What are the five major development directions of Polkadot’s ecological start now worth paying attention to?
It has been more than a week since the end of the Kusama slot. The 5 auctions locked up more than 1.14 million KSM, accounting for 9.8% of the KSM circulation. At present, with the end of the first round of slot auctions, the Kusama network has been suspended. After using the Crowdloan function, wait for the stable operation of the network, and then there is a high probability that the second round of auctions will start.
This week we also saw another point of concern. Kusama has completed the Parachain upgrade of Statemine. Once the network upgrade is completed, anyone can create assets and NFTs on Statemine. It can be said that after all the hardships, we finally Seeing that some assets can be used in the Kusama ecosystem, this has also brought changes to the development of Polkadot’s ecology. After all, the functions of Kusama as a pioneer network will also be replicated on Polkadot.
It can be said that after more than a year of testing and preparation, the Polkadot ecosystem has finally come to the stage where it is about to enter the real application, and it is no longer the “nothing” that some people criticized, especially the upgraded functions of Statemine. , It seems to be very much like Ethereum in 2017. After all, Ethereum at that time only had the functions of the current Statemine parachain. Only later did it have the Dapp, DeFi and NFT that we now know well.
Therefore, in a sense, Polkadot is now standing on the starting line of an ecological outbreak, and is no longer an empty shell of “closed-door research and development”, but just being hyped.
As an ecological observer, we seem to have more angles to observe the stories that may happen next in the Polkadot ecology, and these stories seem to be able to piece together a complete ecological map, and it is also convenient for us to see the real behind the hype Prospects, below, Enjoy.
Five development prospects of Polkadot ecology
Early project bonus
Whether it is a traditional project or a blockchain project, there is a stage in the early stage of the project, that is, the resources that need to be started, that is, the capital and flow. And those who contribute to this early in the project will undoubtedly get rich returns. At the same time, the projects that joined the track early can often seize the opportunity and enjoy the early dividends of the project.
In traditional projects, many teams will choose venture capital financing as the first choice for obtaining start-up capital. In the past ten years, many venture capital companies have made a lot of money because of their unique vision and vicious perspective. However, the threshold for becoming a venture capitalist is relatively high, making the early dividends of the project a carnival that is not a carnival that ordinary people can participate in.
The blockchain project has changed this status quo. Users can join the construction of the community through a lower threshold, and get excess rewards with the funds invested and the traffic brought to the project.
Let’s take the two more mature circuits of hardware infrastructure projects and DeFi projects as examples in the mass projects, and briefly analyze why we say that the early bonus of the project is one of the five major development prospects of Polkadot.
The first is the hardware infrastructure project. There are many hardware infrastructure projects in the Polkadot ecosystem, such as Deeper Network, a decentralized privacy security gateway dedicated to becoming a Web3.0 infrastructure; Crust, a decentralized storage network dedicated to the Web3.0 ecosystem; Dedicated to becoming a Web3.0 shared cloud platform, Phala aims to solve the trust problem in the computing cloud.
These projects are characterized by the need to use the hardware resources provided by many computers or devices, such as network bandwidth, storage space, TEE (Trusted Execution Environment), etc., to build a corresponding resource network, and combine the blockchain to create a decentralized network Certain part of the infrastructure. Participants can be motivated by contributing corresponding hardware resources. In the initial stage of such a network, there are fewer people participating, so there are naturally fewer monks and more porridges, and there will be good opportunities.
On the other hand, the DeFi project, which is a popular track, will have a similar situation. Since Compound combined Yield Farming with DeFi, many DeFi projects have followed suit and created a common model that provides liquidity for DeFi projects. Coupled with the most popular automated market maker (AMM), now that this mechanism is used to allocate native tokens to liquidity providers and attract users to actively participate has become the basic way for many DeFi projects to quickly start.
