Thinking triggered by the explosion of Aptos: Is the new public chain still worth our investment?

If a public chain chooses to sacrifice decentralization for performance and scalability in order to replace Ethereum, then he will be eliminated.

Thinking triggered by the explosion of Aptos: Is the new public chain still worth our investment?

Author: Akong

Original title and link: “Public chain, is it worth investing in? 》

The news about the new era public chain is very hot recently, which reminds me of Spencer, the famous encryption venture capitalist of BlockChain.

This guy said in the second half of 2019 that “the door of the public chain has been welded to death”, and many industry leaders also shouted that Near is the end of the public chain era.

The results of it? After 2021, Solona, ​​Terra, AVAX, and even the half-dead WAXP in the past have opened a new era of public chains through chain games, NFT, and DeFi, with increases ranging from dozens of times to more than 100 times.

big face scene

But that’s all in the past. Now we need to know whether these new public chains, as well as the past public chains, and even the public chain are still worth investing in, and when is it more suitable to invest?

The 17-year bull market came from the outbreak of ICOs, of which the biggest beneficiary was Ethereum. But the boat is done, and many people can’t be car builders, so everyone starts to think about who is the next Ethereum and who can replace Ethereum. People in the industry began to chant “the one who wins the public chain wins the world”.

The next 18 years will be the era of public chains, IOTA, NEO, ETC, NEM, BSV, EOS, etc. Among them, IOTA has created 10,000 times the investment income, and has also achieved the legendary “Big Air Wing”. But just one year later, all public chains are going downhill.

Everyone has seen the wealth effect of Ethereum, but in the bull market, Ethereum showed extremely high gas fees and extremely low speed, which seems to make many people see the “pain point of the public chain”, “the opportunity to replace Ethereum”- —– Scalability and performance.

But that’s not the case, or it’s far from simple. Because in the current format, only the bull market has the demand for performance and scalability.

Think about this question carefully. At that time, when Wu Jihan hard forked BCH, the emphasis was on performance, but what was the result? The highest point of BCH is 1400U, and it is impossible to go up so far.

The public chain is actually the same. The investment research report on the public chain emphasizes the progress of financing, supporting facilities, development language, and performance realization. Let me give an example, for example, the new public chain Aleo, everyone wrote this:

“The core of its technology lies in the two core sections of Zexe and Leo. The Zexe consensus protocol is improved on the original zk-snarks technology of ZeroCash, which can not only encrypt simple token transfer transactions, but also interactive transactions at the application level; Leo, as an Aleo ecosystem It can modularize the zk-snarks settings of the Zexe consensus protocol, so that any Dapp operating on the Aleo platform can use zk-snarks.”

This “developer language” is of little help in investing. Many people in the industry, even the bigwigs in the industry, have not figured out a question:

What is this thing used for?

Strictly speaking, the public chain is a 2B market. Because it does not face users but project developers, it is only because of the form of Token that ordinary investors can participate in the wealth effect of the public chain track.

But what everyone needs to understand here is that ordinary investors and VC investors have completely different logics for public chain investment.

For VCs, the key to investing in a theme lies in whether the track’s imagination is large enough and whether it can accommodate enough funds. Then in the entire Crypto industry, the only track that can accommodate large-scale capital investment is the public chain.

So from a story perspective, even before web3.0 and Metaverse empowerment, the returns obtained by Ethereum during the ICO were enough to support their interest.

Well, the idea of ​​VC is that I value one track, and I will invest in 50 projects. If one project is successful, it can get a very high return on investment, so VC can tolerate a project with a success rate of only 1%.

Even so, the investment success rate of VCs is not good. Because the investment share of good targets is limited, just having money is not enough. Can you provide help for the development of the project, can you provide more resource support, or even technical support? cannot.

Therefore, in the Crypto circle, top projects are monopolized by those early bigwigs with industry resources or industrial capital such as binance capital and FTX capital. Domestic VCs can only follow the investment, not even in the sight of others.

So as an ordinary retail investor, one is that there is no capital to cover the extremely low success rate, and the other is that even if you have money, there is no professional team to do the audit. Therefore, strictly speaking, although the public chain track has a large market, it is not the target of retail investment.

The above is the current state of the Crypto level. Secondly, we talk about the long-term development logic of the public chain.

