2022 overall outlook for the crypto market

2021 is obviously a breakthrough year for crypto assets. From institutional acceptance to individual user adoption, cryptocurrency has far surpassed any period in its history. Encrypted assets have experienced a strong two-year heyday, partly because the FED’s dovish attitude has contributed to the risk appetite of market participants, coupled with the rapid innovation of the web3 protocol. What is shocking is that in this cycle, we can understand the popularity of cryptocurrency in society from this typical news brag. Visa bought a punk, Adidas bought a boring monkey, many TradFi companies such as Jump recognized the long-term legality of cryptocurrency, Crypto.com bought the naming rights of Staples Center, FTX bought the naming rights of the Miami Heat It seems that cryptocurrency funds raise billions of dollars every other week.Facebook changed its name to Meta, and the issue of stablecoin legislation is at the forefront and central position in Congress. Cryptocurrency has quickly entered the forefront of public awareness, and this time it will not disappear in a short time.

Due to the rebirth of this industry, the cryptocurrency market will still experience a parabolic boom and bust cycle. This is inevitable, but from my perspective, I see many Fortune 500 companies trying to get themselves out of this new Metaverse. To benefit from this, all they can do is support these existing decentralized protocols. If this situation continues, cryptocurrencies are likely to be more closely intertwined with traditional markets. With this development, crypto assets should transition to a slower growth trajectory, and the performance of each track in different periods will be Like the stock market, this is a trend we have seen in the past few years that has begun. The inability to adapt to the new narrative of cryptocurrency has always been the most expensive lesson for retail investors; whether it is directly receiving retroactive airdrops or simply understanding market trends so that they can make more informed investment decisions, they are willing to stand by The frontiers try new things so they benefit the most. In order to emphasize the constantly changing trends of the cryptocurrency market leaders, we can look at the three independent iterations of the DeFi protocol, which originated in the strength of LINK and SNX in early 2019.

Chainlink and Synthetix are two protocols, some of the earliest major innovations in DeFi. After the market value of Ethereum rose sharply from the beginning of 2019, SNX/ETH and LINk/ETH reached their peak in the first DeFi Summer in August 2020. Now their depression of ETH has lasted for more than a year. After the first DeFi Summer in 2020, it performed well in the second wave of DeFi in early 2021. One of the most well-known tokens is Sushi. As a fork project of Uniswap, the market value of Sushi is from November 2020. The low has risen 40 times, reaching its peak in February 2021.

At the time, other DeFi blue chip tokens Aave, Comp, and Uni also peaked against ETH at the same time. Before the cryptocurrency market plummeted in May, their USD trading pairs were basically in a sideways state. After the peak of DeFi 1.0 in February and the consolidation in the summer, we saw the emergence of the third wave of DeFi protocols, led by OHM, DPX, SPELL, TOKE and other protocols, the most notable being SPELL and OHM. These agreements also quickly gained market attention, achieving a market value of billions of dollars at their peak.

At present, these agreements have fallen sharply from their highs at the time, but it remains to be seen whether they will continue to decline in the exchange rate of ETH or can maintain value better than their DeFi predecessors.

When all of this happened this year, we also had a prosperous multi-chain ecosystem. In the past year, many L1 competing public chains have guided a large number of new users to DeFi, and the market has directly reflected this user growth effect in the market value of their projects. During the period when SNX/ETH fell by 92%, Solana’s exchange rate to ETH has risen 10 times since August 2020. If you start from the January 2021 low, it will be 25 times. Therefore, just because some tokens have increased in value too much, market participants think that we will usher in a depression for many years. I think we need to conduct some more detailed analysis of this kind of speech, because some other tokens have actually been depressed. It’s been months.

Looking ahead to 2022, we will see whether certain industries will continue to experience depression cycles during the macro peak cycle of cryptocurrencies, or whether we will see another 90% decline in the broader market like the previous cycle. The difficulty for users is to determine which tokens are mispriced in the current market, how to use these misprices, and find out which new trends are sprouting before everyone finds out.

The five main trends I envision in 2022 are:

The trend of excellent developers joining web3 from web2 is accelerating, and the use of development tools and blockchain infrastructure/middleware is increasing.

The trend of multi-chain DeFi will continue to strengthen, and the community formed with the ecosystem of the existing L1 competing public chains, and the L0 ecosystem such as Cosmos&IBC will eventually become more cohesive.

The modular blockchain architecture is getting closer and closer to the mainnet line, with the specialization of the execution layer/data availability layer/settlement layer.

With the explosion of many different P2E gaming economies, they have found creative ways to attract non-cryptocurrency users into the world of digital assets and financial sovereignty.

Everyone is trying to join the Metaverse, from large technology companies, to various celebrities, to clothing brands. In 2022, as users’ attention shifts in this direction, we will see obvious cases of cryptocurrency cooperation. Rise and race in the web3 field.

 Developer of FAANG → Shady Super Programmer 

One of the most important phenomena of the recent success of cryptocurrency is that there are now a large number of smart people engaged in the development of web3 and Dapps. I believe we will see more talented developers leave web2 technology companies to switch to web3 companies, because the industry has become more legalized this year. Obviously, if developers can speed up their work and quickly fill the inefficiencies in the market, they can have a direct impact on cryptocurrencies. There are many opportunities for innovation. Especially with the growth of platforms that use languages ​​other than Solidity, such as Golang and Rust, these become more attractive to traditional developers who have never been exposed to cryptocurrencies before. In the past, to be honest, there were no incentives for talented engineers to pay attention to cryptocurrencies. In an industry where new graduates can easily earn six-figure annual salaries and senior developers can earn more than US$300,000, no one cares about Ethereum, especially when Ethereum’s flagship applications are Crypto Kitties and ICO leading chains. The era in which there is no real use scene. Now, there is real value being traded on these networks, and for developers, the token incentives established in these new ecosystems are huge.You can feel that as people realize that web3 will not disappear, the dialogue between SV technology brothers is changing.