The Polkadot ecology has already had such a foundation. For example, there is Acala in the ecology that aims to become a one-stop DeFi hub in the Polkadot ecology; it is committed to providing liquidity infrastructure for pledged assets, as the DeFi protocol at the bottom of the Polkadot ecology Bifrost: As the underlying cross-chain DEX protocol, Zenlink and other projects are focusing on the largest sector of the Polkadot ecology, DeFi.
Karura and Bifrost, the pioneer networks of Acala Network, previously won Kusama’s first parachain slot auction. As a dedicated DeFi chain, Acala provides a series of applications for end users for the assets of the Polkadot ecosystem. , Is expected to be the “center” of the Polkadot ecological project DeFi; Bifrost provides security and liquidity for the tokens in the Polkadot ecosystem, which is expected to be an indispensable part; and Zenlink is based on Substrate through access Zenlink DEX Protocol, the ultimate, open and universal cross-chain DEX protocol, enables all parachains to build DEX with one click and realize liquidity sharing.
These swords mean that the Polkadot ecological projects in the DeFi field have actual landing scenarios to provide users with liquidity and quickly start the application. After the initial flow and participants are established, the ecological development will be like a locomotive that has already started. It’s coming sooner.
Naturally, as a participant, the accumulation of user loyalty does not happen overnight, and the development of habit and inertia of use have brought significant opportunities for early-emerging projects.
For users who participated in the early stage of the project, the early birds will eat the worms. “Early entry into the track will undoubtedly be rewarding. Take Acala Network as an example, in addition to the excess return brought by early investment. In order to attract traffic and Part of the funds, Acala Network also held the Mandala Candy Festival, Build Acala#1, Karura pledge voting rewards, and #KusaMeMe emoticon contests, which brought huge rewards to users, and this is also the exclusive early bonus of the project.
To sum up, whether for the project party or the user, the early dividend of the project is a development prospect that is very worthy of our attention.
Another important development prospect of Polkadot is asset expansion.
For any ecology, the entry of funds is very important. This round of bull market is the improvement of the entire Crypto field by the incremental market brought about by the entry of traditional funds. This is also applicable to the Polkadot ecology.
Fortunately, the cross-chain nature of Polkadot itself is a great way to solve the problem of capital entry. The most direct way is to import valuable projects directly into the Polkadot ecosystem through a transfer bridge. For example, the Interlay team that cooperates with the official is doing a cross-chain bridge from Bitcoin to Polkadot. By then, anyone can Through the transfer bridge, cross your BTC to Polka BTC to become PolkaBTC.
Of course, there is another way to generate it through issuance. For example, the current universal asset chain Statemine on the Kusama network (Statemint on Polkadot) can issue digital assets on Polkadot, and the market value is nearly 30 billion US dollars. USDC is likely to inject capital into the Polkadot ecology in this way.
So why should these assets be expanded to the Polkadot ecosystem? Let’s take WBTC and USDC on Ethereum as examples to take a look at the expansion of assets.
First of all, what is WBTC? In one sentence, it is the first token that uses the ERC20 standard to establish a 1:1 anchoring of Bitcoin, allowing the liquidity of BTC to enter the Ethereum ecosystem, which does not affect the storage value of Bitcoin, and can participate in the services of Ethereum. .
Although WBTC is not decentralized, there are custodians and acceptors, but this does not affect users’ preference for it. According to the current data on the Ethereum blockchain browser, there are about 33,000 WBTC holding addresses, and the total issuance has risen from 3851 to the current 192,470 in the 14 months from May 2020 to the present. In other words, WBTC brings an asset expansion equivalent to the value of 192,470 Bitcoins to Ethereum.
The reason why BTC with a centralized generation method can achieve such a huge volume increase is that the application of DeFi can bring considerable APY, which is enough to ignore the problem of centralization. Then, when anyone can generate PolkaBTC in a decentralized manner in the Polkadot ecology, I believe that when the high-quality DeFi in the Polkadot ecology becomes operational, the volume of PolkaBTC will grow at an astonishing rate.
