To 2021: The Golden Age of the Crypto World

Tell you in 16,000 words why 2021 is so special.

In 2021, the second year human beings enter the epidemic era, social life and commercial activities continue to migrate online on a large scale.

Biden became president of the United States; the 2020 Tokyo Olympics were postponed to this year; the 93rd Oscar, which was also postponed, awarded the best film to Zhao Ting’s “A Place of Nowhere”…

The global central bank continued to release water, and the three major US stock indexes rose 20% from the beginning of the year; Bezos stepped down as Amazon CEO and Facebook changed its name to Meta; Musk was elected the 2021 American “Times” Person of the Year. Once his label was Tesla, he is now Dogecoin; “Digital RMB”, “Metaverse”, “Double Reduction” and “Double Carbon” were selected into Xinhua News Agency’s “Hot Word 2021″…

We have witnessed the ups and downs of too many commercial forms, and even their demise. However, there are few fields that are as chaotic as Crypto but full of vitality. There are always new stories, new capital, and new flows.

2021 is the golden age of the crypto world.

Bitcoin and Ethereum have repeatedly set record highs. The total market value of cryptocurrencies once reached 3 trillion U.S. dollars; the primary market was booming and mainstream capital entered the market. According to statistics, venture capital funds invested 30 billion U.S. dollars in the crypto industry this year; smart contracts on the chain The explosive growth of applications, the transaction volume of the Ethereum network alone has exceeded US$3.6 trillion.

From the Meme coin carnival and NFT craze at the beginning of the year, to the rise of the new public chain ecology in the middle of the year, the continuous evolution of GameFi and DeFi, the leading and upstarts of Metaverse, DAO and other sectors take turns to play, we feel the power of innovation every moment .

In 2021, the U.S. SEC finally passed the Bitcoin futures ETF; Bitcoin became a legal tender in El Salvador; Coinbase and other compliant crypto companies went public; NFT continued to break the circle and penetrate the big entertainment field. We have to believe that all of this is writing the preface for Web 3.0.

Do you remember how many major events and milestones have occurred in the crypto world during this magical year? Which trends have you accurately grasped, and what opportunities have you missed?

In this long article, Odaily Planet Daily will work with you to record the most exciting 2021, and try to find some development context of 2022.

1. Encrypted market value has repeatedly hit new highs, and the top ten rankings have frequently changed

In 2021, the market value of cryptocurrencies has repeatedly hit new highs.

At the beginning of the year, the total market value of cryptocurrencies was only 779.5 billion U.S. dollars. In January and May, they crossed the 1 trillion U.S. dollar and 2 trillion U.S. dollars mark successively, and reached a record of 3 trillion U.S. dollars on November 10 this year; as of this year; On December 22, the total market value of crypto was provisionally reported to be 2415.9 billion U.S. dollars, an increase of 175% from the beginning of the year.

At the same time, Bitcoin’s dominance in the crypto market has been weakened . Its market value has continued to decline from 70.66% at the beginning of the year to 38.8%. This is the first time since mid-2018 that Bitcoin’s market value has fallen below 50%.

The main reason behind this is that under the overall development and growth of the encryption ecosystem, more emerging projects have emerged, and various ecological sectors have blossomed. It is worth noting that the share of Ethereum’s market value has risen sharply this year , from 11% at the beginning of the year to the current 21%.

In terms of prices, mainstream assets such as Bitcoin and Ethereum broke new highs this year . Bitcoin rose to 69,000 U.S. dollars (November 10), the current price is about 49,000 U.S. dollars, an increase of nearly 70% from the beginning of the year; Ethereum rose to 4,860 U.S. dollars (November 10), currently temporarily reported at 4,050 U.S. dollars, compared with the beginning of the year price Increased 450%.

In 2021, the total transaction volume of Bitcoin and Ethereum reached a record US$7.5 trillion , an increase of 435% over the previous year.

Let’s look at stablecoins. The stablecoin market continues to grow in 2021. The supply of US dollar stablecoins has soared by 388%, from 29 billion US dollars at the beginning of the year to more than 140 billion US dollars. The usage of stablecoins also hit a record high. In 2021, the adjusted annual trading volume of stablecoins exceeded US$5 trillion, a year-on-year increase of more than 370% compared with the trading volume in 2020.

The growth of stable coins is mainly due to the following reasons: First, as stable coins are used as market hedging tools and payment intermediaries, they naturally grow with the market size; second, under the development of DeFi, people use stable coins for lossless mining; third, The derivatives market usually uses stablecoins as the settlement unit.

In terms of market size, the current “leading” of the stablecoin market is still USDT, but its share of the stablecoin market has dropped from 68% at the beginning of the year to 57%; at the same time, the market share of USDC and BUSD is Significant increase, USDC’s issuance volume exceeded 42 billion U.S. dollars on December 20, setting a new record high.

The stablecoin market is ushering in more supervision and review. For non-compliant stablecoins, the future may further lose room for survival.

The top ten currencies in the crypto market by market value have also undergone earth-shaking changes this year. The rankings of the former bifurcated coins (BCH, BSV) continued to fall; EOS and other husband chains were sluggish and their rankings were impacted; XRP, which had not moved for a long time, staged a roller coaster-like trend; even the leading DeFi projects LINK and UNI, which were popular last year , Was also squeezed out of the top ten.

The MEME tokens headed by DOGE and SHIB, under Musk’s kind “call”, the market value once ranked among the top ten or even the top five; especially SHIB, which has risen by a maximum of 1.25 million times in the past year, is well-deserved “Annual wealth creation myth.”

The strongest “nail households” BNB has always been in the top ten. There are two main reasons: first, the BSC ecosystem broke out at the beginning of the year, and found stronger value support and more application scenarios for it; second, Binance is in the “long bull” The trading volume surged, and the price of BNB once rose close to US$700. It is currently tentatively reported to US$535, with a rise of 1350% during the year.

In addition, smart contract platform ecosystems other than Ethereum Layer 1 such as Solana, Polygon, Terra, Avalanche, Cardano, etc. have gradually emerged, occupying seats in the top ten lists.

What’s interesting is that Polkadot, which has been in the top ten most of the time this year, was squeezed out at the end of the year; the previously watched parachain slot auction did not meet market expectations in the short term, and the price of DOT was in a state of volatility and decline.

2. Over 1,500 investment and financing, VC started a paradigm shift

Behind the prosperous secondary market is an even crazier primary market.

The VCs who survived the long bear market made a lot of money in this raging bull market, and then they turned their profits into “bullets” and “crazy sweeping” on major circuits.

According to incomplete statistics from Odaily Planet Daily, as of December 19, the crypto industry publicly disclosed 1,529 primary market financings in 2021, an increase of 252.3% year-on-year, and the total disclosed amount was approximately US$32.6 billion, an increase of 814.2% year-on-year. 

