Always great to write down thesis and many points to discuss.

In this comment I'll just discuss risk/reward. In general with social - we know risk = very high and reward = very high so ratio is very high/very high. Still an asymmetric bet because max risk as an investor is zero(unless leveraged) and upside is unbounded.

Now, the main question is if the current team actions/plan increases/decreases risk or reward.

I would say that the more generalized infrastructure approach decreases the risk of $DESO going to zero but increases the risk of not hitting a home run(most home runs start with very specific high-demand use cases). Another way to say this last "increase risk" part is decreasing the reward. 

So the ratio components have changed to high/high instead of very high/very high, but the ratio "number" hasn't changed. 

So does this change the thesis? A bit because it puts it in a different bucket for me. The goal for the investment is different now that it is even more of an infrastructure play... value will accrue to it first but more of the value will be captured by the app layer in the long run. Want to be early on $DESO but will need get into the future top apps to experience its full potential for investment return.

This wasn't the case when the blockchain and the primary social app were essentially the same, even though it was always an L1 with the potential for many other successful apps. Now it relies more on these other apps for adoption.

In general, I would agree that risk and reward are both very high for a project like this. But, due to the large treasury combined with liquidity plus a likely future hot narrative, I believe the risk is decreased while maintaining the high potential reward. 

Under normal circumstances, a company raising 100m might have a $1b valuation. So for $1m, you could buy 0.1%. of the company while they have a 100m treasury to build.

However, for deso, they "raised" 100m, but you can now buy "equity" at a 90m valuation. So for $1m, you can buy 1% of the "company" but they still have that full 100m treasury. This drastically increases potential upside and reduces risk. This is a very simplistic example but gets the point across.

As for potential reward, I personally believe the opposite of what you believe, which is what makes for a great discussion! An application on deso has limited value, and I believe the vast majority of the value will accrue back to the L1 token, $deso.

My view on applications is very similar to applications on Ethereum. They can only extract so much value from their users because they can always be forked/vampire attacked. The user stickiness is the L1 wallet, ecosystem, decentralization, and trust built over many years. Not the application.

Uniswap/sushiswap is the classic example. My belief is that many deso applications will essentially have farm and dump tokens similar to defi. Some of them will end up becoming valuable, but their market cap will be a small fraction of the total deso market cap. So for the ultra degen bets, aping into a 100k market cap project on deso could give some insanely fast instant returns, but it is closer to gambling than investing.

In my opinion, there could be some big winners on the deso application layer, but their ability to extract value will always be limited and thus their upside capped. But for the L1, ideally, it can scale "infinitely" resulting in much higher upside.

Great discussion on risk/reward, thanks for sharing your thoughts!



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