Cobie: Analyze the importance of attention in the crypto economy

People often talk about the scarcity of cryptocurrencies. Whether it is to enhance digital scarcity through nft, or think that there are 55 million millionaires, but only 21 million bitcoins.

In fact, the only scarce resource in cryptocurrency is attention.

Capital seeking risk is certainly not scarce. People who joined cryptocurrency in the summer of 2021 are raising billions of dollars to explore the “Metaverse” and decentralized Uber. A billion dollars is no longer a lot of money.

Crypto assets are not really scarce. Of course, this is intellectually dishonest. Bitcoin and Ethereum itself are scarce due to their hard-top supply or deflationary token design; Crypto Punks are scarce because the supply is limited and fixed; yes, there may be only 5,200 Crypto Dickbutts forever. But the number of things you can speculate in cryptocurrency is constantly increasing and theoretically endless. More specifically, billions of risk-seeking capital is not entirely used to purchase cryptocurrency OGs.

The destination of the new U.S. dollar’s entry into the cryptocurrency has been greatly diluted. This is even more pronounced in a bull market—especially during the exciting phase, when the long-term value argument seems to recede from the perception of fund managers who have recently found themselves to be geniuses.

Yes, there are only 10,000 Crypto Punks. But there are 10,000 BAYC, MAYC, the kennel one, a bunch of cool ArtBlocks, CoolCats, Meebits and Hashmasks, yes, you get the idea. Of course, Ethereum launched EIP1559, they are burning billions of dollars in ETH, and over time, its scarcity is increasing. But if people think they are late for ETH, then there are AVAX, SOL, LUNA, ONE, NEAR, and even ADA.

Over time, truly valuable crypto assets have proven to be very scarce. Crypto assets that have outperformed Bitcoin in more than one bull/bear market cycle are limited, and most of them have completely died out. It is not unrealistic to imagine something similar happening again on the mid-term timetable. When ecstasy leaves us, we will wake up naked.Recovered from a manic episode. Reflecting on these decisions we made in this experience of soul out of the body, with a taste of reality and shame. Capital will return to value. And, for investors who are suffering from excitement and hangovers, the “value” pool may be much smaller than previously thought.

But for now, this brand new $1 billion fund, transformed from a former Citibank “innovation manager” to wagmi-punk-2383, has been spoiled in dilute and expanding investment opportunities. They have LP knocking on their door to get more money, and they have 100 founders every day to establish a cross-chain defi Metaverse game scholarship.

The only thing really scarce is attention.


Attention is a currency on the modern web. The Web2 company discovered this a long time ago. Users pay for the service with their attention. The company captured this attention and finally sold something to users at a certain point in time.Usually companies don’t sell things themselves, they just act as brokers between the user’s attention and the companies that sell things.

As the currency in the token economy, the attention is more obvious and direct. There are more than 50 IDOs happening every day, and all of them are competing with each other to get your dollars and add you to their community. In the past 12 months, airdrops have been constantly flowing, providing financial rewards to users who use and support their products.

Traditional companies will pay you $5-10 to use their products. After registering, you can enjoy a $10 discount the first time you ride Uber. In web3, the scramble for attention is so great that 9-figure reward programs have become the new normal, and 5-figure user airdrops are not uncommon. The cost of each video advertisement for encrypted youtube influencers is 5 to 6 digits. Attention is scarce and demand is great.

Attention-based asset valuation

In the last article, I wrote that the bull market crypto market is more akin to video games than investment. If cryptocurrency is a massively multiplayer game scored in dollars, then attention determines many short-term meta-games.

Most people who play multiplayer encrypted games cannot fully evaluate the technical and basic merits of the project themselves. On the contrary, retail investors rely heavily on signals and social proof in their decision-making.

If you oversimplify crypto prices to some kind of equation of supply/sellers and demand/buyers over time, then you can explore the impact of scarcity of attention.

Obviously, if demand increases or sellers decrease, prices will rise. But the underlying factors affecting demand and supply have not changed as rapidly as the rhythm of players playing crypto bull market video games.

More specifically, the value creation of protocol developers and builders occurs on a multi-year timeline, while crypto bull market traders-gamers can only operate in a multi-week timeline at most, and often shorter than this.

Attention is the only factor that affects supply and demand variables. It changes at the same pace as the player because it is commanded and controlled by the player.