Blockchain infrastructure is currently one of the most neglected verticals in cryptocurrency , because users do not directly use these services, so they are not in the eyes of most people. Although a large number of ETH users know what Metamask is, few users know that Infura is behind the scenes to help most Dapps run on Ethereum. Infura allows developers to build without having to pay attention to the development and operation of the technology. Therefore, they do not have to operate their own Ethereum nodes to access the data of the blockchain, but can use the services provided by Infura. Infura on Ethereum is equivalent to AWS for most traditional developers. As we develop in this multi-chain world, many other services are emerging to serve developers on other chains. This is the track that I think will accelerate in 2022.

One of my favorite games this year that caught my attention first is Pocket Network. The reason I know this team is because they helped solve part of the RPC problem of Harmony, which is where Defi Kingdoms is located. Before this incident, I didn’t know what POKT was, but their infrastructure improved my personal experience tenfold, and the lack of RPC in the Harmony network before was a bottleneck for a large number of users to enter. Pocket Network connects developers and node providers, similar to Infura, but their economic structure is more focused on keeping as decentralized as possible and paying developers to use this service to incentivize full node users.

There are some other interesting infrastructures, which I will talk about later, they are Aleph.im, Aragon, Arweave and Lido.

 A new multi-chain world: which L1 will remain competitive and what is IBC?

In 2022, I do not believe that AVAX, LUNA and Solana will become EOS in 2018.

Comparing 2017 altcoins with 2021 altcoins is a lack of insight, because four years ago, users could do very little on these public chains. Today, users can access many native encrypted financial applications that are different from traditional financial systems by directly connecting with other users in these decentralized applications. Looking back in 2017, I and many other market participants had much lower expectations for these blockchains. I don’t remember using any (nothing at all) decentralized applications on other L1 competing chains at that time. That was the second month I entered the cryptocurrency. I read NEO’s white paper and thought I found the best thing since sliced ​​bread. But to my dismay, a few months later I found out , The market value of altcoins has fallen a lot. The actual availability of these altcoins is very different now, which is why I think this cycle is completely incomparable with previous cycles.

So, which L1 competitive chains will win? Although they have improved a lot, there will still be some outstanding ones. In the past year, many L1 communities have established enthusiastic communities, but we also have communities with such an atmosphere in 2017. If you look at any long-established cryptocurrency label on twitter, you will find old antiques that still exist. It’s proof. An enthusiastic community may stimulate the price of tokens in the short term, but the team building and innovation behind these agreements are the reasons for establishing long-term competitive advantages.

Solana is the first Alt L1 I personally discovered. At first it was because I saw the connection between Anatoly (founder of SOL) and SBF. At that time I started to pay more attention to this project because they are very smart. People, and Solana only has a market value of about 300 million US dollars, which seems very wrong. Their consensus mechanism POH (Proof of History) and the incredible high-efficiency parallel operation architecture sealevel innovations enable Solana to process transactions much faster than other chains. Its user experience is second to none, although it is not even compatible with EVM (Neon Labs wen?). As Solana’s consultant, SBF has a super strong advantage in community building and business development. Through his influence on the media, marketing and FTX platform, the connection with tradFi cannot be overstated. Pyth Network is an oracle that provides data for Dapps on SOLANA. It has a very long list of well-known partners. These partners come from traditional finance, so you can see that the benefits of this influence are very practical.Many criticisms of SOL this year are its connections with venture capital firms and billionaires, but I don’t think it is a negative factor. If anything, I tend to be a positive factor, which makes people openly support SOLANA. And invest their funds.

In my opinion, Avalanche is by far the most powerful EVM chain and provides one of the best user experiences among all other L1s. The development team is very strong and has extensive research experience in the blockchain field, which is reflected in the products they deliver to users. Its core innovation is the Snowman consensus algorithm, which allows its verifiers to use sub-sampling voting to reach consensus faster when observing transactions. Although its EVM implementation is the main focus of this year, this is only a description of Avalanche’s C chain, and the subnet with different virtual machines that may be implemented in the future is what makes it stand out from other L1s. In the future, it will be possible to deploy various specific Dapp application chains in its own Avalanche subnet. Each application chain has the characteristics of over 4000 tps and sub-second confirmation. Like Solana, AVAX also has a very strong team in commercial development, and we have seen that this is critical to user adoption.

Terra Luna is a blockchain built with Tendermint and Cosmos SDK. It focuses on its decentralized stable currency TerraUSD (i.e. $UST). It has also developed a powerful Dapps ecosystem that will connect with other Cosmos chains through IBC .Luna has the best tokenomics of all L1 because it is the only chain with a built-in decentralized stablecoin. The design of UST is like this. As the demand for UST increases, LUNA will be destroyed to cast UST to match this demand and maintain the peg of UST to $1. Other stablecoins such as USDT currently have a market value of 80 billion U.S. dollars and USDC at 40 billion U.S. dollars. They have continued to grow in the past few years. As more and more people enter cryptocurrencies, the growth of stablecoins can be said to be worthwhile for you. The simplest prediction. The market value of UST is only 10 billion U.S. dollars, and it is already developing many strong cross-chain partnerships—all Cosmos IBC chains, Near, Solana, and Harmony agreements, etc.

If you want to directly bet on the growth of stablecoins and the growth of the L1 smart contract ecosystem at the same time, Terra Luna is the only token in the cryptocurrency field. For this reason, LUNA is my favorite of all L1s. Entering 2022, I bet that their ecosystem growth, stablecoin growth, and the overall growth of IBC will push them to surpass other competitors.

