What narratives in DeFi to look for in 2023?

In this episode of [MarketCapping]( hosts [Small Cap Scientist]( and [DCF GOD]( talks about RFV updates, 2023 narratives, taxes, real yield, [NounsDAO]( undervalued DEXs, upcoming launches, [Arbitrum]( DEX wars, prime keys, renBTC and more.


Read our notes below to learn more


**Staked $ETH**

* When buying $stETH, the user gets re-bases which is essentially as the validator earns $ETH, the user’s $stETH position is going to earn yields and if the user takes the $stETH then put it on [Aura]( [Curve]( and then add dpeg yields, they end up really good.
* $cbETH is trading at 0.96 $ETH so it’s 4% off and most people don’t realize unlike $stETH or $frxETH, $cbETH is not rebasing.
* Each $cbETH is actually worth 1.02 $ETH.
* What $cbETH does is they just increase the value of a $cbETH but they don’t increase it on the market.
* If $cbETH has a 4% discount and if you assume it’s going to take 4 months before it repegs, you’re basically getting an implicit 12% APR just in the peg offset then on top of that, you’re going to get validator rewards which is around 10% APR.
* When $ETH got locked up, it was far more expensive than $1.2k.
* There’s not really a lot of people left to sell because almost everyone has already sold.
* The only downside on $cbETH is they take a 20% fee on validator rewards when [Lido]( and others take a 10% fee.


**2023 Narratives and Taxes**

* A lot of people who are international don’t realize some of the implications that come living in the U.S. and being taxed at different rates.
* One of the narratives that has been hit heavily is real yield where a user can earn fees from any type of protocol that prints maybe $ETH or $USDC.
* Small Cap Scientist thinks the last bull run was really fueled by endless APRs and people like chasing yields but when everybody’s taxed at 30%, it works when the market is going up but on the way down, people could have millions of taxes that they owe just because they are compounding endlessly.
* The only time it’s good to give people tokens is when people use the project’s token for fees and then they give those people the token they paid in fees.
* How people should see emissions is seeing it like acquisition costs.
* In traditional startups, CAC or Customer Acquisition Cost should be lower than LTV or Lifetime Value.
* [Temple]( is going to earn yield then buy back the $TEMPLE token until it equals the treasury so there’s no need to stake $TEMPLE instead the number will just go automatically up.
* Temple and $OHM are doing similar things which is making their token like a currency that automatically grows based on yield farming then in the background, build various businesses that deliver extra value to holders.
* There’s bigger profit margins when interest rates are rising heavily.

**Nouns DAO**

* Tested the Prop House where people can come and propose really small ideas then their holders can vote then they win that $ETH and run these little small rounds.
* Nouns goal is to create the best meme, they want to create a brand in a sense and they think if they create this brand then people will want to have nouns and in order to create this brand, they want to do what they call proliferating the meme or doing things that are noun-ish.
* Some of their spends are absolutely bogus like the fashion show they did or they spent a million dollars on a parade.
* It is good for going full decentralized because right now the treasury has a veto where the nouns can veto any proposal and they say that’s for security so no one can steal it but the rage quit would mean you could drop the veto and not have a security issue.


**Undervalued DEXs**

* It blows their mind to see how different the values of the top DEXs are compared to their volumes.
* Aura and [Balancer]( are undervalued when looking at it compared to the competition because they’re doing $100M in volume.
* Balancer pushed and built a framework where they want to direct the emissions to the pools that they actually earn the most.
* Some large whales pushed the vote on [Sushiswap]( where the fees will go directly to the treasury instead of distributing them to users.
* What Butterfly did was if their treasury has x dollars, they’ll give 80% to users and 20% to them and if their treasury has y dollars, they’ll give 30% to them and 70% to users.
* Salaries need to be good but they don’t need to be absurd.
* They want to see more projects openly sharing their numbers like their treasury, salaries, streams or where the funds are going because the lack of transparency needs to go.
* $FTM and [Andre]( came out and pretty much highlighted all of their numbers and how wealthy they are but they wish there are more projects who would go that route and make it public.
* [1Inch]( just announced that they are going to turn on fee sharing.


**Arbitrum DEX Wars**

* [SwapFish]( already has a $55M TVL, they have KYC and fiat onboarding but they just have super high emissions.
* [Camelot]( is doing directional fees and nitro pools.
* Nitro pools allow to almost gate a project like who earns rewards.
* 80% of emissions in Camelot are in $xGRAIL so people are becoming long-term holders because it’s not easy to redeem that for $GRAIL.
* They’re going to be burning more $GRAIL compared to what they’re emitting.
* [Orbital]( said bribes are going to be ready on day one.



* People who own $renBTC need to get out of the pools on Curve and redeem it because the next couple of days, those pools will technically be worth 0.


**Prime Keys**

* Users can take one $PRIME and get one random card and in total, they’ve got 213,000 $PRIME destroyed for the one random card and 290,000 $PRIME for the signature cards.
* It’s the first time they’ve seen someone do a token launch model where the token is non-tradeable but people can use it.


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