In the surging market of hot money, the valuation of top projects has been continuously raised, and the industry’s highest record of single financing has been broken many times. According to the specific track division, the projects with the largest single investment amount in each vertical field are as follows:

  • In the CeFi field, NYDIG completed a $1 billion round of financing led by WestCap, which is also the largest single financing in the history of cryptocurrency.
  • In the field of centralized exchanges, FTX received US$900 million in B round of financing, and has since received US$420 million in capital in additional B-1 rounds of financing.
  • In the field of stablecoin services, USDC development company Circle completed a $440 million financing and began to seek an IPO in the form of SPAC.
  • In the mining sector, Blockstream completed a US$210 million financing led by Baillie Gifford and iFinex. The new part of the funds will be used to explore clean energy mining methods such as solar energy.
  • In the wallet field, the veteran hardware wallet Ledger completed a financing of US$380 million, with a valuation of US$1.5 billion.
  • In the field of public chains, Solana received US$314 million in financing and became the most eye-catching emerging public chain in the year.
  • In the Layer2 field, Arbitrum developer OffchainLabs completed a US$120 million Series B financing with a valuation of US$1.2 billion, and its mainnet was officially launched in the second half of the year.
  • In the field of DeFi agreements, BitDAO has overwhelmed many leading projects and completed a $230 million financing jointly led by Peter Thiel, Founders Fund, Pantera Capital and Dragonfly Capital.
  • The top brand in the NFT field belongs to Dapper Labs. In the two rounds of financing, Dapper Labs has successively received investments of US$305 million and US$250 million, for a total of US$555 million.
  • In the game field, the platform-based project Forte completed a US$725 million financing led by Sea Capital and Kora Management, which surpassed the football game Sorare, which received a US$680 million investment.
  • In the social field, DeSo is the most eye-catching dark horse. This Layer1 public chain created for social needs received an investment of US$200 million as soon as it was born in the second half of the year.
  • The value of the cross-chain field began to rise at the end of the year. Anyswap also completed $60 million in financing when the brand was upgraded to Multichain. Sequoia China can be seen in the investment list.

In addition to these relatively mainstream tracks, security, data analysis, on-chain monitoring, communication networks, tax services, freelance markets and even various development infrastructure projects have also seen huge financing projects.

Judging from the general trend of track rotation, NFT will gradually complete its counterattack to the DeFi king status in 2021.

From the slight weakness at the beginning of the year, to the court resistance in the middle of the year, and then to the mass rolling at the end of the year, NFT has become the hottest theme in the primary market in the second half of the year, and it has also driven games, collections, transactions, lending, and fragmentation. The rise of related derivative directions such as, display terminals.

2021 is a year of institutional reshuffle. Some veteran institutions fell on the tail of the bear market, and some fresh faces were born in the bull market, and some of the top institutions that have crossed the bulls and bears have gradually played their own “golden signs.” With continuous large-scale shots and high-density coverage of the leading players in various tracks, a16z has become the most powerful investment institution in the cryptocurrency industry in 2021. Its third fund, Crypto Fund III, has raised funds of up to 2.2 billion US dollars. ; Research-driven VCs such as Paradigm and Multicoin Capital are not much better. They continue to output insights to the industry while they continue to work in their respective areas of expertise; relying on the strong background of the head exchange to support Binance Labs, Coinbase Ventures, Alameda Research, etc. The performance is equally eye-catching.

Whether they can gain the favor of these institutions has become an important indicator for many ordinary investors to judge the quality of the project.

In 2021, we will also see more and more traditional VCs begin to deploy the encryption market .

The most worth mentioning VC is of course Sequoia. Following the high-frequency deployment of public chains, exchanges, Layer2, and NFT tracks, a “DAO one-day tour” was also played on the Twitter profile at the end of the year.

However, when the VC is infinitely prosperous, an anti-VC wave has quietly appeared in the industry, and there are more and more critical voices about “VC monopolizing early investment”.

As people’s discussions on DAO and Web 3.0 are getting deeper and deeper, some cognitions that have been formed in the traditional world, such as project fund raising methods, investor exit methods, and the relationship between investors and entrepreneurs, are also in the encrypted world. Changes are happening quietly. Venture capital may never disappear, but its paradigm may need to be changed in the Web 3.0 era.

Three, 2021 memorabilia

After an overview of the primary and secondary markets, we will review the most memorable events and achievements of this year by sector/track.

Bitcoin ETF finally landed, mining industry ushered in a great migration

No matter how encrypted finance evolves, Bitcoin, as the cornerstone and vane of the market, will always be the focus.

In the beginning of 2021, Bitcoin continued its upward trend. It continued to climb from the beginning of the year at 29,000 U.S. dollars, and successively broke through the 30,000, 40,000, 50,000, and 60,000 U.S. dollars, and finally set a new value of 65,000 U.S. dollars (April 14) in the first half of the year. Record: Entering May, with the tightening of policies and the exit of market profits, Bitcoin ushered in a sharp correction. On May 19, Bitcoin fell to a minimum of US$30,000.

In the following two months, Bitcoin has been consolidating around US$30,000, and began to rebound in August, starting to ” slow bull “, and finally set a historical record of US$69,020 on November 10th-which also brought its market value to 1.3. Trillions of dollars , surpassing Meta and Tencent, and squeezed into the world’s top five “company market value”. At present, the price of Bitcoin is temporarily reported at US$49,000, an increase of nearly 70% from the beginning of the year.

To 2021: The Golden Age of the Crypto World

Since the beginning of this year, the price of Bitcoin has always been above US$30,000, which has also made many people full of confidence in the market outlook. Optimists believe that Bitcoin will exceed $100,000 in 2022.

As the price of Bitcoin has risen, mainstream institutions have also paid more attention to it. Some listed companies have also begun to accept Bitcoin as a payment or use it as an asset reserve.

In February, Tesla submitted a report to the U.S. SEC that the company planned to purchase $1.5 billion worth of bitcoin; in March, Tesla’s official website announced that it supported bitcoin payments; but in May, Tesla founder Musk Twitter announced the suspension of accepting plans to use Bitcoin to pay for their cars on the grounds of “not environmentally friendly”.

Musk, who has repeated attitudes and has real market influence, has also made many crypto investors “love and hate” him.

Another representative of a listed company that continues to increase positions in Bitcoin is MicroStrategy, which has launched a “crazy buying, buying and buying” model. In addition, the global payment platform Visa has opened cryptocurrency payments; the asset management company Grayscale published a Bitcoin Trust Fund (GBTC) advertisement in the “New York Times” newspaper to promote Bitcoin…The running entry of institutions successfully boosted Bitcoin The value recognition of the currency has increased.

In addition to institutional purchases, the legalization of Bitcoin in some regions has also become a major benefit for its fundamentals.

In June, El Salvador’s President Nayib Bukele submitted a draft bill to the country’s legislature requiring Bitcoin to become the country’s legal tender; on September 7, the bill came into effect and Bitcoin eventually became legal tender. Although this plan has caused controversy at home and abroad, it is of great significance to the development of the entire encrypted finance. Bitcoin has entered social life as a legal identity for the first time. El Salvador has also set up a sample, and more Latin American countries are trying to follow suit and legalize Bitcoin.

