challenges in the crypto market, which is still difficult and it will take some time before it becomes clearer.
The price collapse is a repricing, not a major concern
Lex Sokolin discussed the potential timing of the next crypto bull market in relation to today’s high interest rate environment.
Sokolin suggested that just because the next bull market may be years away doesn’t mean cryptocurrencies and blockchain technology aren’t valuable. Rather, it is merely a reflection of the current economic cycle that values them lower. Sokolin pointed to Amazon and Netflix as examples of companies that survived a period of undervaluation and became more valuable later.
Despite the price drop, Sokolin notes that crypto has been surprisingly resilient and has remained relatively flat since the market crash. He suggests that this represents a repricing of the entire market, with both tokens and tech companies going from 50x revenue to 5x revenue.
To emerge from this period of undervaluation, Sokolin argues that two things must happen: basic secular adoption and a different market regime.
Sokolin believes that fundamental secular adoption will occur over time as more people start using Web3 services and there is increased utility in blockchain applications.
As for another market regime, Sokolin advises against trying to predict when this will happen, as it can lead to frustration.
Overall, Sokolin remains optimistic about the future of crypto and believes that surviving through this current period of undervaluation could lead to significant value in the long term.
Will MetaMask do an Airdrop?
When asked about a potential MetaMask airdrop, Lex Sokolin smiled and replied that ConsenSys has been exploring “all the different ways to decentralize and tokenize our various products and initiatives.”
In particular, Sokolin explained that it is a delicate balance for a company like ConsenSys, which has a significant footprint, to ensure that key infrastructure persists well, as so many people rely on it.
From an analysis and modeling perspective, the team has looked at many different permutations and “it’s in the spirit of the company to continue in that direction”.
Finally, Lex added that given the systemic importance of MetaMask, they need to be careful about what they can do and when.
Lex’s ambiguous response is likely to perpetuate and even intensify ongoing speculation about a potential airdrop, given that he didn’t outright deny the possibility.
