Analysts at crypto hedge fund Pantera Capital point to two altcoin projects that are optimistic about the bull market.
In their latest Blockchain Letter, Pantera analysts Cosmo Jiang and Eric Rowe said they are looking for crypto projects that are gaining fundamental traction.
“token” [with] An underlying protocol that aligns with your product market, is guided by a strong management team, and has a path to sustainable unit economics will perform best in the next cycle. ”
Analysts first mentioned Stax (STX), a project aimed at helping Bitcoin (BTC) scale and bring smart contract capabilities to the top cryptocurrency by market capitalization.
Analysts say,
“Stacks’ mission to bring innovation to Bitcoin is exciting and timely. Interestingly, at this time, Stacks is also the only live, generalized smart contract layer 2 on Bitcoin. This is in contrast to the Ethereum ecosystem, where there are dozens of competing layer 2s vying for share.
Over time, there may be multiple viable Bitcoin Layer 2s, but given its first-mover market position, Stax will remain competitive for quite some time even as new competition emerges. We believe they have, and we expect them to emerge. ”
Next, Pantera says that the Ethereum (ETH)-based decentralized exchange dYdX (DYDX) is one to watch given its strong returns and economics.
“One of the main reasons we think dYdX is interesting is that its unit economics have changed positively over the past year. The business model is simple. They charge fees that are approximately 2.5 basis points of trading volume. dYdX earns about 1 basis point on volume, with a healthy margin of 40%.
The second reason is that capital allocation adjustments were made at the end of last year. dYdX began returning capital in the form of staking rewards (similar to stock dividends) to token holders in conjunction with the v4 upgrade in December. The profits of the dYdX protocol are now distributed directly to token holders, making the generation of token value tangible. ”
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