Opinion: We’re in 2023, but it feels like 2019 for the token space. Hold tight

Token winter brought more pain this month as Yuga Labs announced it would be axing staff. It’s the latest token company to slash its headcount, following the likes of ConsenSys and Polygon Labs. Bear markets are real, and with prices and trading volumes down, the pain may not be over. 

“We’ll laugh at how we had doubts about tokens in 2023.”

Positive token news updates 🙌

But there are reasons to be positive. There’s a temptation to say that tokens are dead, but it’s easy to fall into this trap when sentiment is weak. The reverse is true in bull markets; it’s dangerous to assume that token prices will rise forever. And if you believe in the technology, should it matter if prices are down and others have lost hope? If everything we’re building here matters, people will come. It’s important to remember this. 

Solana co-founders Raj Gokal and Anatoly Yakovenko. Solana has made several big announcements in 2023 despite a weak performance in the market (Photo: Alfonso Duran)

And boy are we spoiled for good news in 2023. Bitcoin and Ethereum keep drawing institutional interest amid talk of new ETFs. Layer 2 projects like Polygon and Scroll have been building for a cross-chain world, while Solana has partnered with giants like Shopify and Visa. Web3 social apps like friend.tech are causing a storm. MoMA just acquired its first tokenized art piece. Tokens are going through their “infrastructure” phase as projects like ours plan for mass adoption. All of this is happening today, yet it feels like we’re back in the 2019 bear market. 

“Token fans often speak about four-year “cycles,” but there’s no guarantee that history will repeat itself.” 

Gradual adoption 🐢

There is a flipside to this. Soaring interest rates have rocked global markets. While building will continue, token demand could rest on lower rates. We’re also seeing geopolitical tensions escalate around the world, which isn’t good for markets. Token fans often speak about “cycles,” which tend to play out every four years, but there’s no guarantee that history will repeat itself. 

We don’t know when the next “cycle” will come, but maybe it doesn’t matter. I think it’s more useful to reflect on the gradual adoption of this technology. Look at how much the Internet has changed in the last 30 years, from email and message boards in 1993 to live streaming and social media today. Tokens are just 14​​—I think in another 14 years we’ll be amazed at how far we’ve come. And we’ll laugh at how we had doubts in 2023.

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