During the stimulus phase of a bull market, good participants will not try to buy the “best” asset. Instead, they are trying to buy assets that are about to cross the attention gap or realize their valuation potential.


Good traders know that they really want to buy “winners” to get the maximum return. They want to buy projects that will transform from a “niche” to a “winner”. They are even more willing to buy projects that have the opportunity to switch from “Rekt” to “Retail Trap”, even though they know that this is obviously more risky, because a bad project is less likely to become popular. Projects can also be transferred from Rekt to Niche through product pivots, technological changes or leadership changes. Traders know that any item moving up or to the left in the above chart provides an opportunity.

“Winners” are the best assets for long-term investors and retail investors because they are easy to identify. But for crypto game players who play every day, they are likely to lack relative opportunities, because they may get closer and closer to the market average, and good traders hope to significantly exceed the market average. An obvious example of a “winner” is Ethereum. Of course, the winners also have downside risks, because over time, as the cryptocurrency landscape changes, they can slowly turn to “niche” or even “Rekt”.

Compared with the market average, the “retail trap” may also lack relative opportunities, but it also has a greater risk than the “winner” because the project’s technology or team is poor, and the long-term prospects are worse. They may become good projects, but this is unlikely and may take a long time. At best, they continue to approach market averages. To make matters worse, they switched from the retail trap to Rekt because the market realized they were a bad project and they lost popularity.

As the popularity and popularity of projects increase, they are favored by traders. This “favored” period is the period of greatest change in asset valuations.

Once a project is favored, the number of market participants who own the asset will increase to saturation. Once saturated, it needs (a) the growth of the entire cryptocurrency market to enable the asset to continue to grow, or (b) the fundamentals behind the asset to continue to improve relative to the market. This is why having a “winner” (or “retail trap”) in the stimulus phase is not ideal for most hardcore crypto gamers, because (a) and (b) are too slow for these video game addicts. There are huge opportunities in the crypto market, so the opportunity cost is also huge.

Good crypto game players try to find projects that are far below their potential valuations, and then sell these good projects when they are close to these valuations. They sit among the “winners” when looking for better deals.

Long-term investors don’t care much about games. They are happy to buy “winners” and bet on good projects that grow as the overall market or become more and more important over time.

$SOS, Loot, BAYC

There are many examples of sudden focus on the market.

The recent airdrop of $SOS is worth considering. $SOS is airdropped to Opensea users based on their previous NFT purchase history by a third party. This is interesting because providing a certain amount of free funds to almost every serious crypto “game player” is a good way to quickly increase the attention of all crypto gamers.

Please remember that at this time $SOS has no products and no fundamentals. It is purely a speculative market catalyzed by the crowd’s desire for OpenSea tokens or competitors.

When players turn their attention to $SOS, they have three main choices:

1. Sell their airdrop tokens for Ethereum or U.S. dollars

2. Take their airdropped tokens and see what happens

3. Buy more $SOS from the airdrop seller

When attention turns to this new market, crypto gamers will ask themselves “How can I make money from this new thing?” This is of course the ultimate meaning of video games. If enough people decide to take actions (2) and (3) so that the funds in (3) are greater than the funds in (1), the price of $SOS will rise and the $SOS price chart will look good.

If the chart looks good, more people will talk about $SOS, showing the same decision to more people and a new group of people. Now, market participants who have never used OpenSea or have not fully used OpenSea to obtain a good airdrop must decide:

1. Purchase $SOS and participate.

2. Wait or ignore this market altogether.

Some of them will choose (1), which in turn will cause prices to accelerate further. While prices are rising, people are happy to make money and continue to talk about this fashionable new thing.

However, the ownership attracted people’s attention, and the project quickly moved from Niche/Rekt’s popularity/visibility level to Winners/Retail Trap level.

As prices rise, more people decide that they are happy to sell their airdrops. As the chart stagnates and attention drops, fewer newcomers decide to own $SOS. Since $SOS is not so shiny and new, it is suddenly just a token without a product. Few people talk about it, and the k-factor of assets is reduced. Since the initial level of attention was unsustainable, most of the remaining attention came from existing holders.

Once an asset enters the consciousness of many players, it is easy for all players to rethink the asset, but it is much more difficult to achieve sustained attention without products and users.

