Parsec Weekly #102
Abstract
Abstract
Let me kick off with a quote I read recently:
"The distinction between L1s and L2s is collapsing. Users no longer perceive the differences between L1s and L2s (did they ever?). The blockchain landscape, L1s and L2s combined, is overcrowded and due for a shakeout. The consolidation will be less about technical superiority—it will be about having a unique niche and building stickiness through GTM." - Haseeb Qureshi, Dragonfly
I tend to agree with this take, rather than just building a chain and expecting users to come, successful teams seem to be reverse engineering the process. Building a specialised or unique product/application first and then building a chain. A few brilliant examples would be Coinbase who later built Base, Hyperliquid who are building HyperEVM and Polymarket who are rumoured to be launching on their own chain in 2025.
I think Abstract could be the next candidate which falls into this cohort. The founder Luca Netz bought out Pudgy Penguins during the depths of the bear market and completely revived the project, building one of the most successful communities in the space. Unsurprisingly the associated NFT collections have seen outstanding performance too. Granted, this case is slightly different in that for Abstract there isn’t a product/application to speak of but rather a community and NFT collection, but still I believe the analogy will hold where this prior success is used as a unique differentiator and bootstrapping method for the new chain.
From a high level conceptual standpoint, with the ultimate goal of enabling “Consumer Crypto”, Abstract are focussed on onboarding users to Crypto through providing a superior UX experience and fomenting an ecosystem of applications and experiences which meet Crypto users where they are today.
They split Consumer Crypto into 3 categories:
Discretionary Spending
Necessary Spending
Essential Spending
Recognising that currently the majority of Crypto usage is concentrated in discretionary spending use cases (Games / Social / Trading / Casino / Betting / NFTs / Memes), this will be the initial focus for the Abstract ecosystem. This wedge will be widened over time to include necessary and essential spending (e.g. Insurance or Digital Commerce).
The ultimate TLDR of their go-to-market approach is something along the lines of building “crypto’s digital amusement park” and evolving over time with new offerings which capture other aspects of people’s lives once a loyal user base has been built.
It is not rare to see applications building solutions to problems which the current set of Crypto consumers simply do not have. Meanwhile, Abstract are meeting users where they are today, while opening the door to future use cases as they develop.
From a technical standpoint, the chain is being implemented as a zk L2 on Ethereum and will have the following key differentiators in terms of UX:
Smart Wallets: no seed phrases, just passkeys
Paymasters: no gas fees, applications pay for gas on behalf of their users
Abstract Wallet: a global wallet for Abstract users which allows users to create wallets that don’t require extensions, passwords or gas fees
Panoramic governance: incentivising governance participation and voting by sharing fees with voters while rewarding protocols which are most beneficial to Abstract
Abstract will enjoy a significant head start by having the support and buy-in of the entire Pudgy Penguins community, one of the largest and most successful communities Crypto has ever created and one of the only NFT collections to have survived and outperformed following the 2021 cycle. Naturally, this has attracted builders who can benefit from the superior distribution of having this massive pre-established and bought in community.
Aixbt claims that mainnet will launch with over 100 apps live most of which will be gaming and NFT related which makes perfect sense given the context.
Following the successful launch of the meme/community coin $PENGU last month, we are already seeing the Pudgy NFT ecosystem picking back up after a post-airdrop selloff, likely pricing in a future Abstract airdrop:
It seems as though there will be plenty of incentives, points programs and airdrops to come for hungry users once mainnet goes live too:
In a sea of new launches, I strongly believe this one is worth paying attention to! Stay tuned™