To 2021: The Golden Age of the Crypto World

(Bitcoin Legalization Act)

In terms of structured products, ETFs (Exchange Traded Funds), which the crypto market has been waiting for, will finally be implemented in 2021. In October of this year, the first Bitcoin futures ProShares Bitcoin Strategy ETF officially came out, landing on the NYSE Arca exchange, and then the SEC successively approved a number of futures ETFs.

Although from the perspective of price feedback, the impact of ETFs on the crypto market has not met expectations. But anyway, with the emergence of such compliant products, the confidence of traditional institutional investors and ordinary users in encryption will continue to increase.

Technically, this year Bitcoin ushered in an important soft fork to upgrade Taproot , and over 90% of the miners agreed. This upgrade contains three items: Schnorr signature (BIP 340), Taproot (BIP 341) and TapScript (BIP 342). The upgrade ultimately reduced the Bitcoin network transaction fees and improved the anonymity and efficiency of transactions.

In addition, the number of Bitcoin non-zero addresses exceeded 40 million by the end of the year, a record high.

For miners who are important participants in the Bitcoin ecosystem, 2021 is a year of migration.

In May of this year, the Financial Stability and Development Committee of the State Council proposed at the meeting to “combine Bitcoin mining and trading”, setting off a new wave of supervision; Xinjiang, Qinghai, Inner Mongolia and other provinces and cities across the country have successively issued bans on virtual currencies. Mining was rectified and cleaned up, and a large number of mines were shut down or went to sea. In the end, some miners found new mines in Kazakhstan, Texas and other places, and continued to work on mining.

Affected by mining machines, Bitcoin’s computing power is also changing drastically. In April of this year, the computing power reached its peak, but it dropped by nearly 50% between May and July. Since the beginning of the year, Bitcoin computing power has increased by nearly 20%.  

To 2021: The Golden Age of the Crypto World

Meme: It started as a joke, and it started in the community

If you bought 100 USD BTC at the beginning of the year, it will be worth 167.4 USD now; if you bought SHIB, guess how much is it worth now? The answer is 62 million U.S. dollars. This is the ultimate manifestation of the wealth effect of Meme currency.

A new sector was born in the crypto market this year: Meme coin. Representative projects include various animal coins such as Doge and SHIB. Meme culture can be commonly understood as “playing stalks”, and any item with the attribute of “jangzi” can be called Meme currency.

The rise of Meme culture originated from a major event in the traditional financial market at the beginning of this year-the GME defense war. In a nutshell, Wall Street retail investors joined forces to buy shares of GME on Robinhood, which led to short-selling institutions and incurred losses, which once reversed the status of retail investors and institutions.

The anti-traditional and anti-Wall Street movement sang in the mainstream society. This trend of thought spread to the crypto market and was shaped into a more rebellious Meme culture. The market prospects, business models, technical advantages, and product highlights that investors once valued have become fun marketing and consensus cohesion in the Meme era.

The “chief magnification officer” of Meme coin is Musk, who posts on Twitter every once in a while, “spitting out” Dogecoin and “reversely attracting” many outsiders. Even in the eyes of many overseas “leeks”, Dogecoin is the real Bitcoin. With Musk’s “calling orders” time and time again , Dogecoin’s market value squeezed into the top ten, surpassing the leading DEX project Uniswap, with the highest increase of more than 100 times during the year , and triggered a carnival on overseas social media, forming a positive price and volume. To cycle.

At the same time, the Meme currency represented by DOGE has gradually become a part of the multicultural crypto community. From March to May, various altcoins such as Akita Inu (AKITA), Pig Coin (PIG), Dog Coin (DOG), Loser Coin (LowB) and so on were born in batches; although they achieved amazing gains in a short period of time, they also Soon they fell into disrepair or returned to zero directly.

In the end, only Dogecoin’s “Imitation Disk” Shiba Inu (SHIB) really survived and “bigger and stronger” . SHIB continued to rise steadily in the second half of the year, and finally hit a record high of US$0.00008845 in October; compared to the beginning of the year, SHIB rose by more than 1.25 million times. The important reason for the rise of SHIB is also inseparable from Musk’s many “joking reviews” and the successive launch of many mainstream platforms such as Coinbase.

The rise of SHIB led to a cultural revival of Meme and inspired representatives of emerging Meme coins such as GM (Good Morning) and People.

Among them, GM’s market value rose from zero to 200 million U.S. dollars (up to 400 million U.S. dollars, and currently remains at 100 million U.S. dollars) within just 3 days of its release. People coin, in the name of DAO, crowdfunded bidding for a copy of the U.S. Constitution, and was converted to Meme coin after the bid was lost. The price once soared more than 50 times.

In general, Meme culture is now fully integrated into the crypto community, and with sub-cultural consensus, it has a strong communication influence. However, we should also clearly realize that marketing and FOMO alone are not enough to promote the maturity and development of encrypted finance. Technology and products are the primary productive forces of change. As a result, Meme coins can be a “condiment” blindly, but it is difficult to become a “main dish”.

Continuously evolving DeFi

Compared with the ups and downs of the Meme coin, the DeFi sector is slightly deserted, but if you look at DeFi’s annual performance from a higher perspective and more dimensions, it is not difficult to find that the evolution of DeFi has never stopped.

At the macro data level, DeFi has always maintained a positive growth trend.

According to DeFi Pulse data, as of December 21, the total value of assets (TVL) locked in major ecological DeFi agreements has reached US$2.432 billion. Looking closely at the change curve of TVL, the “519” level black swan event is only a small twist in the upward trend.

To 2021: The Golden Age of the Crypto World

Dune Analytics data shows that towards the end of the year, the number of independent addresses that have interacted with DeFi protocols exceeded the 4 million mark for the first time, and a lot of fresh blood is constantly pouring in. 

At the individual project level, most of the “blue chip” DeFi has completed its own major iterations in 2021

Uniswap v3 brings a new possibility of “active market making” for AMM; Aave v3 begins the exploration of cross-chain lending; Curve v2 uses mathematical formulas to re-optimize its market making curve, which can be called a magical re-optimization, which not only resists Living in the impact of Uniswap v3 on its stable currency market, it is also relying on the multi-chain strategy to occupy the top position of the individual agreement TVL for a long time… Among the many “blue chips”, the slightly disappointing performance may be Compound and SushiSwap, the former A major contract loophole occurred, resulting in the misdistribution of tens of millions of dollars in COMP. The latter was exposed to internal conflicts. Whether its long-prepared next-generation Trident can be successfully launched is still unknown.

At the track trend level, as the market structure of basic segments such as stablecoins, lending, and DEX has become more stable, the focus of DeFi has gradually shifted.