The Cosmos ecosystem may be the most misunderstood in the entire crypto space. It turns out that ordinary market participants don’t even know when they are using the chain built by the Cosmos SDK, and no one really knows the role of IBC. IBC is the abbreviation of Inter Blockchain Communication (inter-blockchain communication protocol), which allows different blockchains to communicate with each other. There have been a lot of discussions about Ethereum and modularity recently. In fact, the Cosmos ecosystem has been designed based on the core ideas of decentralization and modularity from the very beginning. Keplr wallet is still very low-key, because there is nothing related to Cosmos DeFi, but now the Cosmos chain is connected through IBC, and with the deployment of the Gravity bridge connecting ETH and IBC coming, they should see 12 in the future Significant increase in usage during the month.

In the first half of this year, Umee, Shade Protocol, and Astroport should be the first major test programs to run. It will be interesting to observe how Cosmos DeFi compares with the user experience on other EVM chains and Solana.

 Modular blockchain and ETH 2.0 

The modular blockchain design describes a system architecture that separates the different parts of a typical single blockchain by creating a dedicated chain for each different layer: execution, data availability and Consensus, settlement. At present, the L1 blockchain has completed the above work at one level, which is why we have seen some blockchains encounter cost bottlenecks when more users join their network. If we are to expand the scale of cryptocurrency to the global population level, it seems that modularity is the final state for its realization. If there is no other reason, all these systems will have to be optimized in the most effective way.

For most of 2021, Ethereum will be unusable for users with small wallets, because the cost of participating in the DeFi protocol on the basic layer is very high. The market reflects this sentiment, and the emergence of various other L1 smart contract platforms has solved this problem for users. Ethereum’s roadmap towards a modular blockchain stack, using ETH as a settlement and data availability layer, and other Rollup L2 extension solutions, such as zkRollups and Optimistic Rollups to handle most transactions, will be fully implemented this year. Once this transition is complete, users will be able to use L2 solutions while still benefiting from the security of the Ethereum base layer.

My favorite project focused on building this modular blockchain architecture is Celestia.

They are building a complete modular stack that is committed to being the most effective and decentralized data availability layer and will be able to connect to other execution and settlement layers. Since Celestia only focuses on data availability and transactions, their block verification method can be simplified with proof of data availability.Basically, each node in the network needs to sample a small part of each block to confirm its validity. Through this collective sampling, the network has reached a consensus. Because of this, when more nodes are added to the network, it actually increases the throughput of the entire system, so the network can benefit from as much decentralization as possible.

 Earn while playing, gamification of digital assets 

(Play-to-Earn, The Gamification of Digital Assets)

In 2021, Axie Infinity achieved what other cryptocurrency assets did not have. It created an in-game ecosystem where millions of users interact with it every day. As the first to guide a large number of users to interact with cryptocurrencies in other ways, they have shown how powerful these economies can be when executed at the appropriate scale. In the Philippines, many people make more money by playing Axie Infinity than their serious work, which shows the economic possibility of user-first profitability. The difficulty of this trend moving forward lies in how to maintain these economic cycles so that they can last for a long time, thereby continuously attracting new users.

NFT mania is crazy in 2021. People are paying millions of dollars for Crypto Punks, Bored Apes, and even EtherRocks. We have seen huge sales of NFTs, whether because they were the first to go on the chain or just the most popular at the time.In the summer, even though the cost of ETH is very high, every new 10K profile-pic project (10k profile-pic project, which refers to a 10,000 limited NFT avatar project) was sold out and immediately opened in opensea. It is resold at several times the initial issue price. Although we see a lot of growth in interest around NFTs in 2021, the next iteration will be to provide users with practical digital assets. We have not even touched the direct integration of NFTs into blockchain games and other DeFi infrastructures. As the field matures and more funds continue to enter, I think we will see a lot of powerful teams emerge in 2022. The products they provide to users not only look good, but they will also provide them in many different ways. Users provide value.

One of the main attractions of web3 compared to web2 is that users are no longer sold products, but network participants who are rewarded for their active contributions. My most promising project in 2022 is Defi Kingdoms. In the past few years, it has been at the center of the three major development trends of cryptocurrency : DeFi + NFTs + multi-chain collaboration . DFK’s positioning is to be the first fun-to-play game that occupies the mindshare of users on multiple blockchains. It has already competed with Axie Infinity to seize market share, while Axie’s user base is only a small Part, and only on the Harmony blockchain at the same time. The two main features of DFK are its decentralized exchange, where you can trade various cryptocurrency assets, and their hero NFT, you can use them to summon other heroes, do missions, and ultimately in PVP Competing with other players, compared with other ecosystems I have seen so far, their in-game economy and heroic NFT are the most beneficial to users. Regarding their dex, users of Jewel can get 30% of all transaction fees. For those who provide liquidity, they get most of the rewards of the initial token distribution through lock-in, instead of early transactions with VCs and others in the seed round like most projects. Even with the hero ecosystem in the game, most of the costs associated with calling new heroes have been reintroduced into the system. 30% of all summoning costs will later be provided to players as mission rewards, and 10% of all summoning costs will be paid to xJewel stakers in the vault. As the project will develop multi-chain in Avalanche and other places in the future, it will provide airdrops to those who are currently actively playing games on Harmony. Even taking into account future roadmap milestones, certain land purchases and other upgrades in the game will only be provided to those who actively carry out missions and upgrade hero levels. At present, there are many problems with existing DeFi projects. Holding tokens does not really benefit users. By inserting these tokens into a well-designed in-game economy, players can get incentives and rewards and become active. Participant.

