A blockchain history of ideas that didn’t work — until they did
Joyride is betting on 0DTE options on Solana, even though options on-chain have never quite flown before
Joyride will launch soon on Solana (but not the U.S.). It’s a bet from veterans of the ICO-era of blockchains that perps will not be the only way for retail to place a directional bet about a coin’s future price — one of these days. Joyride’s founders think they can finally crack selling options on-chain and that a certain category of traders will like the way that options make it easy to watch your downside.
This is an idea that we’ve seen before. Some of the projects that have come out are still live, but options have never gotten that big on-chain. Coinbase’s Deribit platform rules the roost for options so far, but it’s centralized.
But the fact that a concept didn’t work the first time is no guarantee it won’t work eventually — particularly in crypto.
Joyride is going to start with BTC, ETH and SOL options that expire today — always today (0DTE, in the lingo). A user who wants to let it ride can always roll it over, but by limiting it to one period (a tenor, in the lingo), that concentrates the liquidity.
“With an option, you only lose the amount of collateral that you spent. The cost of the option is all that you lose,” Josh Fraser, part of the founding team, told Front Stage Exit. “You don’t have that risk of a cascading liquidation.”
The team, most of which built the yield-hunting Origin Protocol together, is building on Solana in part because it has the speed but also it has that culture of retail traders. Options can be nice for retail too because if they have some of the underlying they can always post it and earn fees.
We’ve seen several companies come along that attempted to make options hot. I remember when Hegic was kicking around DeFi Summer, with its snarky pseudonymous founder tweeting through the pain (they have since published an open source book about the process, by the way).
Hegic now has less than $9 million in total value locked right now, according to DefiLlama — a pittance in crypto terms. Worse, it’s been generally falling since 2021.
Opyn, which came out in 2022, has fallen from hundreds of millions to around $2 million (but at least its creators got acquihired by Coinbase). Then there’s Stryke (formerly Dopex) — which has less than $200,000.
While Fraser acknowledges that options on-chain have been tried any number of times, Joyride thinks this time might be different. And it might be.
It’s not unusual for a concept in crypto to languish a long time before jettisoning into the global conversation.
Security tokens
In 2018, Polymath raised almost $60 million in a token sale to accredited investors. The plan: to tokenize securities.
Polymath was looking to get a piece of an international exchange, while Overstock was making noises about launching its own security token site.
People looked forward to a future where everything would trade on-chain, but those companies did not persist or thrive. Still, security tokens are the hot new thing. Only we call them real-world assets now.
This time looks much more promising, but we need to wait for Project Crypto, the joint SEC/CFTC project, to really lay down the ground rules before this category is likely to truly come into its own. What really needs to be worked out is who can trade security tokens and whether they can share a venue with other kinds of digital assets.
Prediction markets
Prediction market pioneer Augur was a great example of what happens when a company tries to build a product around evading laws rather than serving users.
Created by the Forecast Foundation, Augur hit Ethereum’s mainnet in 2018. It rapidly rose to becoming, briefly, one of the most popular apps on the site, but I still remember the reporters covering it at CoinDesk in those days grumbling about how incomprehensible the whole thing was to use.
The trouble was that it was designed to be decentralized from the start. Like really decentralized. Like really, really decentralized, because everyone knew it would almost certainly be inherently illegal — not to mention being used for illegal things. And it was!
Other prediction markets came and went. Startups often claimed that they had all the kinks worked out, but big moments would come and go without any of them proving all that convincing.
Then Polymarket and Kalshi decided to start being defiant. The former agreed to “vacate” the U.S. and eschew American users and the latter did the unthinkable: suing its regulator. Both strategies paid off in their own ways, and prediction markets have become a fixture of the American conversation.
However, they are dominated by sports and starting to become rife with insider trading. The future of prediction markets is getting a little cloudy.
Still. A decade on from Augur’s ICO, we now know there was always some there there.
NFTs
I wrote a lot about NFTs long before the general public had ever heard of them. I wrote about them so much, in fact, that at one point my editor at CoinDesk said to me: “Look, no one cares about NFTs. We gotta cover other stuff.”
But less than a year later, the NFT boom got so big that it completely overshadowed the first major public listing of a crypto company, when Coinbase offered COIN for the first time in 2021.
CryptoPunks invented the concept of non-fungible tokens before it was standardized with ERC-721. With ERC-721, the first “craze” hit with CryptoKitties’ launch, which overwhelmed the Ethereum blockchain at the end of 2017. Next, the CryptoKitties gang pioneered the L1-for-every-company-ever era.1
But the shine came off CryptoKitties quickly, and the category lost its cool for several years. The creators of OpenSea toiled in obscurity before becoming the perennial next-IPO favorite among elite crypto companies.
Why NFTs popped when they did remains a mystery to me. Even as a longtime student of the category, I was as surprised.
NFTs did not persist, but they also have never quite died. Pudgy Penguins has plushies in chain stores. CryptoPunks still fetch thousands. Moonbirds has a grand new plan.
Maybe NFTs come back? Maybe they don’t? Either way, before they were something for one year, they were nothing for a long time.
What was never born may yet live
All of this is just to say that it’s no reason to dismiss a crypto company just because we have seen a version of it before.
This technology is revolutionary, yes. It’s also buggy, janky and frustrating. And its users are flighty
“Most people in crypto think that perps have won,” Fraser said. “So this is definitely a contrarian bet.” The question is, he said, whether people believe that in a few years these sorts of instruments won’t be available.
Options are not the mood right now, but that gives Joyride’s crew time to build a moat.
Sometimes new ideas aren’t bad. They are just too early. SixDegrees.com was a social media site that launched more than a decade before Facebook became one of the biggest companies of all time. Skype preceded Zoom, but we didn’t Skype the pandemic.
And every few years, someone rolls out an Airbnb for parking. One of these days!
And, who knows: one day we might even finally get actual jetpacks. After all, the electric car was dead, too, until it wasn’t.
That hasn’t gone great.