The first is the explosion of derivatives, and I have to mention the issuance and airdrop of dYdX. As the most watched project under the concept of derivatives, the market has placed very high expectations on the value of dYdX. Coupled with the large amount of money from the project party (airdrop ratio 7.5%), most users who have interacted with dYdX have received tens of thousands. The airdrop of US dollars has also set off a new round of woolen upsurge in the market. However, from an industry perspective, even though dYdX once surpassed the sum of all other DEXs under the blessing of trading and mining strategies, such stimulus is obviously difficult to last. With the decline in daily trading volume of dYdX and the decline in currency prices , The voice of “explosion of derivatives” has gradually weakened. We firmly believe that derivatives will surely achieve a big explosion in the DeFi field like the spot, but such an explosion does not seem to be ignited by a single project.

The second trend worthy of attention is embracing traditional finance (TradFi) . The best one in this regard is to borrow the three males-MakerDAO, Aave, and Compound. The former has been actively exploring how to introduce real-world asset collateral. The two successively announced new services for traditional financial institutions Aave Pro (now renamed Aave Arc) and Compound Treasury in the summer.

At the end of the year, DeFi 2.0 narratives aimed at reconstructing liquidity relationships and optimizing capital utilization efficiency rose rapidly, and a number of emerging projects such as Olympus DAO, TokeMak, Abracadabra, etc. emerged. Although there are still major controversies regarding the naming of “DeFi 2.0”, regardless of the name, the core efforts of similar projects to make liquidity services more sustainable are worthy of recognition.

In addition to the above trends, the multi-chain layout is also a major trend in the current DeFi track (see the “cross-chain” section below for details).

Crazy fans NFT × Everything

The blockchain industry has spent ten years looking for a killer application direction that is enough to “out of the circle” . Last year’s DeFi did not fully realize this dream, and this year’s NFT is doing my part.

In 2021, the annual landmark event in the NFT field is undoubtedly: In March, the artist Beeple’s NFT work “Everydays: The First 5000 Days” was sold at Christie’s for $69.346 million, successfully attracting the attention of people in various fields such as traditional art.

To 2021: The Golden Age of the Crypto World

In December, artist Pak’s project “Merge” was put on sale on the NFT trading platform Nifty Gateway, with a final total turnover of nearly 91.81 million U.S. dollars. It became the most expensive NFT in the history of the newcomer and ranked third in the world in terms of turnover of works by living artists.

Like many young niche “FTs”, the high price of NFTs will also be questioned by hype, marketing, and bubbles, but the high price will “increase” a group of people and attract more funds (this year’s total NFT transaction volume exceeded 23 billion U.S. dollars) , traffic and entrepreneurs who promote the maturity of the industry .

This year, many technology giants (Tencent, Alipay, Mega, Microsoft, Twitter, etc.), a number of media platforms (Time Magazine, CNN, Vogue, etc.), many consumer brands and big IP parties (Nike, L’Oreal, Coca-Cola, McDonald’s, etc.) , Disney, Sony, etc.), cultural and sports stars (Jay-Z, Whitney Houston, Wong Kar-wai, Chen Xiaochun, Bailey, Curry, etc.), political and business people (Jack Dorsey, Musk, Snowden, Melanie) Ya Trump, etc.) have purchased, issued or deployed NFTs.

From the initial small-scale influence on the collection field, the NFT empowers creators’ economy, and then transforms the relationship between the fan economy and the brand market at a wider consumption level, and gradually expands the radius of radiation.

While NFT projects flourish, their infrastructure (trading market, data analysis platform and search and navigation tools, financial services such as lending/lease/spun-off/crowdfunding) is rising .

In July, Opensea, the leader in the NFT trading market with a $100 million round of B round led by a16z, has seen exponential growth in monthly turnover. The current total number of users has exceeded 750,000. In December, the market share of ETH transaction volume reached 98.2%, and its sales throughout the year The amount is at least 16 billion U.S. dollars, and the total revenue is estimated to be 400 million U.S. dollars.

The total transaction volume of Art Blocks, the NFT generative art platform, broke through 1.1 billion U.S. dollars, and its current market value is nearly 130 million U.S. dollars.

This year, the art auction house Sotheby’s, which has undertaken auctions of Pak NFT works, World Wide Web source code NFT, CryptoPunks, BAYC, etc., earned $100 million from NFT sales.

Finally, we want to mention a sub-area separately-NFT crowdfunding DAO. In August, CryptoPunk #173 was sold through community crowdfunding for 99.9 ETH, and People’s Punk issued the token DDDD afterwards. PleasrDAO, the originator of crowdfunding to buy NFT gameplay, has included 11 NFT works this year, including Uniswap V3 official announcement video clip NFT, Snowden’s first NFT, Dogecoin original photo NFT, Wu-Tang Clan’s original album Once Upon “A Time In Shaolin” etc.

This type of NFTFi × DAO innovative product often splits rights in the form of bundling or pooling, and funded in practice, which indeed lowers the entry threshold of some high-priced NFTs and improves their liquidity, but it also corresponds to custody and display New risks such as unclear rights, difficulties in exiting or reselling, and imperfect buyout mechanisms.

Chain games and GameFi make great strides forward

In 2021, NFT also consolidated its position in the gaming industry.

Let’s take a look at the chain games in the circle first: Dapper Labs’ explosive collection NFT game, NBA Top Shot, has annual sales of more than 750 million U.S. dollars and more than 11.41 million transactions; Axie Infinity, the Southeast Asian chain game leading the “Play to Earn” trend Sales exceeded 3.8 billion U.S. dollars and nearly 2.8 million daily active players. The most expensive “Axie” sold for 820,000 U.S. dollars; it was originally just a niche avatar IP, but it derives many PFP (personal profile pictures) NFTs for gameplay. Representatives of CryptoPunks On December 19, the market value was approximately US$2.64 billion, and the floor price exceeded US$240,000.

This year, there are still many NFT projects that have received sufficient attention and have repeatedly set sales records: the BAYC series of “children and grandchildren”, the card game Parallel Alpha, the TXT text version of NFT with randomly generated equipment names on behalf of Loot…

To 2021: The Golden Age of the Crypto World

Let’s look at the addition of traditional games to NFT: Ubisoft will launch the NFT platform; NetEase’s game “Forever Tribulation” IP authorized to issue NFT blind boxes; Epic Games’ digital game platform Epic Games Store will provide blockchain and NFT games open…�?/font>

This year, chain games surpassed the positioning of traditional games of “leisure, entertainment, and competition”, added financial, collection and display attributes, and broadened people’s definition and cognition of games .

In addition, under Axie Infinity’s powerful “play-to-earn effect”, game guilds represented by YGG etc. have also derived scholarship (scholarship), game asset leasing, investment incubation, etc. based on the main business of “making gold” Line of business and sparked a financing boom in Q4.

Standing in the “First Year of Metaverse” and looking into the distance

Putting the Metaverse into the year-end inventory is considered a hot spot for many vertical fields, but who makes the Metaverse still a pan-concept in a fuzzy concept, technological integration, and continuous evolution.