On the other hand, USDC is a US dollar stablecoin issued by the financial company Circle with a 1:1 peg to the US dollar. The funds are supervised by banks and have payment licenses in the United States (including the New York State BitLicense), the United Kingdom, and the European Union. It is also a centralized issuance method, but this does not prevent USDC from gaining great growth with the popularity of DeFi, and its volume quickly soared from 1.15 billion U.S. dollars to 26.4 billion U.S. dollars in one year.
Through WBTC and USDC, we can intuitively feel that DeFi projects and capital expansion are inseparable, and the Polkadot ecology will also give birth to DeFi projects that have a strong demand for assets.
For the project party, how to obtain the support of this part of the expansion funds is very important, and it is time for them to test their operational capabilities. Among them, there will inevitably appear to be project parties to attract users and funds through marketing activities or design some good Yield Farming mechanisms. Projects that receive such funds will definitely be the best in the early days of the Polkadot ecology, and we can wait and see.
On another level, participants can observe the expansion of the capital volume in the Polkadot ecology and track where these assets are flowing to intuitively understand the development of the Polkadot ecology, so as to have a clearer grasp of the Polkadot ecology. The rhythm of development, and find a clear participation path from it, to obtain the dividend of ecological development.
Although Polkadot’s ecological development started late, there are already ETH, EOS, TRON, BSC, Heco, Solana, Polygon and many other public chain jewels in the front, but Polkadot can learn from the successful path of it and come from behind.
Nowadays, it is no longer the stage of a chain taking the world. Since the explosion of applications such as DeFi and NFT, the original largest blockchain application platform ETH has been overwhelmed, and many projects on Ethereum have sought solutions. As a result, we can see that some well-known projects have begun to continuously expand their boundaries on the new public chain. Gradually, the multi-chain ecology of Ethereum projects migrating to other public chains has begun to take shape.
One of the more typical representatives is that the well-known lending project Aave began to deploy on Polygon, which is positioned as the aggregator of Layer 2 solutions, in April 2021. What effect will such a choice bring?
First, in order to motivate users to participate in the Aave application on Polygon, this requires some incentives. To this end, on April 14th, Polygon announced that it would provide Aave with Yield Farming rewards for a total of 40 million US dollars for one year. A mature and well-known project + excellent user experience + Yield Farming rewards, the most direct effect is to ignite Polygon. The ecology of Polygon has made Polygon’s locked-up capital rapidly increase exponentially. Within two months, Polygon’s total locked-up volume has skyrocketed from less than 100 million U.S. dollars to a maximum of 8 billion U.S. dollars.
In the end, Aave received a maximum of US$3.4 billion in lock-up funds on Polygon, and the entire network’s locked-up funds once exceeded US$20 billion.
According to data from DappRadar, on June 17, the average daily transaction volume of Aave and Aave V2 on Polygon has surpassed the volume of these two protocols on Ethereum, which also proves that more funds are moving from Ethereum migrated to Polygon. In addition to harvesting huge amounts of funds, Polygon has also rapidly climbed to the top level in the industry in terms of the number of active addresses and transactions, and can compete with BSC.
Of course, the participants of Polygon and Aave are also very rewarding. Not only do they have good feedback in the market, but the rewards of Yield Farming are also a lot of incentives. Therefore, this is a perfect win-win-win situation. .
It can be seen that the migration of mature projects to the new ecology will have great prospects, not only for the project side of the chain, or for the application project side, or for the participants. There are dividends of cooperation and win-win, which are worthy of attention and entry.
At present, well-known DeFi projects on Ethereum, such as Compound, have reached a cooperation with Acala. Can the two learn from the successful experience of Aave and Polygon and regain their glory? Or are there other projects that follow the gourd to draw a dipper, and then come to a strong combination of fast-rising ecology? This is the point that Polkadot’s ecological development is very worth looking forward to.
The development of the new ecology will reproduce the growth path of the development of successful projects. Ethereum, as the largest blockchain application platform at the moment, is also a huge market testing machine. With the continuous landing of applications such as DeFi and NFT, it also provides sufficient experience for other public chains to develop their own ecology. This is why the rapid rise of new public chains in recent years.