 Metaverse Mania: Using NFTs for Web3-style modern marketing 

(Metaverse Mania: Modern Marketing in Web3 with NFTs)

FOMO, or fear-of-missing-out, is now evident in many companies in traditional finance and other industries. In 2019, if you tell me that Tom Brady will be the protagonist of a cryptocurrency advertisement on a top exchange and Visa will buy NFT on Ethereum, I will definitely think you are crazy. High NW individuals, traditional venture capital companies, gaming companies, sports companies, etc., all of these companies are trying to catch up with the speed of Web3 and determine what role they can play in this new world. NFTs provide these companies with a very simple way to establish contact with these young target markets. I think this year we will see more intelligent marketing tools being used.

 The first quarter, 2022 (Quarter I, 2022)

The core position is focused on the combination of layer 1s, layer 2 extension solutions, blockchain middleware infrastructure and DeFi + metaverse. The largest positions in the first quarter will be Jewel LP positions, Near ecology and Cosmos ecology. Near Eco has 800 million ecological funds, a strong development team, and a bullish technical K-line, which broke through to new highs from more than 100 days of consolidation, so their positioning is very good. The Cosmos ecosystem had many development milestones in the first quarter, including Interchain Security, Liquid Staking, Interchain Accounts, Evmos [“EVM-on-Cosmos”], and the emergence of a cohesive Cosmos Defi ecosystem. Other developments will greatly improve the user experience in the ecosystem, and Interchain security should solve the problem of token holders accumulating value to Atom. Blockchain infrastructure and middleware are one of the least discussed areas because users do not directly connect with them, but it is one of the most important vertical areas in cryptocurrency.Pocket Network, LIDO, Arweave and Aleph.im all play important roles in this field. Treeverse and Defi Kingdoms are my favorite NFT/GameFi projects. Treeverse is a mobile-led MMORPG, which is building a Metaverse interactive world. You will be able to use the plot of your Treeverse founder and your Timeless NFT character to complete tasks, purchase equipment, build land, and earn their in-game currency $SEED. DeFi Kingdoms is a well-functioning decentralized exchange. It is also a multi-chain game. Users can cooperate with their DFK heroes to form a guild. They can use these heroes to do tasks, upgrade levels, summon other heroes, and Compete with other players in PVP in the future.

 Portfolio (Protfolio Allocations)

Layer 1s / Layer 2s

▣  NEAR Protocol

NEAR is a sharded POS layer 1 blockchain. It is centered on developers and users , has a very strong technical team, and there is almost no hype in the media… This year I quickly realized that , When I went out to carnival in the depression era of 2018 and did not pay attention to cryptocurrency, there were actually many very smart people who were building today’s technology. If you, like me, discovered cryptocurrency in 2017, then when the market value fell, you probably also forgot the cryptocurrency, and now you are here trying to catch up again. So, if you are such a person, then you are welcome to come back!

In short, the biggest difference between NEAR and other chains is their focus on usability, not only for users, but also for developers. One of the major obstacles for newcomers to enter cryptocurrency is the difference in user experience: requiring people to learn blockchain technology, manage their private keys, avoid fraud, and navigate to the correct website. This is a typical non-technically skilled ) Is a high threshold for users. We have seen the prevalence of BAYC users, and their apes are constantly being stolen. In order to do this for end users, NEAR allows developers to extract the messy part of interacting with many blockchain Dapps by setting up a NEAR account: users do not have to choose a wallet every time, they can easily subscribe, allowing users to manage each App permissions hide the cost of infrastructure by allowing developers to pay usage fees on behalf of users and provide predictable pricing for transactions. Provide convenient users for new developers: The NEAR node runs WASM, which can be compiled from popular languages ​​such as RUST. They provide a large number of tools to make developers easy to operate, including one-click deployment, integrated unit testing, and a simple front-end Integration + debugging.

▣ Aurora

The Aurora engine is a high-performance EVM built on the NEAR protocol blockchain. The fee on Aurora is extracted from the user, and it can be easily accessed through Aurora Bridge and other bridges (such as Allbridge). Currently, most of the activities on NEAR are on Aurora, but I expect this will change with the projects launched after NEAR’s $800 million ecosystem fund.

▣ Octopus Network

Octopus Network is a multi-chain network that aims to create an ecosystem of interoperable professional application chains, which takes advantage of the security of the Octopus Network.Octo does not have its own chain. On the contrary, it is a set of smart contracts running in the Octopus Relay on NEAR. Combined with a set of validator nodes, the application chain will pay the validator node fees for the security of its applications. Its structure is similar to Polkadot, but for the application chain, the cost of launching its network on Octo is much lower than the cost of launching parachains on Polkadot. The plan for these application chains is to build with the Substrate framework and a dedicated application front end. Once the implementation of Substrate-IBC Pallet is completed, these application chains will also be compatible with IBC and be able to communicate with other NEAR projects, because the Octo bridge will deploy a NEP141 packaging contract for each application chain token.

This project is interesting because it fills a dedicated niche market, and I haven’t seen anyone else execute this well at the moment. If the Octo network can effectively guide many application chains, then the OCT token will greatly benefit from all these chains that require the shared security of the Octo validator set, because their ecosystem is designed to work with the IBC chain, here I see that a lot of cohesive multi-chain cooperation will have room for growth. Terra and NEAR have announced an important partnership because UST will be integrated into all ecosystems of NEAR and Aurora. It is no surprise that this relationship will continue to develop in the future.

Meatverse / DeFi

▣ Defi Kingdoms [Jewel]

Defi Kingdoms is a DEX, NFT trading platform and an immersive game ecosystem for playing and earning. At its base layer, it is a dex running on the Harmony ONE blockchain, allowing users to trade between various cryptocurrency assets. Jewel is the governance pass of DFK. Users can deposit Jewel into the DFK vault and earn 30% of all transaction fees on the platform. In addition to being able to mortgage gems in the vault, users can also provide liquidity between different cryptocurrency asset pairs in Gardens (farming pool of the DFK platform). The current annual interest rate is so high because the intention of Defi Kingdom is Encourage early contributors to guide the development of the ecosystem. DFK is a fair community, started without any venture capital participation, and providing value to game players is the key focus of the team’s long-term vision.

