Nova

My belated prediction for 2026 (sorry was busy launching an L1 and having a baby). Here goes: The repricing of 2025 was the beginning of a valuation reckoning that will continue and become steeper in 2026 for overvalued tokens. Let’s start by looking at L1 token valuations – given their high valuations. @DBCrypt0 put a great piece of video content on this one comparing these valuations to public companies, if someone wants to link below. So the questions smart money have (finally) started to ask is: (1) Is the actual solution, and ability to iterate, uniquely positioned to stay ahead and support the most demanding, latency-sensitive use cases? If you decentralized too fast and lost control to upgrade and fix problems and IBRL – good luck keeping up with new entrants. RH Chain is coming. (2) Is the underlying business activity proven and sustainable? And no, an ecosystem mostly dependent on fleeting speculation of memes and congestion fees does not cut it. Investors want to see proven fee-generating businesses that also work in the centralized world - and they don’t know or care what priority fees are. Conversely, perps trading is a great example of an onchain biz that does make sense to them (Binance, Bybit, etc). (3) How much value is accruing back to the token being invested in? Yes, deflationary assets hold more value than inflationary assets – not rocket surgery. Sure, one can argue that it makes more sense to invest in growth rather than buybacks at certain points – but over time, deflationary assets win. Hyperliquid is the only L1 that is ticking the above boxes – so they have shown what a reasonable valuation is. Their continued outperformance is proof. Is Fogo ticking those boxes? Nah, not yet. We just launched and are still building out the ecosystem and flywheel. But this is the reason we raised where we did – and I like our starting point. And if you are holding an L1 token that is not ticking those boxes but still valued above HL? Get ready for more pain. The reason you’re down 50% from the ATH is smart money has already sold and rotating to the underpriced plays that WILL tick those boxes. And the reason these high flyer tokens are somewhat holding up? Those valuations mean they have 100’s of millions of dollar to spend on marketing distracting you from the fact that their token isn’t worth near where it’s trading. That might make it a slow bleed more than an extreme drop. Shiny conferences and narratives can work for hypnotizing the masses into buying/holding, until they don’t. Expensive short-term lipstick. When will it end? As long as $XRP is valued where it is – the day of reckoning has not yet come. It will. It always does as markets mature and investors have better options. Is it all dire? Nah. Find the reasonably valued options that are poised to tick those boxes. And finally – this is called the “maturation of the space and building respectable onchain businesses with fundamental value”. When we get there, it also means the winters won’t be as frequent and damaging - as there is fundamental value and less fragility. Back to work.