The Cryptonews team is reporting live from the Blockchain Economy London Summit that is running from 27-28 February 2023. Cryptonews had an opportunity to sit down with Lex Sokolin, the Chief Cryptoeconomics Officer at ConsenSys, to discuss current market trends, crypto regulation, and the much-anticipated MetaMask airdrop.
When asked about the recent trends in the crypto market and what factors are driving them, Lex emphasized the importance of looking at macro trends and the interconnection between various asset classes. He noted that crypto is now considered just another risk asset class, with its performance tied to that of other risky assets – when risk assets do well, crypto does well. Lex mentioned that the big blowup in Terra Luna, which hit every asset manager and custodial service that had exposure to it, resulted in lower trust in custodial services and greater trust in decentralized solutions and increased regulatory action. Additionally, Lex highlighted that the market drivers now include the risk of a recession, which impacts discretionary spending and relates to how much money people have to invest in crypto. He also mentioned other drivers, such as Ethereum’s ability to stake and unstake with the Ethereum Shanghai upgrade, Bitcoin’s ability to have NFTs, and fundamental progress in the technology, which reinforces the confidence in the underlying technology. Finally, Lex touched on the regulatory challenges in the crypto market, which continue to be difficult and will take some time to become more clear.
When discussing the potential timing of the next crypto bull market in relation to the current high-interest rate environment, Lex suggested that just because the next bull market may be years away, it doesn’t mean that cryptocurrencies and blockchain technology are not valuable. Rather, it is just a reflection of the current economic cycle valuing them lower. He pointed to Amazon and Netflix as examples of companies that survived through a period of undervaluation and became more valuable later. Despite the collapse in prices, Lex noted that crypto has been surprisingly resilient and has remained relatively flat after a short period of volatility. He suggests that this represents a repricing of the entire market, with both tokens and tech companies going from 50x revenue to 5x revenue valuations. To snap out of this period of undervaluation, Lex argued that there needs to be fundamental secular adoption and a different market regime.
When asked about a potential MetaMask airdrop, Lex smirked and answered that ConsenSys has been exploring ‘all the different ways of decentralizing and tokenizing our various products and initiatives’. He explained that it is a delicate balance for a company like ConsenSys, which has a significant footprint, to ensure its key infrastructure persists well, as so many people rely on it. From an analysis and modeling perspective, the team has looked at lots of different permutations, and ‘it’s in the spirit of the company to continue in that direction’. Lex added that given the systemic importance of MetaMask, they have to be careful about what they can do and when. His ambiguous response is likely to sustain and even intensify ongoing speculation about a potential airdrop, given that he did not outright deny the possibility.