The design of LP rewards is like this: there are unlocked rewards and locked rewards, which are paid in the form of Jewel.The unlocked rewards can be obtained immediately, while the rest of the rewards will be locked before July 2022, and then will be unlocked linearly until July 2023. The ratio of unlocking rewards increases with the advent of each era, and the current ratio is 30% unlocked/70% locked.

▣  LP Positions: Jewel-Matic, Jewel-Avax, Jewel-Luna

Polygon[Matic] is one of the leading research teams building various zkRollup solutions for ETH 2.0, while also maintaining their own POS layer 1 chain. Its monthly chart is now near all-time highs after breaking through its previous year highs in May, and has been consolidating for most of the second half of this year, while other L1s are in the spotlight.

Avax and Luna, for the reasons mentioned above, if Solana has an active LP pair, they may also join this one.

DFK occupies most of my time in the fourth quarter. It reminds me of when I played WoW when I was young, but it was a DApp on the blockchain. The core function of DFK is heroes, which can be used to explore and upgrade, summon other heroes, and finally compete with other players in PVP in the game. Considering the possibility that the long-term roadmap completely spans multiple different blockchains, the upper limit of this project is very high. In 2022, I expect that there will be many different guilds in DFK, because players will compete with each other who will have the strongest team and kingdom in cryptocurrency. Entering a castle is a common mantra in CT circles, but DFK will enable you to team up with other players and build your own castle.

Blockchain Infrastructure (Blockchain Infrastructure)

▣  POKT Network

As a decentralized relay network operation for blockchain API requests, Pocket Network is an extremely important Web3 infrastructure. Their economic structure is set up to incentivize complete node operators to pay when developers need to use the network to access data for their applications. Many developers need to obtain high-quality read/write data directly from the blockchain, but they do not always get RPC specifically for their applications. Pocket describes itself as the “Uber in the server field” because technically speaking, when you query their network, you don’t know what server you will connect to, but they handle all service requests through their blockchain. Provide users with what they need. As more and more developers use Pocket Network, node operators earn more money from participating in the network, which in turn encourages more node operators to join the network.

The economic system of Pocket Network is very smart, and its design method can greatly reduce the cost of developers who use the network. There are three main functions here: staking, minting and burning POKT. In terms of applications, you have the ability to put your POKT into hosting when using the agreement; for developers, they do not need to pay the company for some infrastructure as a service projects, and through Pocket Network, they can access the network Pre-mortgage POKT and use the network until they cancel the escrow. Because Pocket Network is not a centralized company that needs to charge fees to pay for security deposits or pay for cloud hosting services, all of these expenses have been eliminated, which is much cheaper for developers. Regarding the nodes in the Pocket Network that provide services for developers’ requests, they pledge POKT to obtain the right to work in the network, and they will earn a certain amount of POKT for each request for service applications.

I have been guessing how to attract external non-cryptocurrency developers to join the cryptocurrency field. This seems to be one of the best methods. For me, POKT is one of the most effective ways to bet on the growth of developers, users and speculators in the cryptocurrency field. As the web3 developer community increases, there will be more web3 applications that require this kind of access to blockchain data, and in turn there will be more people using these applications.

▣  Arweave

Arweave is a decentralized network that focuses on permanent data storage. Many NFT projects use Arweave as their backend for storing data, and many blockchains use Arweave to store transaction data. Instead of using AWS to store data, the team can use Arweave to store all the data for their application. Arweave’s blockweave architecture and SPoRA consensus mechanism make it more scalable than other storage solutions such as Filecoin. One of my favorite trading pairs next year is AR/FIL. From a technical point of view, Arweave has been consolidating above its historical highs since May in the past three months. Assuming this is a pre-rising gain, it should see a new high soon.

▣  Lido

Lido is a multi-chain liquidity mortgage solution. It allows individual users to mortgage their tokens through the Lido platform and receive tokens representing the collateral, which can then be used in other DeFi ecosystems.Lido’s positioning is very good, because it has no competitors in this field, and it can be deployed on multiple blockchains incredibly quickly. In a world where users are active on various blockchains and have full access to your capital, this cannot be overemphasized. From the technical candlestick point of view, Lido is close to historical lows and is testing a major support level. Although they publish codes very fast, they have not received the attention of most people in the encryption field. I think this will change as more and more people start to use their services.

▣  Aleph.im

Aleph.im is a decentralized distributed cloud platform that provides computing services, file storage and database hosting. One of the main use cases of Aleph.im is its indexing solution for the Solana blockchain. It is building some really strong partnerships, but it is not known. They cooperated with game company Ubisoft to become the first dynamic NFT storage solution in their game “Tom Clancy’s Ghost Recon Breakpoint”. This is one of many collaborations between AAA-level gaming companies and cryptocurrency builders that I think we will see in 2022. Their other big partnership is the collaboration with the Neon Labs team, which focuses on bringing EVM to Solana. Neon Labs will use Aleph.im as their indexing solution to obtain all the information between Ethereum and Solana.

Cosmos ecosystem

▣  ATOM

ATOM is the native token of the Cosmos Hub, which connects all other blockchains built with the Cosmos SDK through the inter-blockchain communication protocol. One of the main complaints that people have against ATOM is that the token economics is not well designed, because the team’s focus is mainly on developing Tendermint and the Cosmos SDK, allowing the team to build its own professional ecosystem, such as the Cosmos zone. Now, the focus of the team is to connect all these ecosystems together and connect the collective value to the Cosmos Hub. Through the cosmos network pledge, the pledger will not only provide security guarantee for the Cosmos Hub, but also provide security guarantee for other small blockchains connected through IBC; this means that the pledger will not only receive ATOM token rewards, but also each Local token rewards for each chain.

