#17 Religion as a framework for blockchains
And what it takes to be the next BTC/ETH/SOL
Blockchains nowadays are nearing the “good enough” stage.
Transaction costs are getting below $0.01, as seen with Solana, Avax, Sei, Sui, and L2’s hopefully after EIP-4844. Chain throughput is likely sufficient as many boast 10-50K+ TPS, but this only matters if you’re hitting TPS limits which is likely 3-5 years down the road. There is also a clear path to better UX with Account Abstraction and wallets such as Rabby, Zerion, and Backpack.
There is now very little differentiation for new L1 and L2’s. After achieving these basic threshold requirements, it all becomes a competition for attention and a community of “followers”. And the best example of a strong community of followers is religion.
So, what does it take to become the next religion? What does it take to become the next BTC/ETH/SOL?
1. Every religion needs a figurehead (or a cult leader).
obody knows. ETH has boy genius Vitalik where his blog posts are treated as gospel. SOL has Anatoly arguing with ETH maxis on Twitter everyday.
The best example here is probably the most infamous LUNA, with the controversial cult leader — Do Kwon (rip) — dunking on every single naysayer. Cardano is another great example of a cult leader who livestreams a few times a week from warm sunny Colorado.
Leaders of blockchains become larger than life. They’ve passed down this ideology and prophetic text in the form of a whitepaper. And when these leaders die, the ideology becomes even stronger. Satoshi “died”, yet the BTC ideology is stronger than ever. And if Vitalik died, ETH would still live on and thrive as the decentralized world computer.
The problem I find with chains like Kujira is that there isn’t one central figure to put on your altar. This is also why ETH L2’s struggle, they leverage on the ETH myth but are followers of an existing religion. Hence, I think ETH L2’s will still need a strong GTM push from a CEX such as Base x Coinbase, as their communities will not be as strong as the L1’s.
2. Every religion needs a near-death moment and a resurrection
Jesus was crucified and came back from the dead. BTC had its moment with the Mt Gox hack, yet it came back. ETH had The DAO Hack where 14% of ETH were locked up in the contract, yet it came back stronger. SOL was so intertwined with FTX and when FTX fell, SOL went from $35 to $9 and people were writing them off as the next LUNA. Yet, here we are.
Emerging from a near-death encounter sifts out all but the most devoted supporters. These form the base of your most hardcore followers.
LUNA fell but it never came back (yet there are still “Luna Classic” fanatics). FTM also fell but it lacks a mythical figure, which seems more like Andre Cronje rather than Michael Kong. Other chains (un?)fortunately have not received a near-death blow yet as many are still too new. L2’s included.
3. Make your early believers rich. Like 100x rich.
Number go up is the best BD. And the people you make rich become your biggest supporters. BTC gave its early adopters a taste of a +200x between 2013 and 2018, which formed its core following. ETH on the other hand did a +40x between 2020-22 and enriched its ICO supporters, a diverse group of people who believed in it among the hundreds of other ICO projects.
SOL on the other hand, did a ~100x last cycle, but much of it were held by VCs instead of the community, hence the grassroots impact aren’t as strong as ETH. Unexpected airdrops, like what we saw with JTO and PYTH enriched the SOL community. People who staked 1 SOL received $10K of JTO. They made the small guys who can only afford 1 SOL rich, instead of distributing it based on # SOL staked, which benefits the rich. Note that most airdrops (or points for that matter 🙄) do not enrich a community, only unexpected airdrops do.
The L2’s ARB and OP also did pretty successful airdrops during the bear market. This is obviously a positive feedback loop where a price increase invites more ardent supporters and drives attention, which then causes prices to increase again.
From here on, I’m looking at how TIA leverages momentum from their airdrop and subsequent 10x price action. Early Celestia developers are now sitting on a ~$200K airdrop. On the other hand, we have SEI which screwed up their airdrop and lost their Day 0 community, but are building it back slowly now. Aptos and Sui are also both VC chains and so will need a great airdrop strategy to win over an organic community.
4. Build your cult community with memes and a unique identifier
Even with monetary incentives, you need memes that spread quickly and easily. You need inside jokes so people feel like they belong to an exclusive club. You need people supporting the “greater cause” blindly because they feel like they belong.
Nothing exemplifies this better than “laser eyes” BTC maxis. For ETH, there are “.eth” X names. With SOL, the “◎” and “.sol” X names has died down quite a bit, but now you have BONK, dogwifhat, Popcat, etc. leading the charge for Solana culture. You also have 0xmert basically living on X to dunk on every ETH maxi. AVAX has the “🔺” X names, while OP and ARB use 🔴and 💙 💛 instead.
Memes have to grow organically from a community. You can’t force a meme to a community. You can’t just slap an “Inu” at the end of the coin and call it a day. “Solana inu” didn’t take off, but $BONK and $WIF did. The Base community did surprisingly well with $BALD. It was original and kinda funny, but unfortunately ended up as a rug.
You need to kickstart the flywheel ideally with a charismatic leader with a strong narrative to build out the base of your following. Then, it becomes a positive feedback loop: Early community → Memes & culture → Price goes up → More community → More memes → Price goes up → More community.
The closest thing to a “cult community” I’ve seen outside of the majors is Berachain. These guys just understand crypto humour and community. SEI has been doing fairly well with the multiple “Sei”-puns such as the $SEIYAN community which has even launched an ecosystem fund. Sui and Aptos lacks in this regard but I believe these will follow as number goes up.
5. Simple narrative or one-liner as a rallying cry
To spread your religion you need a simple one-liner to sell it. BTC was “digital gold”. ETH was “the world computer”. SOL was “parallelized processing” or “ETH Killer”. Recently, a couple of strong narratives have popped up — the “modular blockchain” one with Celestia leading the charge, and “parallelized EVM” with SEI and Monad.
It’s just much easier to tell people you have a “parallelized EVM” (still EVM but chain go fast) rather than telling them EIP-4844 will lower calldata costs for ETH Rollups due to the introduction of blobs committed through KZG.
Alas, the success of a blockchain boils down to a strong community. A community of developers, speculators, and users. And the strongest communities are religious cults.
(nb. you can replace “cult” with “interest group with a charismatic leader” if you that makes you more comfortable)
Given there are 240+ L1/L2’s and only a handful of original apps, blockchains are in strong competition to attract attention. Tech is not a differentiator anymore. There’s a reason why Blast didn’t talk much about their tech stack (no one cares) and focussed on its community and yield.
I’m writing this because everyone loves speculating on L1/L2’s as there’s a market premium (also the easiest narrative to understand as you’re “investing in blockchain tech”). But in reality I’d much prefer to talk about the real world use cases (coming soon).
So which L1/L2’s will become the biggest religions of the next cycle?
Special thanks to ExcelMaxi for sparking the discussion. Also, to Kenneth, Asher, Lakshman, Raphael, Michael for the feedback. Feedback does not equal endorsement.