I think you can argue that Loot may have followed the blueprint described above to some extent. This may also explain why this year’s best-performing NFT PFP series BAYC can lift the bottom line of Punks, while the competitors launched at similar times are zero. BAYC focuses on building communities by creating value for the community-and participating communities become permanent promoters, creating continuous or increasing attention.


Doge is another interesting focus in 2021.

Throughout history, Doge’s blood-sucking of Bitcoin is quite common. However, from inception to the end of 2020, these pumps have remained almost in the same range. You can see the picture below. From 2014 to the end of 2020, its price chart basically fluctuated horizontally for 7 years.


When people learn about Dogecoin, they have two options

1) Buy doge

2) Ignore doge

It is conceivable that the proportion of decision-making has remained basically unchanged in the past 7 years. Suppose that for every 100 people, 90 of them ignore it and 10 of them buy doge.

Then, a new attention catalyst was introduced in 2021. Elon became the cheerleader of Dogecoin and changed two things:

1) More encrypted locals are persuaded to buy doge

2) Brand new market participants were persuaded to buy cryptocurrency for the first time, starting with doge

Therefore, when Elon started sending out messages of favor for Doge, this was actually a very interesting moment in the market. You can say to yourself: If Elon continues to attract people’s attention, what is the largest audience it can reach?How will the above buy/ignore ratio be affected?

Thinking about it this way makes it very easy to bet on Doge in a certain capacity. If he continues to work hard, the increased attention will greatly change the relationship between supply and demand within a period of time, which is beneficial to Doge holders-maybe you can estimate that there is 5 times or 10 times the upside. If he doesn’t do this, you may be able to reduce losses by -33% of your investment. Risk/reward imbalance.

However, in the end, it feels like almost everyone in the world who might decide to buy doge already knows. This is a damn clip on SNL. At this point, attention is flat at best, because people who know doge are already saturated, and those who are persuaded to buy it have already bought it. Attention is now focused on confused observers and people who have already purchased the maximum amount they are willing to buy. The rate of change in attention has fallen, resulting in much fewer new participants willing to buy, and it has become the only remaining coin holder to focus on.

As ownership and valuation attracted attention, smart traders began to sell.


Cardano is another interesting example. Although the core argument behind the asset is the same, its performance throughout 2021 is very different from Avalanche, Solana and Luna.

With the beginning of the bull market, Cardano has attracted widespread attention. It has become the favorite token of Crypto YouTube, and all well-known names and faces rank it as one of the top 3 assets. Of course, the founder himself is also an encrypted YouTuber, and Charles’ videos often reach 50,000 viewers.

However, since the beginning of 2021, Cardano has fallen by 93% when trading against SOL.


Maybe this can be explained by the way we describe SOS or BAYC.

When projects receive a lot of attention beyond ownership, they usually reprice. By the end of 2020 and the beginning of 2021, Cardano is the leader in the attention of retail “eth killers”. In addition, the bull market has just begun, so many new participants have joined the market and have received further attention.

But throughout the year, other L1 companies, such as Avalanche and Solana, have created a vibrant and engaged ecosystem—similar to BAYC’s approach. They continue to gain greater thought sharing and attention from users, developers, and speculators. New projects and money-making opportunities are rapidly launching on these L1s.

These communities have become eternal promoters, and because crypto gamers do not like to be idle, these DeFi/games/any projects have become a positive feedback loop of continuous attention. Due to the scarcity of attention, all these L1s are competing with each other and sharing ideas at the same time. Solana and Avalanche have won the attention of users, and it is also a loss for other L1s.

Very popular, but since users can’t do much there currently, and there isn’t an ecosystem of crypto gamers who live in Cardano every day to earn points in crypto games, it feels like even though it turns more into ” “Retail trap” rather than “winner.”


Attention is the only scarce resource in cryptocurrency.

When evaluating encrypted assets or playing massively multiplayer encrypted trading video games, the rate of change of attention and the saturation of ownership are useful indicators for observation or estimation.

The best stimulus traders are looking for relatively less popular assets, and if they can bridge the gap from obscurity to popularity, their valuations have a lot of room for growth. When ownership attracts people’s attention, they sell them.

Maintaining a “winner” through the thrilling phase is only suitable for people who are mentally stable, functioning normally, and have a balanced life. Maybe one day I will become one of them.

Don’t listen to most encrypted youtubers. They are turning your attention into the products of their advertising business.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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