The combination of Metaverse and Crypto mainly falls on the lower economic system and production relations. Specifically, quite a few people in the industry believe that all assets (identity, data, props, currency, transactions, etc.) in the metaverse should be tokenized (or at least based on a distributed system) and generated in a decentralized manner. Circulation and destruction.

Currently, the three virtual land platforms closest to this “imaginary paradigm” in the circle, The Sandbox, Decentraland and Cryptovoxels, are all experiencing explosive growth this year.

The Sandbox currently has a market value of over 200 million U.S. dollars, with more than 630,000 NFTs and approximately 34,000 holders. Republic Realm purchased the The Sandbox land at 4.3 million U.S. dollars in early December, setting a historical record for the sale of virtual land. This year, rappers Snoop Dogg, Nipsey Hussle, NFT collector Cozomo de’ Medici and others entered The Sandbox.

The publicly-identified buyers include Hong Kong real estate giant New World Development Group CEO Zheng Zhigang, singer Lin Junjie (also bought the Decentraland plot), Yuchi co-founder Wang Chun (to build a Dogecoin enthusiast headquarters) and so on. The Sandbox has also established cooperation with the cartoon character IP “McDull” and Adidas Originals, and received a US$93 million financing led by SoftBank’s Vision Fund 2.

To 2021: The Golden Age of the Crypto World

The current market value of Decentraland is approximately US$74.87 million, with more than 160,000 NFTs. The top of the land transaction list was Fashion Street Estate, which was valued at US$2.42 million (618,000 MANA) at that time. This year, Decentraland hosted the Metaverse Music Festival with 80 groups of artists (virtual avatars), RacingTime’s virtual car show, Boson Protocol’s virtual mall, and Sotheby’s virtual gallery.

The current market value of Cryptovoxels is about 26.9 million U.S. dollars, with nearly 400,000 NFTs. This year, Cryptovoxels began to support Facebook (now Meta) account login, launched Scarcity Island, a virtual land with autonomous voting scenarios, and discussed internally or launched the details of the native Token CV in April next year. MetaEstate, a real estate developer of Metaverse, also designed and built the TRON ecological building complex on Cryptovoxels.

In the last week of November, the total weekly sales of the four Metaverse virtual lands, The Sandbox, Decentraland, CryptoVoxels, and Somnium Space, exceeded 100 million U.S. dollars.

Behind these “big three”, more emerging platforms inside and outside the circle are eager to try, setting off a wave of “land buying frenzy”. At the same time, various “water providers” such as virtual real estate developers/contractors, small prop producers in Metaverse, and service providers who rely on AR/MR to enhance the visual effects of NFT have also followed, bringing more cross-domain complexes to the encrypted world Talents and out-of-circle traffic.

In general, it is not an exaggeration to call 2021 the “first year of the universe”.

Web 3.0: Victory is not far away

For the next narrative of encryption-Web 3.0, the industry’s highest consensus definition is “readable, writable, and ownable (read, write, own) proposed by a16z partner Chris Dixon .

To 2021: The Golden Age of the Crypto World

On December 8, the U.S. House Committee on Financial Services held a hearing on Capitol Hill on “The Future of Digital Assets and Finance: Understanding the Challenges and Benefits of American Financial Innovation”. 

At the meeting, Bitfury CEO Brian P. Brooks also quoted Chris’ theory when answering Congressman Patrick McHenry’s question about Web 3.0. Brooks explained that in Web 1.0, users only have specific reading, so this is the “only readable Internet”; in Web 2.0, in addition to reading content, users can also publish content by themselves, but these content does not belong to the user All, so it’s just the “writeable Internet”; and in Web 3.0, in addition to reading and publishing content, users will truly have all the rights and interests of the content, realizing the real “readable, writable, and ownable” the Internet”.

After the meeting, Brooks’s edited video of this answer was forwarded and spread by industry insiders, helping those who are still confused to strengthen their faith in their hearts like a booster.

In 2021, we have seen the irreversible development of the Web 3.0 trend, various infrastructures have become more mature, and upper-layer applications have begun to gradually spread . MetaMask, the preferred portal for the decentralized world, has achieved a blowout of business volume. After its developer ConsenSys completed a financing of US$200 million, its valuation has risen to US$3 billion (although this does not seem to be very Web 3.0); Arweave, as a permanent decentralized content storage layer, also completed value discovery in the second half of the year; the popularity of ENS after the issuance of coins and airdrops continued to be online, which also triggered in-depth discussions on the imagination of domain names in the market; Mirror has become everyone’s reading One of the regular channels for high-quality content in the industry…

While the encryption industry is firm on the prospects of Web 3.0, some representatives of the traditional Internet have expressed different views on this emerging concept. Musk is suspicious, and Jack Dorsey has a heated discussion on “Who does Web 3.0 belong to?” and a16z. , The words are not speculative, and even play the check and block black.

Perhaps we should re-read this Chris’ famous saying: at first they ignored you, then they laughed at you, then they would criticize you (where we are), and then the day of your victory.

Ethereum defends the king of public chain

Although the new ecological public chain has risen successively this year, the status of the “king of the public chain” of Ethereum is still unshakable.

According to the data, the price of ETH at the beginning of the year of 750 US dollars rose to a maximum of 4860 US dollars (November 10), the current provisional report of 4,050 US dollars, an increase of 450% from the beginning of the year; the market value of Ethereum also increased from 11% at the beginning of the year to the current 21 %, an increase of 10%; in addition, the value of the DeFi lock-up on Ethereum has also risen from 18.6 billion US dollars at the beginning of the year to 167.5 billion US dollars, an increase of 800%.

However, due to the tightening of domestic policies, the Ethereum mining industry suffered a blow in June of this year, and its computing power fell by more than 30%. However, in only two months, Ethereum’s computing power returned to its previous level and has since continued to hit new highs; The computing power is temporarily reported at 947 TH/s, an increase of 223% from the beginning of the year.

With regard to Gas, this year, affected by NFT mint (casting) and airdropping volume, the cost of Gas has always remained high , increasing the cost of interaction between ordinary users and project developers, and forcing some projects to switch to expansion solutions such as Layer 2 and other public chains. Ecology.

In order to reduce Gas, the Ethereum community put forward the EIP-1559 proposal, trying to change the basic fee setting to make it easier for users to pay more reasonable fees.

The proposal has been controversial since it was put forward. Among them, the group of miners whose income is directly affected is the most opposed, and many miners feel that they have become ecological abandoned children. To this end, Twitter netizen @Red Panda Mining launched a campaign to call on miners who opposed EIP-1559 to switch their computing power to the opposition mining pool and pledge their sovereignty; although the action ended in failure-the opposition’s computing power accounted for Less than 20%, but still let the entire crypto market hear the voice of miners.

