To say Ethereum, Solana and HL succeed simply because they made early users wealthy feels reductive imo. Many such cases of projects doing large airdrops who don’t have much TVL to show for it today.

For HL it definitely helped but I’d also they just built a superior product people actually want to use. Perps listings also aren’t tethered to the native tokens issued on that chain given their synthetic nature. This has allowed HL to trump the dynamic explained in the post.

Solana also hadn’t really broken out until the past couple years which has nothing to do with airdropping money to users. Seems to be more of a function of underpinning the meme complex

I mean that the tokens that most effectively capture attention (eg AI agent tokens) could increasingly capture value in 2025.

This is great alpha

I also think it's important to distinguish between what kind of user that front-ends own. Solver models such as CoWSwap tend to own "fee-sensitive" whales looking to optimise execution quality down to the basis point. Conversely, TG bots and wallets tend to own "fee-insensitive" users looking for binary outcomes of 100x or 0. The latter is the much more valuable user to own. I'll be writing more about this in "The Fat Wallet Thesis".

Great question - things certainly could have looked different at the time if Uniswap never did an airdrop; however, given Uniswap continued to out-innovate Sushi, I expect they still may have won over the long-run

Valid point

I alluded to this at the end of the DEX section but arguably the strongest source of defensibility is a team that never stops shipping and a product that constantly improves. Sushi did not innovate and thus they lost those users. However, a project like Kamino has acquired users with incentives and retained them by improving their product. You need both imo.

"Owning the end user" in this context refers to which front-end users ultimately interface with. Jupiter's front-end facilitates 45% of all Solana volume while Raydium facilitates closer to 24%. So while Raydium certainly owns the end-user to some degree, the majority of volume still comes from Jupiter. It will also be interesting to see if Jup is able to gain additional market share by using their horizontally integrated products (e.g. perps DEX, Sol LST), as a logical extension to the aggregator product.

This data was sourced from DeFiLama. They define Raydium’s revenue as “a portion of trading fees that goes back to buying RAY”. I’m assuming the delta between fees and revenue is mainly fees that go to LPs

(1) Apps still need to be whitelisted afaik and (2) the TTG model ensures the incentives of all ecosystem actors are aligned. I would also assume that most apps may end up outsourcing the minting and reception to third parties anyways. This is the advantage of a completely credibly-neutral and un-opinionated  approach.

This is good pushback, especially your point that just 5% of 25% of total incentives have been allocated thus far. I would also add that unless a competitor's token is as valuable as $ENA, then their token incentives also won't go as far. This would ironically imply that part of Ethena's moat is the price of $ENA itself.

I think the bigger headwind for Ethena will be structurally lower funding rates going foward.

Yes

I couldn't agree more here that we will continue to see more projects vertically integrate. When (1) DeFi protocols are inherently undifferentiated (2) code is a commodity and (3) tokens/points can be used to acquire users, it is extremely difficult to cultivate a moat as a DeFi app. Vertical integration seems like a logical path as a means to raising switching costs. I see this trend manifesting in four primary ways:

1. Stablecoins integrating apps - Ethena would fit into this category. Maker launching Spark and other subDAOs would as well. I could see Tether or Circle launching their own payments apps in the near future. 

2. Apps integrating stablecoins - Projects such as M^0 are making it easier for apps to spin up their own stablecoin. Given apps are really the "distributors" of stablecoins, I expect more apps to try to monetize this position by capturing their own stablecoin economics. Agora is also building toward this vision.

3. Wallets integrating DEXs - Given their proximity to the end user and privileged position as the "originator" of user order-flow, we are seeing more wallets vertically integrate by enshrining native DEXs at the wallet layer. MetaMask swaps already generates a meaningful amount of revenue. Wallet swappers tend to be more fee-agnostic.

4. DEXs integrating wallets - We are also seeing DEXs such as Uniswap try to get closer to the end user to front-run this trend by vertically integrating up the stack and building out their own wallet.

Ironically, this would imply that Frax was directionally correct in their vision this whole time, just never nailed timing and execution.

On your second question about projects/defi tokens with the most attractive valuations, I wrote a recent AF post on MakerDAO. Not only do I expect MKR's fundamentals to continue to improve but "Endgame" will likely be accompanied by numerous near-term catalysts. Give it a read :)