Looking back on the main line of the market in 2021, exploring the potential track of the blockchain in 2022

Before, we wrote an article titled “Early Resumption in 2021: One Article Explains the Benefits of 4 Blockchains including Beta and Alpha”. After the resumption, let’s talk about the prospects today. In fact, the prospects are always more difficult than resumptions, because the resumption Pan often has a God’s perspective, and one or two clear contexts can be grasped based on the existing facts, and then the main trunk and branches can be found…

Looking forward, people often feel that the front is full of haziness or chaos, and the direction is not clear. So what we can do is to continue to extend along the main line of 2021, add some logical reasoning and imagination, and try to find the open lines, dark lines, branch lines for the next year…

In order to facilitate the understanding of the following, here is still a brief description of Alpha and Beta:

Alpha (Alpha Income): It means that asset investment strategies mainly rely on the active management ability of managers. For example, the advantage of many private equity funds or hedge funds lies in the ability of fund managers to obtain absolute returns through active management, and returns do not fluctuate with the market.

Beta (beta income): Beta income seeks to obtain the average return of the market. Generally, for example, public equity funds, especially index funds, are pursuing beta returns, and returns fluctuate with the market.

01 The current status of the circle: basic Beta

In 2022, the basic Beta harvest may change from BTC itself to BTC+ETH+DeFi, which is related to the current environment and pattern in the circle.

From 2020 to 2021, ETH can be considered advanced Beta, and DeFi is Alpha, because for the circle, only DeFi can be used, and DeFi is only available on ETH. Now it is different. The era of ETH dominance is completely over, and the era of multi-chain universe is officially coming.

This wave of high-speed chains is completely different from 17-18 years. Back then, these were all rushing to ETH killers, represented by EOS. In the end, ETH was alive and well, and several killers died. . In this wave, several major high-speed chains are technologically more advanced, but their attitude is completely lowered.

In the end, ETH established its rightful place.

Among them, EVM-compatible chains such as Avalanche, Fantom, and Near have a higher “closeness” to ETH. They are more “competitive” with Layer 2 such as Polygon (formerly Matic), Optimism, Arbitrum, and ZK-Sync.

Cosmos and Polkadot mainly send chains and cross-chains, and form a “competition + cooperation” relationship with ETH. Solana and Dfinity have completely different technical architectures and form a differentiated track model with ETH.

In this multi-chain universe, ETH will gradually become closer to BTC, and holdings can only get Beta gains.

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After the rise of DeFi and GameFi, it can be clearly felt that the market has not paid much for the small innovations of DeFi, and it will no longer be the state where it was in the midsummer of DeFi last year.

For example, the recent fixed-rate loan agreement Yield Farming, the fixed-rate agreement Mainframe and other markets have performed in a mess.

Uniswap, AAVE, and Compound have grown into unicorns. Although market recognition is high, the Token has completed the value discovery, plus the listed value is high enough, and basically began to follow the same rise and fall of BTC and ETH. It’s hard to see the continuation of Alpha.

Of course, DeFi is the track with the fastest innovation speed. It is hard to say whether any projects will suddenly come out. The big innovations at the level of AMM that year directly rank among the Alpha revenues (note that it is only the possibility of a single project, not the whole DeFi section).

At present, the only thing that can be seen in the general direction that can drive DeFi to the next level is the virgin land that docks with the physical world.

What is budding is the world’s first DeFi-based real asset loan issued by MakerDao this year using the Centrifuge agreement. Currently, only Polymath, NAOS Finance, and Centrifuge are mining this part of the project. I feel that the future is bright but the road is tortuous, especially in The timing is very difficult to judge.

Therefore, if you want Beta harvest in 2022, it is a key factor to hold the BTC+ETH+DeFi leader.

02 Advanced Beta Layer2, high-speed public chain, application chain infrastructure

This is basically a bright line for the next one or two years. If the timing is right, you can get the benefits of a high-level Beta. Let us see one by one:

One, Layer 2

The launch of Arbitrum in September can be regarded as a landmark event. In just a few days, the TVL (total lock-up amount) has surpassed the previous leader Polygon, but it is now ranked behind Polygon, but the performance at the time is also sufficient to show that the funds are recognized “Real Layer 2”.

In the next year, Layer 2 may be in the same situation as the high-speed chain in 2021, each rushing to fight for the ecology. However, because too many people are optimistic, its starting point is very high, so it feels that it can only be a high-level Beta and cannot enter the ranks of Alpha.

After all, Alpha is something that most people can’t see before it can be called Alpha. Next, let’s talk about the situation of a few Layer2.

Arbitrum: Currently the hottest Layer2, TVL ranks first, both native projects and migration projects have its presence.

Optimism: Originally, this was the most “rooted and red” Optimistic Rollup. As a result, I felt that it was cut off by Arbitrum. The current popularity, TVL and other indicators lag behind Arbitrum.

OmiseGo: The first Plasma carried the handle, but it was completely forgotten. Recently, it has been catching up, renamed Boba, ready to do Rollup, and comes with a fast withdrawal bridge to help overcome the 7-day withdrawal period.

The problem facing the entire OP family is that the ZK system should be fully online in about half a year, leaving Optimism’s “sand landing” for ecological layout only half a year. After all, God V has personally said that it depends on OP in the short-term and ZK in the long-term. After ZK came out, the positioning and survival of the OP series is a point worth pondering.