As mentioned earlier, the process of the public chain is that you sing and I will appear, which is essentially because the core competitiveness of public chains has become technology.

What does that mean? We don’t talk about code logic that normal people can’t understand, and we don’t find out whether the code of a certain public chain has bugs or whether it is flawless. We just need to think about one question:

Will technology improve?

Will it? There will definitely be progress. So the question is, if a public chain competes with Ethereum, the core competitiveness emphasized is the high scalability and high performance brought by technology. Then it will inevitably be replaced by a public chain with more advanced technology in the future.

EOS, Near, Solona, ​​AVAX and other public chains, don’t they all progress like this? You have a new consensus mechanism, ‘new technological innovation can make performance faster, so can I have innovation, can I optimize it? All are possible.Therefore, for Crypto, technical barriers are equal to no barriers, and he cannot form a moat that cannot be subverted for a long time.

Secondly, according to the impossible triangle, if decentralization is sacrificed for performance and scalability, then in the end, it will directly compete with hundreds of traditional industries that have developed. For example, if you only need performance and scalability, no matter how well you do a public chain, can you compete with banks in the financial field?

Banks beat Crypto without decentralization

What everyone needs to understand is that any industry subversion brought about by technology is not about running faster than the existing path in the past, but turning the table upside down and blazing a new path. From handicraft to mechanical industry, from letter writing to Internet communication, it is the same.

Therefore, if a public chain chooses to sacrifice decentralization for performance and scalability in order to replace Ethereum, then he will be eliminated.

Next, let’s continue to think about a question, what are “performance” and “scalability” used for? In other words, what’s the point of a public chain with only “performance” and “expansion”? Actually it doesn’t make sense.

Ethereum has continued to dominate the ICO era by relying on smart contracts. EOS has gained market attention for the first time because of its emphasis on performance and strong funds. What about the next public chain? FLOW shines because of NFT games, Solona because of industrial capital support and NFT joint promotion, BSC because of chain games, DOT and Cosmos are layer0.

The legendary high-performance ICP launched the Peak 750U. Is there anything else behind it? How was his performance?So what’s the point of performance and scalability?

What is the use? That’s the key

The crypto industry has not entered the era of demographic dividend, and the performance requirements are not so great.Are you here in the construction industry in the bull market? What are the reasons for the congestion in the bull market and the high GAS fee?

Indeed, the public chains in the past have brought a very large wealth-making effect. But now the business format has also changed as in the past, the most obvious being the issue of project valuation.

The new public chain Sui and Aptos have a valuation of 2 billion US dollars.

This is still a Tier 1 valuation. How much is Solona’s valuation in 18 years? Near is only $1 billion in 20 years. But look at the comparison, Rao is in the biggest bull market in crypto, how much investment return does near give to the secondary market?

In the past, people who achieved great investment returns on the public chain were simply participating in early ICOs or SM quotas, or getting extremely low chip prices in the secondary market.

But is it realistic now? VC institutions are getting more and more top-tier, with bigger and bigger ranks, more and more financing amount, and more and more crazy valuations. They are thrown into the secondary market. Do you think VCs should hold coins or cash out? Then who will take over?

Still have to find your place.

The reason why the currency circle can bring huge wealth effect is because blockchain + decentralization can create web 3.0 and Metaverse, and subvert the rules of the game in the past industry, and there are opportunities for wealth redistribution .

Then there is such an existence as layer1, its function is to carry various DAPPs and applications, and become the “operation basis of the encrypted world”. One Ethereum chain is definitely not enough, and the future must be a multi-chain era.

Contradictions are unified. Although the future encryption world will coexist with decentralization/centralization, the ideology must be decentralization. It can be seen that among Ethereum and its competitors, we can only see Ethereum now. is the one with the best chance of winning.

The second is the public chains like DOT and Cosmos that propose different application requirements, and find their positioning on the cross-chain.

Finally, those characteristic public chains find their place on some more subdivided tracks.

If we want to invest in public chains, unless you have the opportunity to participate in the SM round of those top public chains, or get low prices in the secondary market (this is basically blocked), other time periods are not good Investment Opportunities.

Because we have no money and no one can support us to invest 50 public chains to earn 1% of the income. As for the ecology of the public chain —– even the public chain may not be possible, let alone the ecology?

Posted by:CoinYuppie,Reprinted with attribution to:
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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