▣  LUNA

LUNA is one of the most powerful alts tokens in 2021, because its core use case has experienced impressive growth: the decentralized stable currency UST. The main product Terra Luna provides to users is its flagship 20% annual interest rate savings agreement Anchor. Now, LUNA is focusing on building more Defi ecosystems and connecting to other parts of the cosmos chain through IBC. The launch of Astroport, Mars Protocol, Levana Protocol and other protocols will bring more attention to the already thriving community. In 2022, the growth of UST should accelerate because Terra Luna puts itself completely at the center of a developing multi-chain world.

▣  SCRT

Secret Network is a layer 1 blockchain network that focuses on programmable privacy . Compared with other popular privacy public chains, it is the best performer in the fourth quarter of 2021, and its market value is still relatively low. The SCRT ecosystem should have a great development in 2022. The first is the launch of Shade Protocol as the DeFi center, and its Stash Network as the NFT market. For DeFi users, the attractiveness of privacy is huge. At present, all your DeFi operation history is completely visible on the blockchain. Compared with web2, one of the main shortcomings of web3 currently is the lack of user privacy. It is common for traders to track the wallets of large funds and other traders, and the work of blockchain analysts will only change over time. better.

▣  ANT

Aragon focuses on providing all the necessary tools and infrastructure for the group to build its own DAO. DAOs have become more and more common recently because Canadian primitive cryptocurrency investors are looking for more formal ways to collaborate on their ideas, and organizations choose to structure in this way rather than as a business in the traditional market.

There are many other coins with smaller market capitalization in the Cosmos ecosystem, and they have also found their position in the ecosystem well. Most of them have been building, and the focus has been on other places in the cryptocurrency field, but as attention shifts to IBC, many of them may be the entry points for r/r. If you look closely, most of them are easy to find.

NFTs

▣  Treeverse

Treeverse is building an interactive MMORPG game with NFT as the main game asset. They first focused on the development of the Android system, then the iOS system, and then the PC/Mac system. This team raised $25 million in seed funding under the leadership of Animoca Brands. ROOT will be the governance token of the game, and SEED will be the token you get through playing the game. So far, the art and animation released by the team are very good, and I look forward to tracking the development process of the game before the game is about to be released.

▣  Strange Clan

The Strange Clan game will be the first Metaverse space that exists in the Cosmos ecosystem. It is a 3D world built on the back end by the Passage3D team using Unreal Engine and Akash’s decentralized cloud computing network.The characters in the game will be able to complete tasks, buy and sell equipment and land in the game’s NFT market, find animal mounts for their characters, and participate in the mount guild.

▣  Aurory Project

Aurory is a play and earn game built on the Solana blockchain. They have completed the first pass sale and launched their first set of NFTs that can be used in games. At present, you can pledge $AURY at an annual interest rate of about 33%. If you lock the pass until June this year, the annual interest rate is about 75%. Many games that launched NFTs before the game’s release are currently in a strange state, because when users don’t have much to do, their attention will fade, so as the game approaches the release milestone, see how the price trend will develop. It will be fun.

Views on other projects

▣  Solana

Solana has two main catalysts in the first quarter: Phantom’s mobile wallet and Neon Labs EVM compatible implementation. The attractiveness of the two should be huge for new users and developers to enter the SOL ecosystem. In the short term, I think there will be better performance from the perspective of R/R, because Solana’s market value is the largest among other L1s except BNB, but I still think Solana’s current price range is more in Re-accumulate before rising, not distribute. The sentiment for Solana DeFi coin is at a peak and low point. We believe that next year will see more and more developers join the Solana ecosystem, and the return rate of many top applications will exceed Solana. In the recent hackathon, there are many items worthy of attention. I hope I can transfer the profits from other transactions back to Solana, because these catalysts will bear fruit later in the quarter.

▣  Avalanche

The main catalyst for Avalanche this quarter was the launch of DeFi Kingdoms. In the second half of this year, AVAX’s performance in terms of stationed users surpassed almost all other chains. Combining with games like DFK is a great cooperation. After the Jewel single currency pledge, the AVAX/Crystal pledge pool is likely to be my largest position in the second quarter. I’m not sure about the timetable for the launch of projects using their subnet architecture, but it will be another basic catalyst different from other chains.

▣  Boomercoin, aka Bitcoin

Bitcoin is in a very strange position. For traditional financial allocators, it is the most risky but sufficiently safe asset, but at the same time, it is the least risky investment for the original investors of cryptocurrency. As I said before, I think Bitcoin’s dominance is a measure of the increase/decrease in the risk of the cryptocurrency market, and I still think this is the most accurate view of it. As the cryptocurrency matures, there will be many competitive smart contract platforms that will grow into a larger piece in the total market value of the cryptocurrency, but none of them will compete with Bitcoin, because Bitcoin fulfills its role as a hard currency. With a single role, this is something that other public chains cannot do. Therefore, when the altcoin market expands like during its heyday, the market share of btc usually shows a downward trend, but when the market retracements, the market share of btc usually shows an upward trend, because the market value of Bitcoin almost always shrinks less than alts. The market value of alts usually rises crazy several times in a short period of time.