The controversy did not shake the determination of the developers. EIP-1559 was implemented in the “London Upgrade” in August, and the final effect is obvious to all. Since the implementation of EIP-1559, a total of 1.243 million ETH (approximately US$5 billion) has been burned, opening a new era of Ethereum “deflation”.

In addition to the “London Upgrade”, Ethereum has also completed two upgrades this year: the Berlin hard fork upgrade in April and the “Arrow Glacier” upgrade in December. The main content of the latter is to postpone the difficulty bomb until June next year. .

In addition to Ethereum 1.0, Ethereum 2.0 has also attracted much attention this year . As of the first anniversary of the launch of the Ethereum beacon chain (December 3), the Ethereum 2.0 deposit contract address has received 8.502 million ETH, accounting for 7.24% of the ETH supply, and there are more than 264,200 verification nodes on the beacon chain. The number of addresses participating in ETH2.0 pledge reached 56,393.

According to the latest plan, the merger of Ethereum 1.0 and 2.0 will be carried out around the second quarter of 2022; after the merger is completed, the ETH locked in the staking contract will remain locked and cannot be transferred. Although Ethereum has repeatedly bounced tickets, as the king of the public chain, it has never stopped moving forward.

This year, Ethereum has a deeper connection with traditional finance . In April, Canadian regulators approved three Ethereum exchange-traded funds (ETFs); in the third quarter, US SEC documents revealed that the holdings of institutional Ethereum products (mainly gray-scale Ethereum trusts) increased by 19%; December , CME Group (CME) announced the launch of micro-Ethereum futures. Although the US financial market has not yet officially launched the Ethereum ETF, we believe that this day will not be too far.

The outbreak of the new ecology of the public chain and Layer 2

2021 is a year of collective explosion of new ecology.

The explosion of the application layer has brought infinite glory to Ethereum Layer 1, but it has also caused continuous congestion of on-chain transactions and high gas costs. Affected by this, the value of the Ethereum ecosystem has begun to overflow, and projects, users, and funds are all looking for faster and cheaper new development soil, which has also become an opportunity for new ecosystems to break out.

In terms of public chains, from BSC to Solana, to Avalanche, Fantom, and Terra, the major ecosystems are booming, the infrastructure is gradually mature, and a variety of applications are blooming, and the value of the secondary market has been achieved while the lock-up funds have repeatedly reached new heights. enlarge.

As the earliest emerging new public chain ecology, BSC has entered a relatively calm and steady growth period after experiencing an early stage of rapid outbreak. From the data point of view, the total value of BSC’s on-chain TVL has long ranked first in the emerging ecology (excluding Ethereum), and it was not surpassed by the dark horse Terra until the end of the year.

With its outstanding performance advantages and the strong support of SBF, Solana has become the most outstanding emerging public chain for most of the year. Towards the end of the year, Solana has begun another big move-to support Neon Labs to build an EVM development environment for the chain, which may be another engine for Solana to continue to grow.

The outbreak paths of Avalanche and Fantom have a certain similarity. After using the cross-chain bridge to open up the channels for capital in and out, the two emerging public chains have launched a multi-billion-level liquidity incentive plan in Polygon to attract projects (especially leading companies). DeFi) and the entry of users. In hindsight, the strategies of Avalanche and Fantom were successful, and “bridge building + money” has also become a classic strategy for the outbreak of the public chain, which has been imitated by some new public chains that started later.

Near the end of the year, Terra (LUNA) seems to be “rushing for performance” and generally rushing forward. Not only did it reach the top of the TVL rankings, but it also ranked in the top ten in the total market value of cryptocurrencies. The market value of the stable currency UST surpassed DAI at the end of the year.

In other ecological aspects, Polkadot and Kusama finally launched the long-awaited parachain slot auction by the community; DFINITY also officially launched the mainnet this year; Algorand is actively exploring how to combine TradFi and DeFi; Flow, DeSo and other vertical application public chains Rise; teams such as Near, Tron, and Conflux have followed up on hot spots such as DeFi and NFT, and performed well in characteristic IP market strategies. A public chain worth mentioning is the “heartbreaking” EOS. After expelling B1 and rebranding, the husband chain that has been “declared to death” has also given some new vitality. 

Of course, facing many public chain ecological challenges, the Ethereum ecosystem has not stopped. Layer 2 is the strongest response given by Ethereum this year. The four major Rollup expansion plans (Optimism, Arbitrum, zkSync, Starkware) are all taking this year. When it comes to tens of millions of dollars or even hundreds of millions of dollars in financing, Polygon is rumored to receive 50 million to 150 million US dollars of financial support from Sequoia India.

As the first emerging ecology to implement the “money-spending” strategy, Polygon (MATIC) can almost be said to be the most eye-catching project in the cryptocurrency market in the first half of the year. Even in “519”, the price of MATIC once turned positive. However, because Polygon currently mainly uses a side chain solution, it has also been questioned by the Ethereum community whether it is an orthodox Layer 2. However, with the successive acquisition of two ZK Rollup development teams Hermez and Mir, these disputes have gradually subsided.

Optimistic Rollup duo Optimism and Arbitrum both went live on the main net this year. As a Layer 2 solution that is more in line with the upper-level awareness of the Ethereum community, Optimism and Arbitrum have successively ushered in the entry of Uniswap, the number one leader in DeFi. However, perhaps because the gas price is still relatively high relative to emerging public chains, the ecological expansion of these two Layer 2 networks (especially Optimism) has not been as smooth as the community expected.

Two projects focusing on ZK Rollup, zkSync and Starkware, are also active this year. The development of the zkRollup version of the former has achieved phased results, and the latter proposed the Layer 3 concept at the end of the year. It is planned to achieve multi-party level through recursive proof. Expansion effect.

With the end of 2021, the multi-chain coexistence pattern is becoming stronger day by day, and the dominance of one family may never appear again.

Cross-chain: The most clear outlet at the moment

The inevitable result of the collective outbreak of the new ecology is the expansion of cross-chain demand. In order to chase the wealth opportunities that continue to emerge in the new ecology, the cross-chain demand for assets of users is also rapidly increasing.

With many advantages such as wider coverage and more flexible docking, cross-chain bridges have surpassed centralized service providers and become the main channel for cross-chain flow of carrying funds.

At present, there are no fewer than dozens of cross-chain bridge projects on the market. Apart from Avalanche Bridge, Optimism Gateway, etc., they are built by the original underlying development team, and most of them only serve a specific ecological “official cross-chain bridge”. It is worthwhile The third-party cross-chain bridges of interest include Multichain (formerly Anyswap), cBridge, Hop Protocol, and so on.

The track leader Multichain recently announced the completion of a new round of financing of 60 million US dollars. You can see Binance, Sequoia China, IDG Capital, Three Arrows Capital and many other top institutions in the list of capitalists. Whether this can be the beginning of a journey to discover the value of cross-chain services, let us wait and see.

From the evolution of the track, we will continue to focus on the following small directions.

