🥷 3 killer apps

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Like all good things, it turns out that killer apps come in threes.

Polymarket, Hyperliquid, pump.fun. These are the voyages of modern-day crypto enterprise.

And before you tell me that stablecoins are crypto’s fourth killer app, thereby ruining this airtight metaphor: No. 

Stablecoins are a tool. Wallets are apps (but only barely). I will die on this hill.

💵 Culture cash

For the sake of being pedantic, let’s separate Circle, with its wildly successful IPO, into a separate category: “fintech on the blockchain.”

There’s suddenly no question that Polymarket, Hyperliquid and pump.fun are the sole victors of this cycle. 

Hyperliquid won perps, pump.fun won memecoins (although Bonk.fun made it close), and Polymarket won the concept of betting on random stuff. Polymarket had its breakthrough moment during the US election, so it tracks that Donald Trump Jr’s 1789 Capital recent investment has cemented its status. 

CNBC reports the deal ranged in the double-digit millions, with Don Jr. also joining the firm’s advisory board.

A longstanding criticism of the crypto space is that it’s too insular. That it’s all decentralized infrastructure for degenerate gambling apps, in one form or another. Crypto’s endless servicing of speculation largely overshadows the utility of peer-to-peer payments and freely accessible tokenized dollars.

Now, I don’t agree with that summation, but it exists, persistently so. And the fact that the current breakthrough apps express different degrees of degeneracy won’t do much to change that perception — Hyperliquid with its leverage of up to 40x; pump.fun with its gamified memecoin launches; Polymarket with its pop-culture wagering.

I have a theory that crypto is, for the most part, years ahead of the mainstream. Crypto knew that blockchain-powered prediction markets were interesting seven years ago, when Augur launched on Ethereum in 2018, causing moral panic over the potential for assassination markets and so on.

Do we need to bet on celebrity romance? No. Is it fun? Yes.

Bookies have obviously been taking bets on obscure stuff like the next James Bond or celebrity deaths long before crypto. But Augur, Polymarket and all the others have added immediacy to the mix — letting the public open the markets rather than the bookies themselves. 

Anyone paying attention to sports betting would know that gambling on anything and everything would be the next evolution. And perhaps Bored Apes re-primed the normie-sphere for its next big arbitrary collectible in Labubus, some three decades after Tomagotchis and Beanie Babies ran wild.

With this in mind, 1789 Capital’s bet is clearly a solid one, even if Polymarket is what Russ Hanneman would call “pre-revenue,” in that it doesn’t collect any fees (yet), apparently subsisting only on venture capital money like the cash just raised from Don Jr, now amounting to hundreds of millions of dollars.

And for all of its pesky problems with market resolutions, it’s certainly fitting that a crypto-native outfit in Polymarket could be a primary venue for mainstream degeneracy moving forward. 

It all begs the question: Is there more money to be made by looking outward from crypto rather than inward, like Hyperliquid and pump.fun? 

Hyperliquid has averaged more than $55 million onchain monthly revenue over the past six months and pump.fun nearly $33 million, per Blockworks Research data. 

That’s far below a mainstream app like Roblox (currently about $360 million per month), but about in line with Discord (around $50 million per month in 2023). Polymarket has otherwise seen over $1 billion in monthly trading volume for three months running, and is on track for a fourth in August. A hypothetical 5% fee would give it $50 million in monthly revenue right away, although perhaps a withdrawal fee might be easier to stomach.

In any case, it’s easy to make the argument that crypto and blockchain are worthwhile regardless of whether they only ever amount to reconstructing the traditional financial system to be more transparent and trustless, outside of the penchant for gambling. 

But Polymarket is getting close to crossing the culture chasm in a way that Bitcoin, Ethereum and Solana never have. Those may be household names, but they’re still “crypto.” 

Polymarket might just be “Polymarket.”

— David Canellis

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