RYAN🗽 @ProfessorDefi1 - Twitter Profile

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9 months ago

CATALYSTS VS NARRATIVES As a good researcher, you should be able to answer these three questions when it comes to web3/crypto projects • What is being built? • why now?(catalysts) • why will the market care?(narratives) Catalysts and narratives occupies two out of three so it’s best to get familiar with both as they tend to work hand-in-hand. This write up will carefully explain what they are and gives a careful guide on how to apply them in researching. Note: Crypto markets are unpredictable and no framework guarantees outcomes, only better decision-making. What are crypto Narratives? These are dominant themes or stories that people currently believe in during a specific period of the market cycle thus attracting both capital and innovations around it. What are crypto catalysts?? These are events that events or developments that triggers hype, Demand , price movements of a particular token , sector or even the entire market. Catalysts are usually time-based and short- to mid-term. They don’t guarantee success, but they often determine when a project moves. Aside from traditional research focus like team, product and whitepaper , these two metrics are crucial in determining the next big thing as projects perform best when both of them align. A catalyst without narrative leads to short term hype and a narrative without catalyst leads to a slow and eventually ignored process. Step by step guide on how to research using narratives and catalysts. 1. Identify Active market narratives. You can do this by scanning CT, research reports and funding news. I usually ask myself • what sector keeps getting repeated mentions, new launches, VC interests, Ecosystem grants etc • is the narrative early, mid or late? • Is there an increase in projects building on it? This step prevents me from researching irrelevant projects. 2. Shortlist relevant projects. A good narratives can have dozens of projects building on it, you have a narrow down to a few. What I do is I focus on projects: • Building core infrastructures and not just forks with no new features • with real users and adoption. • mention by major players, researchers and builders. Ps my TL is different from yours so get yours well curated. 3. Understand the project Fundamentally . This part helps improve conviction. I often ask myself: • what problems does it solve? • who are the users? Retail or institutional grade? • was building on blockchain technology even relevant? • How is this going to profit me? What’s the revenue accrual dynamics? • if there are tokens or future tokens , how is value tied to it? Is it an equity token or just another governance and incentive token? 4. Map out Upcoming catalyst and Evaluate strength. I usually classify them under the ‘strong and weak’ categories -Strong • Mainnet launches • Large ecosystem integrations • Revenue Activation -weak • minor UI updates • soon major announcements. Then there’s influencers influence and that should be determined by how you rate the Influencer. I then ask myself will this attract new users or capital? Is this unique or a ‘do as I do’? 5. Check for narrative Alignment. Why should the market care? I usually check if: • Catalyst reinforces the narrative • similar projects moving at the same time? 6. Validate with Onchain and Social data. Delving in to traditional research a bit, always confirm if thesis is playing out in real life. Use analytics tools to verify onchain stats like TVL, volume, Active users. And also look out for organic discussions on socials, builders and team members conversations….etc 7. Build a clear research thesis. You should be able to answer • why this narrative ? • why this project ? • Why this catalyst? • what invalidates this thesis For example Project X is building a privacy protocol, with ecosystem integration acting as a catalyst. If active users fail to grow , thesis is invalid. Other narrative–catalyst research methods? Share below 👇🏾

ProfessorDefi1's tweet photo. CATALYSTS VS NARRATIVES

As a good researcher, you should be able to answer these three questions when it comes to web3/crypto projects
• What is being built?
• why now?(catalysts)
• why will the market care?(narratives)

Catalysts and narratives occupies two out of three so it’s best to get familiar with both as they tend to work hand-in-hand.
This write up will carefully explain what they are and gives a careful guide on how to apply them in researching.
Note: Crypto markets are unpredictable and no framework guarantees outcomes, only better decision-making.

What are crypto Narratives?
These are dominant themes or stories that people currently believe in during a specific period of the market cycle thus attracting both capital and innovations around it.

What are crypto catalysts??
These are events that events or developments that triggers hype, Demand , price movements of a particular token , sector or even the entire market.
Catalysts are usually time-based and short- to mid-term. They don’t guarantee success, but they often determine when a project moves.

Aside from traditional research focus like team, product and whitepaper , these two metrics are crucial in determining the next big thing as projects perform best when both of them align.
A catalyst without narrative leads to short term hype and a narrative without catalyst leads to a slow and eventually ignored process.

Step by step guide on how to research using narratives and catalysts.

1. Identify Active market narratives. You can do this by scanning CT, research reports and funding news.
I usually ask myself
• what sector keeps getting repeated mentions, new launches, VC interests, Ecosystem grants etc
• is the narrative early, mid or late?
• Is there an increase in projects building on it?
This step prevents me from researching irrelevant projects.

2. Shortlist relevant projects.
A good narratives can have dozens of projects building on it, you have a narrow down to a few.
What I do is I focus on projects:
• Building core infrastructures and not just forks with no new features
• with real users and adoption.
• mention by major players, researchers and builders. Ps my TL is different from yours so get yours well curated.

3. Understand the project Fundamentally .
This part helps improve conviction. I often ask myself:
• what problems does it solve?
• who are the users? Retail or institutional grade?
• was building on blockchain technology even relevant?
• How is this going to profit me? What’s the revenue accrual dynamics?
• if there are tokens or future tokens , how is value tied to it? Is it an equity token or just another governance and incentive token?

4. Map out Upcoming catalyst and Evaluate strength.
I usually classify them under the ‘strong and weak’ categories
-Strong
• Mainnet launches
• Large ecosystem integrations
• Revenue Activation
-weak
• minor UI updates
• soon major announcements.
Then there’s influencers influence and that should be determined by how you rate the Influencer.
I then ask myself will this attract new users or capital? Is this unique or a ‘do as I do’?

5. Check for narrative Alignment.
Why should the market care?
I usually check if:
• Catalyst reinforces the narrative
• similar projects moving at the same time?

6. Validate with Onchain and Social data.
Delving in to traditional research a bit, always confirm if thesis is playing out in real life.
Use analytics tools to verify onchain stats like TVL, volume, Active users. And also look out for organic discussions on socials, builders and team members conversations….etc

7. Build a clear research thesis.
You should be able to answer
• why this narrative ?
• why this project ?
• Why this catalyst?
• what invalidates this thesis
For example Project X is building a privacy protocol, with ecosystem integration acting as a catalyst. If active users fail to grow , thesis is invalid.

Other narrative–catalyst research methods? Share below 👇🏾

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RYAN🗽

@ProfessorDefi1

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