In the fourth quarter, BTC rushed to new highs twice in October and early November, but failed to break through each time. One thing I noticed is that all BTC ATH breakouts this year coincided with the local lows on the ETH/BTC chart. I don’t think this is a coincidence. In my opinion, investors outside of cryptocurrency and original investors of cryptocurrency have obviously changed their views on these smart contract platforms. The emergence of DeFi and NFT has been the main focus of the cryptocurrency field in the past few years, while BTC has maintained its role as a hard currency. Non-cryptocurrency and cryptocurrency native investors hope to take a share in this fast-growing ecosystem. I think there is a fast-growing, albeit much quieter, group of old cryptocurrency original investors who own a large amount of Bitcoin and have very little exposure to other cryptocurrency assets. As traditional financial asset allocators become enthusiastic about Bitcoin as an investment, many Bitcoin holders have also become enthusiastic about altcoin as they begin to move down the risk curve. If you are a trader like me, this is a good balance, because as long as there is a steady flow of funds into the cryptocurrency market, you can more easily take advantage of altcoin opportunities without worrying about BTC.

Bitcoin still has long-term investment value for me. In my opinion, it is wise to keep BTC savings for many years to come, because I don’t think there are any other better forms of currency that can store value for a long time, but just In terms of trading during its heyday, I think it has a better use in hedging declines.

▣  Ethernet Square

Ethereum by the middle of this year, ETH should have all the necessary infrastructure extensions to effectively realize its vision of a functional modular blockchain stack. If there is no further delay in the merger, Ethereum will switch from Proof of Work (POW) to Proof of Stake (POS) in the late spring and early summer, and zk-sync 2.0, Polygon Hermez, Polygon Miden, Starknet and other zkRollup solutions should be completed and put into production. Currently only a few zkRollups are running, such as dYdX and Immutable X, but none of the existing solutions utilize EVM like future solutions.zkRollups will allow Ethereum users to experience low fees, because rollups novelly uses zero-knowledge proofs, which allow transactions to be performed off-chain and enter a proof in batches. The base layer can be used to confirm the validity of these transactions. I tried one of zkr dexes, ZigZag, it is incredibly fast and easy to use, and I expect the user experience of these apps to be as good as other Dapps on L1.

It will be interesting to observe whether users of other L1 blockchains will decide to use these rollups schemes instead of the chains they are already accustomed to. In my opinion, ETH’s expansion plan seems unlikely to take away this market share from those L1s that directly incorporate non-cryptocurrency users into DeFi without any friction, unless the user experience of these second-tier solutions is better than other first-tier solutions. The layer on the blockchain is much better. If we take Arbitrum as an example, its speed is basically the same as other L1s, and the cost is slightly higher, then we can see that by comparison, the growth there is the smallest.

So, why don’t users care about Layer 2 solutions, or more precisely, why don’t they care so far? I think there are two main reasons:

The first reason is that the main source of the TVL of ETH is the rich users of the native ETH of cryptocurrency, and they are not really troubled by the high fees of ETH . If their 8-figure stablecoin farms operate uninterruptedly and they feel that their funds are safe on the mainnet, they don’t necessarily care about paying higher GAS fees to ensure this security. They have no problem waiting for a complete transition to POS, and they will prepare 32 ETH to run their nodes.Therefore, for such users, even if Arbitrrum provides a much lower gas fee, bridging to use the same application on the basic layer, it will not bring them much benefit. These users are not looking for the next 100-fold growth target, because Ethereum is already. These old ETH users are different from Moonboi Ape User 123 who joined in August 2021. They do not pursue the next OHM fork project, new algorithm stablecoin or any other creative pvp DeFi games.

The second reason shows a group portrait of newbies in the cryptocurrency field, who are pursuing the next goal of higher returns. This group is looking for the brightest new things, and what they think can get higher returns in the shortest time, and these are often not available on Ethereum. At present, Solana and Avax are like cool uncles at a picnic. They give you money to go to the movies with your friends, while Ethereum is an uncle who loves to complain. They will say that children no longer respect their elders and will Report to your parents that you and your friends are drinking and eating hot dogs in the park.

What makes Ethereum famous is the security and decentralization of the network. Although it is very important to the encrypted network in the medium and long term, it is not a selling point to attract new users. For users, as long as their own experience is not affected, maintaining network security should be the main concern of developers and builders, rather than what users care about in the front-end. In my opinion, all these networks will tend to be decentralized over time, as long as developers have this core focus in their long-term development blueprint, and many L1 competitive chains will be able to do so in less than a year. Has user activity. The current target market for Web3.0 is not those in their 60s who have savings from Fidelity Pension Fund, Wells Fargo (Wells Fargo) and Chase. In the future, the Web3.0 system will be guided by those who are not loyal to the bank and are not loyal to the new bank. Young people who are more interested in things. So, if your selling point is just “a decentralized and secure network where users can interface with DeFi applications and earn 5% instead of just 0.01% per year”, you might persuade some non-encrypted baby boomers (if You have an integrated application that serves them behind the scenes), but you cannot attract a large number of new active investors, because this is now the default setting for every smart contract platform.

In the short term, I think ETH is not a good business for the following reasons:

1) Its market value is far higher than other monomer L1, but the user experience is worse than all other monomer L1;

2) If L2 is to compete with L1, they will need a seamless new user experience and attract new users like other ecosystems, so the best performing L2 may have a token and be directly accessible from a centralized exchange . Unless you think these tokens are completely worthless, holding these network tokens should be much better than just holding spot ETH.

3) ETH is not optimized for the modular architecture. There are other chains that are further ahead in the development, with the same capable development team and similar system architecture, and there are other teams that focus on the modular architecture part of ETH from the beginning. . NEAR is a fragmented PoS blockchain that is compatible with EVM through Aurora, and it will soon be possible to connect multiple application chains through its Octopus network. The design of ETH 2.0 is similar, but due to its existing design and the large amount of value that exists on the network, it is much more difficult to complete it quickly. The merger Merge has been postponed many times because it must be done very well, because all the existing value exists on Ethereum, and other L1s can be built without these obstacles.

