It’s no secret that crypto is largely unapproachable for the vast majority of retail investors and wannabe traders, for one reason or another. From 24/7 markets to the presence of perps, difficulties in CEX onboarding, the intricacies of operating onchain… there’s too many reasons to list, and this barrier to adoption is being worked on by many teams across the industry. Coupled with a difficult onboarding process for users is an almost equally difficult process for developers. The most prominent programming languages is Solidity, used on Ethereum and the EVM. Rust is notably used on Solana, and there is a recent influx of Move chains now in the mix.
Blockchains like Agoric and NEAR allow developers to deploy using JavaScript, and both have developer building blocks that aim to make it much easier to create basic DeFi primitives. NEAR even has their own Blockchain Operating System (BOS) which aims to make it much easier for developers to fork existing code components.
In today’s edition, we’ll be briefing you on Cartesi (CTSI), which enables the creation of linux-powered rollups allowing developers to use any programming language they desire. Despite its offerings, which improve and expand upon those of existing products, Cartesti is largely unknown and unutilized. For this reason, the protocol’s valuation may be undervalued relative to competitors or protocols in a similar category. Regardless, the protocol is well worth looking into for the potential use cases that could play out down the line and the impacts they may have.
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The Unfulfilled Promise of Linux-Powered Rollups
Cartesi emerged in 2018 with a proposition that seemed ahead of its time. Today, despite its unique value proposition it has lagged behind other players in the Ethereum rollup ecosystem such as Polygon, Arbitrum, and Optimism among others. While competitors have managed to create an ecosystem with hundreds of projects and meaningful mindshare on the Ethereum developer community, the Cartesi ecosystem is still non-existent with barely any actual dApp in production. However, that doesn’t mean that we should fully dismiss an opportunistic chance to bet on a project that currently ranks in the top 300 by market cap, is listed on all major exchanges, and features a very low supply overhang.
We are currently experiencing a market with overheated valuations where Venture opportunities are becoming more intricate due to the large valuations relative to the opportunities that can be accessed in the liquid markets – where you can bet on working projects and not give up on your liquidity being subject to cliff and vesting terms.
Contrary to being perceived merely as a Rollup-as-a-Service (RaaS) provider, Cartesi is an actual pioneer in offering infrastructure for application-specific rollups that can operate on top of a Linux environment – leveraging years of open-source intelligence and developer tooling. Not only can developers use the programming language of their choice, but Cartesi also overcomes the restrictive barriers of the Ethereum Virtual Machine (EVM), EVM+, and WASM.
If someone came up with the idea and started pitching an “application-specific rollup provider with dedicated computing resources and a Linux runtime, all while maintaining the integrity and settlement capabilities of Ethereum through optimistic rollups”, we are sure that multiple theses would start being released about how this could set a new standard for innovation and unlock unprecedented possibilities in dApp creation and functionality.
However, with $CTSI we are swimming against the current in terms of strong on-chain metrics, large community support, financial backing, and ecosystem development. Being aware of this and keeping this in mind at all times we can understand the reasons behind this bet and adapt in real-time as market conditions change. Our thesis aims to ride a valuation gap with low selling pressure and supply overhang. This is a relative value trade seeking to capitalize on the spread closure between existing and easily accessible liquid tokens like $CTSI and new players entering the market and riding the “modular thesis” narrative at multi-billion valuations.
The cherry on top that could speed up a rerating would be a killer app that makes the most out of the underlying infrastructure and enables use cases that aren’t possible or offered anywhere else, such as a fully on-chain casino or sports fantasy game. Unfortunately, we don’t expect this to happen anytime soon. Instead, what we can do is await is the announcement of strategic partnerships with large teams like Espresso, Celestia, and EigenLayer among others – all of which can significantly enhance the attractiveness and usability of Cartesi Rollups.
Key Takeaways
Cartesi was launched in 2018 with a forward-thinking proposition but has struggled to gain traction within the Ethereum rollup ecosystem, lagging behind competitors like Polygon, Arbitrum, and Optimism.
Despite its seemingly innovative offerings, the Cartesi ecosystem remains largely underdeveloped, with barely any dApps in production, positioning it outside of the main developer mindshare on Ethereum.
Cartesi ranks in the top 300 by market cap, is listed on all major exchanges, and features a low supply overhang, presenting an opportunistic investment despite current ecosystem limitations.
The market’s high valuations in venture opportunities contrast with the potential found in liquid markets and tokens with a large market cap to FDV ratio like $CTSI, where investors can engage without the restrictions of cliff and vesting terms.
Cartesi differentiates itself by providing infrastructure for application-specific rollups that leverage a Linux environment, offering developers a full-fledged operating system, extensive tooling and the choice of programming language, which stands in stark contrast to the limitations of other Virtual Machines like the EVM, EVM+, or WASM.
If you’re finding this information useful, you can access our full Cartesi Market Intel for FREE.
Our full ~20+page report goes over the intricacies and attractive attributes of Cartesi, the reasons for it’s underutilization, the case for CTSI, & more…
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