One is for the aggregation of cross-chain bridges. The current rapid growth in the number of cross-chain bridges is just like the increase in the number of DEX a year ago. So why not make a 1inch version of the cross-chain bridge to help users find the most ideal cross-chain path? ? In fact, many projects have started attempts in this area, including ChainSwap, which has just completed the protocol upgrade, and FundMovr, which has amazing product performance.

The second is to embed other financial services in addition to bridging services , such as FibSwap DEx, Li.Finance, XY Finance, and the cross-chain + transactions being explored by Symbiosis Finance, as well as the cross-chain + lending mentioned by the leading DeFi protocol Aave in the V3 version plan.

The third is to go beyond pure asset cross-chain to a higher level of information cross-chain , through the realization of cross-bottom contract verification and invocation, to open up the interoperability between different ecosystems.

Centralized trading platform listed in compliance

As a traffic entrance and value gathering center, a centralized trading platform (CEX) plays an indispensable role in the encrypted financial ecosystem.

The top compliance trading platform has successfully struck the bell this year, and the leading crypto companies have been listed one after another.

In February, Coinbase, the largest compliant crypto trading platform in the United States, submitted an S-1 registration form to the U.S. SEC and listed directly on the Nasdaq under the stock code COIN. Coinbase is also known as the “first share of crypto exchanges.”

On July 29th, Robinhood, a brokerage platform that focuses on US retail investors, was officially listed on the Nasdaq Stock Exchange; since it was the first to open a Dogecoin trading channel in the Meme wave at the beginning of this year, it has attracted much attention from the crypto market.

On October 19, Bakkt, once known as the “bull market light”, officially listed on the New York Stock Exchange with the stock code BKKT.

According to foreign media reports, Binance founder and CEO Changpeng Zhao said in a recent interview that its US subsidiary (Binance US) may conduct an initial public offering (IPO) within the next three years.

The listing of a compliant crypto trading platform means that the traditional market’s affirmation of crypto finance is equivalent to the SEC opening a door to the entire industry and boosting the crypto world; in the future, as the heat increases, more Funds will enter through these platforms and act on the entire crypto market. For traditional finance, crypto exchanges are one of the few sustainable profitable businesses outside of mining, and they are well-deserved blue-chip stocks.

Traditional finance’s preference for encrypted finance is also feedback on the primary market financing of encrypted exchanges. In July of this year, the FTX Exchange announced the completion of a US$900 million Series B financing, with a post-investment valuation of US$18 billion. Investors include more than 60 companies including Sequoia Capital, SoftBank, Thoma Bravo, Ribbit Capital, and Circle; 3 times have passed. In September, the FTX exchange raised another US$420 million in a B-1 round of financing with a valuation of US$25 billion (a valuation increase of nearly 39%). 69 investors including BlackRock and Tiger Global participated in the investment.

It is worth mentioning that FTX also sponsored a number of international events and teams this year, including: League of Legends Championship Series (LCS), Mercedes-AMG Petronas F1 Team, Major League Baseball, NBA Golden State Warriors With the Miami Heat, International Cricket Council, Super Bowl, TSM E-sports club, etc., continue to broaden the boundaries of the crypto circle.

In late November, the media reported that Zhao Changpeng was worth US$90 billion, making him the richest man in China and among the top ten richest people in the world. Subsequently, the news of “the Chinese’s richest man changing hands” dominated the headlines of major news platforms and attracted attention. Changpeng Zhao later proactively claimed that “a valuation without liquidity is of little significance.”

4. The encryption industry moves towards compliance and embraces supervision

In the past year, with the diversified development of the crypto world, global policies have tightened and supervision has become stricter.

China clears out the digital asset mining and trading industry

As early as 2017, the seven ministries and commissions jointly issued the “Nineteen Fourth Notice” prohibiting the operation and trading of cryptocurrencies in China, but there were no clear restrictions on cryptocurrency mining. This year, my country has banned the existence of encrypted mining in the country.

On May 21, the Financial Committee of the State Council proposed to “combine Bitcoin mining and trading activities” at the meeting. Since then, Xinjiang, Qinghai, Inner Mongolia, Yunnan, and Sichuan have introduced relevant policies to rectify and clean up virtual currency mining.

On September 24, ten ministries and commissions including the People’s Bank of China jointly issued the “Notice on Further Preventing and Disposing of the Risks of Virtual Currency Trading Speculation”, clearly emphasizing that the business of legal currency exchange for virtual currency, currency transactions, currency issuance and other businesses are illegal financial activities. The provision of services by virtual currency exchanges to residents of our country via the Internet is also an illegal financial activity.

Since then, many trading platforms including Binance, Huobi and OKEx announced the withdrawal of mainland Chinese users and withdrawal from the Chinese market.

U.S. penalties increase and expand encryption regulatory boundaries

In 2021, U.S. encryption regulatory events have become more frequent.

From the perspective of law enforcement, the SEC (Securities Regulatory Commission) and the CFTC (Commodity Futures Trading Commission) mentioned cryptocurrency sanctions in their press releases by a factor of 25; in terms of specific amounts, the SEC fines have increased from 41 million in 2020 The U.S. dollar increased to 562 million U.S. dollars in 2021, an increase of 13 times, while the CFTC fines increased from approximately 9 million U.S. dollars in 2020 to 716 million U.S. dollars, an increase of more than 80 times. Of course, an important reason for the growth of data is that some sanctioned targets have large fines.

Interestingly, according to media statistics, more than 70% of the SEC’s enforcement actions ended up in settlements (payment of fines), and the SEC’s most common reason is “violation of securities laws.” The SEC filed a lawsuit against Ripple last year, and it took more than a year to find no results. There is a high probability that a settlement will be reached in 2022.

In addition, this year Gary Gensler became the chairman of the SEC. His supervision of encrypted finance was relatively aggressive. Within a month, he launched investigations into companies such as Terra development company Terraform Labs and Marathon Digital. He also reiterated many times that the regulatory measures for cryptocurrencies will not be changed in the future, and relevant companies must report to the SEC and register.

In addition to the CFTC and SEC, the U.S. Office of General Inspection of Currency (OCC) also jointly launched a “crypto sprint” investigation in October this year with the Federal Reserve and the Federal Deposit Insurance Corporation to conduct a strict review of the crypto industry. In the end, it came to a conclusion that it was not friendly to the encryption industry, and it also hinted that actions might be taken later.

The US multi-sectoral voices, law enforcement, and regulatory requirements on the encryption industry are actually a struggle for administrative power in nature. The encryption industry is already an emerging industry. There is no specific division on which party should be under its jurisdiction. For US regulators, whoever has the right to speak in the crypto market can control the industry’s direction.

Currently, only the SEC has real influence and voice. The US Congress is trying to change this situation by passing the Digital Commodity Exchange Act. The bill was introduced by U.S. Congressman Michael Conaway last year to establish a federal definition of “digital commodity exchange”, put it into its own legal category, and have the CFTC supervise it.