4) Currently, ETH is a single block chain, but it is moving to the settlement and data availability layer, with Rollup as the execution layer. There are also teams like Celestia, who only focus on the data availability layer, but similar to NEAR, because they are built from the ground up, they can devote their rights to one thing and complete it with all their heart.

5) Once ETH transitions from the settlement layer, execution layer, and data availability layer to a pure settlement layer, part of the value of Ethereum’s market share will be taken up by other parts of the ecosystem. In zksync 2.0, users can choose to use ZK Rollups for on-chain data availability or ZK Porter for off-chain data storage. Zk Porter’s transactions are more efficient and cost-effective, but ZK Porter’s account must be protected by Guardians-Guardians refer to the holders of the ZK Sync pass. These will be used to track the status of ZK Porter and the data availability of these accounts. Because the ETH roadmap focuses on Rollup, the plan is to execute most daily transactions off-chain. For zkPorter and other similar design patterns to succeed, they must allow users to mortgage tokens to maintain the security of these additional systems.I expect the market will find a balance between the evaluation settlement layer and the other layers of the new module architecture. I also firmly believe that once it is fully deployed on the main network, the entire module system will benefit a lot. But at the beginning, I hope that the implementation of these other layers can get more value, because they will start from scratch.

6) The future of Defi will not only exist on a blockchain. I think we have not seen the final state of these smart contract platforms. In a field of rapid innovation and iteration, in my opinion, we are more likely to have a multi-chain network ecosystem, where all networks are running at the same time, instead of just one solution that works well, but everything else fails. . Decentralization applies not only to the design and implementation of systems for maintaining network security, but also to the diversification of opinions, users and developers in the encryption field.

Other things I think are worth seeing but haven’t described in detail are:

1) Curve Wars: CVX / CRV / YFI / BTRFLY;

2) SYS+MUTE;

3) Spell & MIM + Sushi;

4) FXS;

5) INV;

6) GMX / dYdX / PERP / MNGO / Drift Protocol;

7) DPX / RBN / PsyOptions;

8) Dusk;

9) MetisMagic (TreasureNFT);

10) Ninja on Sol;

11) Levana Protocol;

If you are very active in the encryption field, you may already understand what these are, but if you are still a new user, then these are good things worthy of your research.

 Summarize 

At the end of my last article for the fourth quarter of 2021, I asked a few questions I was thinking about in the next few years: ” What will be the killer app in the 2020s? Amazon in the 2010s, and in the 2000s. It was Facebook at first, what will it be in the Metaverse field? How to attract millions of non-encrypted users?

I am still actively thinking about this question, but I believe the answer may be right here. Currently there is only one Dapp that has attracted millions of daily active users-Axi Infinity. Although DFK is still in a very early stage, it is the first decentralized application I have seen that connects DeFi and games in a way that is very interesting for users. Uniswap is a revolutionary development, but click to add ETH/USD LP, and then calculate your short-term losses and trading gains is not an interesting thing. I don’t know how many regular dex users participated in the governance of these platforms, or really used their tokens for anything other than speculation. The gamification + mobile accessibility of these original DeFi elements is the next step that can truly open up a large part of the target market for DeFi, because users are willing to participate in the ecosystem, rather than just guessing. In addition, because users actively participate in the ecosystem, if properly designed, the tokens of these games will be more practical than typical governance tokens.

Which unexplored market segments will be more popular in the coming months or next year ?”

To answer this question, I think the least discussed and most important market segment is the underlying infrastructure that drives these Dapps . Counting on non-encrypted users and developers to join, but not providing them with appropriate tools for seamless interaction, is a very high threshold requirement. If we want a completely decentralized network, then we need to make it easy for users to participate, without the knowledge of senior engineers, or living in an encrypted world every day for the past ten years. In addition, if we want more developers to enter this field, then we need to provide all these systems with the necessary tools and documentation to make new applications easy to deploy, and there are communities willing to help and answer questions. All are crucial.

Looking back on 2021, there are some things that I did not achieve perfection. I hope that the new year can be improved:

1) Excessive trading under volatile market conditions;

2) Selling goods prematurely without insisting on long-term trading plans;

3) When my ideas are not in line with the mainstream and are hesitant, I need to be more radical;

4) It was not set up on each chain at the beginning of the year. It would be very useful to know which wallets/bridges to use;

5) The operation is inconsistent with the diary. When I write everything down, I will be more accurate and clear-headed.

Favorite exchange rate:

1) long Avax / short Ada

2) long Jewel / short Axie

3) long Atom / short Dot

Here are some bold predictions for this year:

1) The number of Keplr users will exceed Metamask;

2) The top 10 by market value will be DeFi Kingdoms;

3) Phantom will have more than 20 million users by 2023;

5) The performance of DeFi in the SOL ecosystem is far better than Solana;

6) DAOs composed of encrypted native traders will become more and more common;

7) There will be at least one P2E guild in the top 25 by market capitalization;

8) By the end of next year, there will be more people using encrypted mobile applications than using chrome plug-ins;

9) SoL/Luna/Avax flips Ethereum and keeps it;

10) The market value of Atom breaks through a new high;

11) The DeFi option has received a lot of attention;

12) Important stablecoins passed legislation allowing banks to hold stablecoins on their balance sheets;

13) One of the top technology companies started to use the AVAX subnet as a development network for blockchain development.

A few days ago, I mentioned on Twitter my main issues for 2022 and the next few years, namely, modular blockchain architecture and value gains:

In the modular blockchain stack, which layer should capture the most value, or should it be roughly equal across all layers ?

To be honest, I have no answer to this question, but as the scale expands in the next few years, I think this will be one of the most important things that traders need to consider and how to adjust their positions accordingly. My initial thought was that those teams focused on building truly efficient and specialized chains would do well, which is why I love zkSync and Celestia later this year.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/2022-overall-outlook-for-the-crypto-market/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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