But I have a hunch that the OP series and the ZK series will coexist for a long time, even if the ZK series is a better solution…

Next, let’s take a look at the ZK series of teams:

ZK-Sync: The most promising ZK series carry handles before. Originally, 2.0 will be released in August, which is the prototype of the general-purpose ZK-Rollup, but it is more technically difficult, so it takes longer than expected. Fortunately, it is not far off. The first phase of the test network “Polaris” will be launched in the next few weeks.

Starkware: Currently the most popular ZK series, because of the popularity of Dydx and the ready momentum of Immutable X. The competition between Starkware and ZK-Sync should be similar to the competition between Optimism and Arbitrum.

Hermez: It is nicknamed “Hermes” in the circle. Previously, it gave up the most difficult universal ZK-Rollup to specialize in transfers, and was later acquired by Polygon, which can be regarded as complementing its lack of “real Layer 2” shortcomings. However, because it is not a universal Layer 2, I feel that it is still not enough in front of ZK-Sync and Starkware.

Aztec: Rollup, which focuses on privacy, is similar to ZK-Sync but not entirely ZK-Sync. The advantage is that it comes with privacy, but the disadvantage is that privacy increases the cost. Rollup, which is more expensive and wants to achieve a universal EVM compatible rollup, is more difficult than ZK-Sync and Starkware.

There are two problems facing the entire ZK family:

The Optimism series went online earlier, with the advantage of advance layout, and the long withdrawal period has also been greatly eased through various bridges;

The Ethereum Foundation itself is building a ZKEVM with the highest level of difficulty. Theoretically, I want the app to be directly on the second layer of ZK-Rollup without any changes and translations. At that time, it may directly interact with the Zinc language of ZK-Sync and Starkware. Cairo language forms a competitive relationship, but this “ultimate ZKEVM” may not be seen until 1-2 years later.

All in all, the four major Rollup star players Arbitrum, Optimism, Starkware and ZK-Sync will have good development potential if the timing is right.

2. High-speed chain

Looking at the high-speed chain again, their biggest competitors are no longer ETH, but the few Rollups just mentioned. However, compared to the direct lines of Rollup, the current high-speed chains also have their own characteristics.

Near: The shards temporarily abandoned by ETH2.0 continue on Near, but currently there is only one shard, and multi-shards and cross-shards are still under development.

Solana: As the most beautiful boy in the high-speed chain this year, Solana uses its speed advantage to start a differentiated route from ETH. From the DEX on it, it can be seen that the order book is often the mainstay, with AMM as the supplement.

Next year, the game masterpiece StarAtlas will be launched, and I feel that Solana will follow the style of “professional trading + game chain”. It is also worth mentioning that Solana currently accounts for the largest part of the NFT data stored on Arweave.

Cardano: The existence of a mystery. It is a miracle to maintain the current market value and ranking without smart contracts. Fortunately, smart contracts are finally on the market. With the battle of the new public chain, Cardano can finally enter the game.

Fantom: AC’s Rarity Game is currently getting very hot, and its DAG (Direct Acyclic Graph) data structure is also a performance leverage, but the DeFi and NFT ecosystems as a whole are still very weak, I don’t know if it will Evolve into an exclusive game chain similar to Ronin.

Avalanche: Recently, it has received capital injection and support from several large capitals, and the price has risen accordingly. The biggest reliance is the unique avalanche agreement. The ecology is currently relatively rich, but it lacks real explosions and leaders, and it takes time to prove itself.

Celo: A chain that is easily overlooked, but in fact, the capital behind it is extremely strong, and the main thing is Moblie APP and various stable Tokens. It has the ambition of being Libra that year and it is worth paying attention to.

3. Application chain infrastructure

Axie Infinity’s Ronin sidechain and the rise of Terra, let people see another implementation of blockchain in 2021-AppChain (application chain).

At least one project has an extra option during development. Is it to find a pleasing public chain to deploy in the form of a contract? Or build a chain by yourself? It is more costly and more technically difficult to do the chain alone, but the flexibility of running the chain by yourself must also be much higher. Look at the daily life of Axie Infinity after Ronin went online, you will know what I am talking about.

So what are the options for building an application chain? For now, there are basically five:

1. Learning Ronin and building an ETH side chain should be the most costly solution. It requires star team + capital blessing.

2. Build an ETH side chain on SKALE (running Ethereum’s Dapp at 1000 times the speed).

3. Use the Cosmos SDK to develop a chain.

4. Napolkadot’s Substrate develops a chain and connects to Polkadot (Polkadot is built using Substrate).

5. Napoca’s Substrate develops a chain and connects to the Octopus Network on Near

Ronin and Terra have made a good start for the application chain. In the next 1-2 years, we will definitely see more and more application chains appear in front of our eyes. Pay attention to the application chain infrastructure, and there is a high probability that there will be good gains. , SKALE, Cosmos, Polkadot, Octopus Network are all worthy of attention.

03 Summary

Due to space reasons, we will write here first. In the 2022 outlook (below) we will write about Alpha and possible super Alpha benefits, including derivatives, cross-chain bridges (this is a dark line), Web3, multi-chain wallets and ZK-Snark Wait, everyone can pay attention.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/looking-back-on-the-main-line-of-the-market-in-2021-exploring-the-potential-track-of-the-blockchain-in-2022/
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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