Because the successful experience can be the first to complete the layout before the new public chain has formed an ecology. It is like we all know to make real estate to make money. When there is no business in a new city, the real estate operation is complete. The copying of mature business models to new cities can naturally achieve success with great probability.
After the Polkadot ecosystem has passed the initial start-up phase, some excellent applications will definitely come out, and will basically reproduce the development of applications on Ethereum and emerging public chains. For example, the most popular one is often in DeFi. The most basic needs, that is, lending, transactions, stablecoins, etc., will be the fastest to land in the application direction of the Polkadot ecology.
Venus and PancakeSwap on BSC are just this logic, I believe there will be such projects on Polkadot. With one or two successful projects, both capital and participants have benefited. Once such a beneficial effect occurs, it will naturally attract enough funds to enter the market and follow-up participants to join, and the ecology will be revitalized.
However, Polkadot is slightly different from other public chains. It not only has an application ecology, but also a chain ecology, so here are two prospects. If these applications are successful and can attract a lot of funds, then the parachain projects that carry these applications will also be positively affected. For example, the success of Venus and PancakeSwap has created a boom in BNB. We need to pay close attention to which parachain application in the Polkadot ecology will explode first. These applications and this parachain are both very promising prospects.
The discovery of the track leader
After the initial application explosion stage, the Polkadot ecology has been successfully activated. At this time, it is the period when many projects seize the leading position in each sector. At this stage, there will also be two prospects. One is the prospect of the chain, such as Polygon, which focuses on Layer 2 and becomes the leader of the public chain in the Layer 2 field, or, like FLOW, focuses on NFT and becomes a public chain in the NFT field. The faucet of the chain.
The other is the application prospects, such as the storage track in the infrastructure sector, the lending track in the DeFi sector, the derivatives track, the trading track and so on. In each slightly subdivided field, a leader or several giants may be born. They will attract most of the funds and participants and become the most powerful batch of applications. Attraction will increase the value of the project. Naturally, these values will be reflected in the market. I believe that this dividend is easy to understand, so I won’t repeat it too much.
Although Polkadot’s ecological development is relatively late, it is no longer the era when the blockchain cannot be implemented. The two major application directions of DeFi and NFT, although the verification time is not long, they are based on real needs. After all, the cover report of Fortune magazine in the United States today reads “DeFi is occupying Wall Street.” Therefore, there is no need to worry about the problem that the application cannot be implemented and the Polkadot ecology cannot be done.
In addition, Ethereum and emerging public chains have stepped on many pits, and have explored many successful experiences. These past experiences can make Polkadot stand on the shoulders of giants and quickly rise to the ecology. What we need is to be clear about the prospects, observe the development of the ecology in an orderly and thoughtful way, and participate as appropriate.
Ecological development is a gradual process. Although we have sorted out five prospects for ecological development, this is a long-term event and does not mean that it will happen immediately.
For an ecology, the most important factor that determines its development level is the economic environment. Developing against the environment will always get twice the result with half the effort, but if the environment is good, it will get a huge boost and get twice the result with half the effort.
In our previous article “From the success of BSC, exploring a way of thinking about the rise of Polkadot ecology”, we mentioned that the development of BSC and Solana to a large extent is to catch up with Bitcoin and Ethereum at the end of 2020 and early 2021. The hot market for several months triggered by the beginning of the big rise. Therefore, although Polkadot has the above five development prospects, the time represented by the environment is very important.
At present, the entire Crypto is in the stage of a structurally weakened bear market, so it is not realistic to restore to its previous glory within a short period of time. At this stage, you may wish to recuperate and prepare for the enemy. You can pay a little attention to the five major development prospects mentioned today, and expect the enemy to take precautions in advance so as not to miss the opportunity for future development. And this is the original intention of this article. I hope that everyone will not misunderstand and blindly raise their expectations for Polkadot.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/what-are-the-five-major-development-directions-of-polkadots-ecological-start-now-worth-paying-attention-to/
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