Billionaire investor Mark Cuban has tipped commercial smart contract adoption as the next catalyst to drive the crypto and blockchain sector.
The Dallas Mavericks owner and crypto proponent was commenting on the current “lull” state of the crypto market in comparison to the internet or dot com bubble in the early 2000s, which saw a lot of over-hyped and relatively similar companies collapse.
The crypto market is painting a fairly grim picture of late with nearly all of the top 100 digital assets facing double-digit losses over the past seven days.
There are likely to be several factors behind the bearish sentiments, such as the Federal Reserve’s recent policy updates. However, on Twitter earlier today Cuban also pointed to a current “imitation phase” in crypto/blockchain as opposed to genuine innovation.
“Crypto is going through the lull that the internet went through,” he said.
Crypto is going through the lull that the internet went through. After the initial surge of exciting apps, NFTs, DeFi, P2E, we saw the imitation phase as chains subsidized the movement of those apps to their chains (ala bandwidth and storage subsidies by startups in the 2000s)
— Mark Cuban (@mcuban) May 9, 2022
In Cuban’s view, the blockchain projects that purely “copy what everyone else has” by bridging over NFTs to DeFi protocols will die out eventually, as he argues that they are not required on every chain.
Instead, he opined that smart contract platforms geared towards commercial usage and replacing software as a service (SAAS) apps will thrive long term:
“What we have not seen is the use of Smart Contracts to improve business productivity and profitability. That will have to be the next driver. When businesses can use Smart Contracts to gain a competitive advantage, they will. The chains that realize this will survive.”
In terms of recent institutional backing of smart contract platforms, CoinShares’ crypto funds report for all of 2021 shows that Ether (ETH), Solana (SOL), Polkadot (DOT), and Cardano (ADA) were the options of choice for the heavy hitters last year.
According to the report, funds offering exposure to ETH were the resounding favorite, garnering a whopping $1.38 billion, next in line were Solana funds at $219 million, Polkadot products generated $116 million, and Cardano funds also pulled in $115 million.