At present, the bill has been returned to Congress as a draft, and lawmakers are actively discussing it with crypto practitioners.

In terms of US regulation this year, there is another topic that has attracted much attention: cryptocurrency taxation.

This year the U.S. Congress proposed the “Infrastructure Investment and Employment Act”, which clearly requires “brokers” to report transaction information of more than $10,000 to the U.S. Internal Revenue Service. There is a view that the bill’s definition of “broker” is “too broad and vague” and may impose these requirements on miners and wallet developers, not just cryptocurrency exchanges like Coinbase. Some crypto-friendly senators tried to fix the problem and proposed new amendments, but they were eventually rejected.

Currently, the bill has been signed by Biden and will be formally implemented in 2022.

Regulatory measures in other countries have gradually tightened. In September of this year, the relevant financial departments of South Korea strengthened the supervision of cryptocurrency exchanges. All South Korean cryptocurrency exchanges must register with the financial sector before a specific time, provide an Internet security agency’s compliance certificate, and cooperate with banks to ensure the real name of the account. Unregistered exchanges will close their services after September 24 .

This measure led to the closure of hundreds of South Korean cryptocurrency exchanges. However, as the first country to legalize cryptocurrency, the South Korean authorities stated that the original policy was to maintain the healthy and orderly development of the crypto market.

In addition, with the popularity of chain games and the establishment of a gold-making ecology, Southeast Asia has become a new blue ocean in the crypto gold market this year, and many trading platforms have gradually migrated here.

Fifth, the shadow of security: the amount of loss increased by 1000% year-on-year

At the end of 2020, we have done a special review and inventory of DeFi security incidents throughout the year. Statistics show that the total amount of funds lost in the DeFi industry due to hacking incidents throughout the year is as high as 177.4 million U.S. dollars.

In 2021, we don’t even need statistics to know that the total amount of lost funds this year is much higher than last year. In the case of Poly Network alone, hackers stole US$610 million.

On August 10, the cross-chain interoperability protocol Poly Network was suddenly attacked. Calculated based on the market price of the relevant assets at the time of the incident, this is not only the largest hacking incident in the history of DeFi, but also the entire history of cryptocurrency. The Mt.Gox incident (744,408 BTC, worth about 400 million U.S. dollars at the time), and the Coincheck case in 2018 (523 million XEM, worth about 534 million U.S. dollars at the time).

According to Rekt data, 161 hacking incidents have occurred in the DeFi field so far in 2021, with losses amounting to US$1.86 billion, an increase of nearly 1,000% year-on-year. Among them, the top ten projects in terms of amount of loss are: Poly Network (US$610 million), Vulcan Forged (US$140 million), Boy X Highspeed (US$130 million), Cream Finance (US$130 million), BadgerDAO (US$120 million) ), Venus (US$77 million), Compound (US$71.1 million), AnubisDAO (US$60 million), EasyFi (US$59 million), Uranium Finance (US$57.2 million).

From the frequency of incidents, the cross-chain track has become the focus of attention of hackers this year . In addition to Poly Network, Chainswap, Multichain (formerly Anyswap), THORChain, etc. have also encountered poisonous hands. The reason is that firstly, cross-chain services are a capital-intensive racetrack, and secondly, cross-chain services often involve interactions between multiple chains and multiple contracts, which are more complex in structure.

In addition, there have been too many huge security incidents in the CeFi field in 2021. The typical case is the theft of three exchanges. Liquid, BitMart, and AscendEX lost US$91 million, US$150 million, and US$77 million, respectively.

From the perspective of attack categories, hackers’ methods can be described as diverse, ranging from the use of logic flaws, to lightning loan attacks, transaction crowding attacks, private key cracking, and even social means to break through key information… Hackers hiding in the dark do not Will let go of any vulnerabilities that may be exploited.

The security situation is getting more and more severe. What can practitioners and users do?

From the perspective of the project party, one is that the product needs to be fully tested in advance, especially to test the pressure of the agreement under extreme conditions; the second is to seek a professional third-party audit agency to conduct a comprehensive review of the agreement; the third is to pass some Bug bounty program to actively mobilize the power of the community; fourth, you can consider integrating some insurance projects; fifth, you can deploy disaster preparedness plans in advance for some specific hacked scenarios.

For users, one is to maintain good web access and wallet operation habits; the second is to maintain a rational investment thinking and reasonably control their positions; the third is to pay attention to whether the project has been audited before using a certain DeFi protocol.

Finally, it is worth mentioning that many DeFi security incidents (including Poly Network) that have occurred in the past two years have a common feature-hackers have finally returned a certain amount of stolen money due to identity leakage and forced by actual legal pressure. Relevant cases tell us that although DeFi has achieved decentralization at the interactive level, every human being protected and restricted by law is the subject of participating in DeFi. Therefore, DeFi is not impossible. When assets suffer unexpected losses , The law is still a reliable weapon.

6. 2022: Crypto keeps innovation and moves towards the mainstream

Looking back at 2021, from the leaders represented by Bitcoin and Ethereum, to various application fields such as DeFi, NFT, and chain games, to infrastructure such as public chains, Layer 2, and cross-chain protocols, all have achieved considerable development. At the same time, supporting components and services such as wallets, data analysis and security companies also silently undertake and protect value.

There are many bright spots in 2021, the sector is moving rapidly, and there are still many small hot spots and small outlets that cannot be detailed in this article, such as NFTFi, SocialFi, decentralized storage, decentralized oracles, and liquidity release plan…

After 2021, we expect that the Crypto industry will continue to become the mainstream proposition of globalization in 2022, and will usher in richer innovations in more vertical industries.

On the macro level, Web 3.0, Metaverse, NFT and DAO will still be keywords for investment, and the integration of large entertainment and consumer fields with blockchain will continue to deepen; various compliant derivatives represented by Bitcoin spot ETFs It is expected to be approved and guide more traditional funds to enter the crypto industry, and custody and compliance services will also be further expanded; the crypto regulatory policies of major countries are becoming clearer, more central bank digital currencies are entering the landing stage, and some countries will follow El Salvador In the footsteps of expanding the application scenarios of Bitcoin…

The top exchanges may land in the traditional secondary market; the merger of Ethereum 1.0 and 2.0 will become a landmark milestone in the history of the public chain; legendary crypto funds will usher in a bumper year; talents from the traditional financial and technological fields will Continue to pour into and build the encryption industry…

In terms of segmentation, the new ecology including new public chains and expansion plans still corresponds to a broad growth space; automatic investment and passive income products contain new opportunities; platform services with portals and aggregation properties will emerge suddenly; token issuance methods, There will be more innovations in fund raising methods and decentralized governance; DeFi with more efficient funds will emerge…

GameFi and game guilds will enter the next stage of development to further realize the initial vision of the Metaverse; the ownership economy and creator economy will be further verified in the attempts of SocialFi; green and privacy will move from concept to mass adoption…

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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