For the majority of Crytpo players, what are the exciting investment opportunities in 2023? The Biteye research team has prepared 10 noteworthy cryptocurrency opportunities, corresponding Web3.0 projects and ways to participate. This article is derived from the research report of Biteye contributors Teddy, Fishery, Dddd, Louis, Hankerster, compiled and organized by BlockBeats. (Recap:Youtuber Ali Salsa was cut leeks!Play StepN and lose millions of tears: no longer touch virtual currency) (event context:The next financial crisis? U.S. lawmakers plan to abolish 31 trillion magnesium debt ceiling, allow “unlimited borrowing”)
The 10 major trends that will be mentioned in this article:
Regenerative Web3 Decentralized Physical Facility Network DePIN Public Chain and Layer 2 (Layer 2) Zero Knowledge Proof Ethereum Liquidity Staking Web3 Wallet Web3 Secure Full Chain Game (Onchain Game) New CEX (Centralized Exchange) NFT Infrastructure
1. Regenerative Web3
While the token economy injects vitality into Web3, it also brings some short-term impetuousness to Web3. If Web3 can be combined with renewable regeneration, it will have stronger long-term value support and be more easily accepted by mainstream society.
Regeneration is a recent new trend of thought, which goes beyond the concept of sustainable development and refers to the development of individual and environmental potential to build an ecologically harmonious system.
A representative of Regenerative Web3 is the Gitcoin donation platform, which is used to support the development of public goods with positive externalities. The way for individuals to participate is to choose the projects they are interested in and make donations. The possible income of donations mainly includes three pieces:
Rewards for Gitcoin donors from the large ecosystem (such as Optimism) Rewards for donors from donated projects (such as Rss3 and Node, etc.) Rewards for products that participate in the donation process (such as rewards for Gitcoin certifiers from the previous ENS).
At present, Gitcoin is conducting an Alpha round of donations, using a new decentralized donation contract. Donors in a single round of more than $10 can get an official POAP. You can pay attention to it.
Regenerative Web3 also has a relatively high degree of attention, which is the combination with the carbon credit market, bringing the transparency and liquidity of the blockchain into the carbon trading market. Representative projects include the creation of 70 million US dollars in financing by the founder of Wework Carbon credit company Flowcarbon.
The diagram below covers the currently existing Regenerative Web3 projects:
2. DePIN Decentralized Physical Facility Network
The core of Web3 is decentralization, and Bitcoin and Ethereum are considered to be the representatives of the most decentralized public chains. But if you look at the numbers below, you probably have a big question mark over how decentralized the blockchain is.
More than 50% of Bitcoin’s computing power is controlled by 3 providers, Foundry USA, AntPool and F 2 Pool
70% of Ethereum nodes are concentrated in 3 cloud service providers, AWS, Hetzner and OVH
More than 50% of Ethereum staking is concentrated in 3 centralized service providers, Lido, Coinbse and Kraken
The decentralized trust of the blockchain must be based on a truly decentralized network of physical facilities, so DePin is a track with strong demand.
From the perspective of market space, traditional cloud computing has a market value of 5 trillion US dollars, while the current market value of DePin’s related tokens is only about 3 billion US dollars.
The diagram below summarizes some of the projects related to the DePIN track:
3. Public chain and Layer 2 (Layer2)
Because of the impossible triangle problem of Ethereum, in order to solve the problems of expansion and transaction costs, the new public chain and the second layer have attracted a lot of attention.
Last year, the public chain broke out, and this year’s focus will be on the second layer of Ethereum (including Optimism, Arbitrum, zkSync, StarkNet, etc.) and modular blockchains (Celestia, Fuel, etc.).
StarkNet is the most sought after by VCs in L2. It can be seen from the investment amount and the heat of VC discussions that the D round of financing raised 100 million US dollars at a valuation of 8 billion US dollars. This is the best in the L2 track, and it is also a zk competition To be fair, Starknet is definitely worthy of everyone’s attention, followed by zkSync.
The most worth interacting with in L2 is currently Arbitrum, because there is an expectation of issuing coins, and it is also possible to get airdrops for ecological projects.
In addition to Celestia and Fuel, recently OP is moving towards modularity, and Op Stack is building a (Ethereum-based) modular base Lego brick.
The progress of Polygon and Cosmos in the public chain is also worthy of attention.
Polygon (Matic)
Polygon’s diversified development strategy is being promoted in an all-round way: second-tier, modular, NFT, games, etc.
First of all, Polygon’s ZK technology is developing very fast, which can be said to be even worse than other zk projects. The performance in NFT is also good, such as Reddit NFT, Trump NFT and the upcoming Starbucks NFT. Many Web 2 companies and celebrities have chosen Polygon.
Finally, there are games. There are many native games on Polygon. Recently, many Web2 game companies choose Polygon chain as the carrier of games.
To sum up, Polygon has technology, the traffic brought by the Web2 brand, and many game blessings.
Cosmos
Last year, dydx, the largest app on the second layer of Ethereum, decided to migrate to the Cosmos ecosystem and build its own App chain, which also increased everyone’s confidence in the development of Cosmos.
Building an App chain on Cosmos can achieve high customization, high TPS, and the Cosmos ecosystem is more decentralized (many projects are Fair Launch, without VC participation).
The methods of participating in the unissued public chain and the second layer mainly include the interaction of the main network, the establishment of nodes and the interaction of the test network. Generally speaking, the possibility of interactive airdrops on the test network will be lower than the former two.
4. Zero-knowledge proof
Zero-knowledge proof ZK is a hot topic recently, and zero-knowledge proof is mainly used for privacy and expansion in the blockchain industry.
In terms of expansion, it is mainly the zk-rollup expansion solution. The main projects include Polygon zkEVM, zkSync, StarkNet and Scroll. Everyone is relatively familiar with Polygon, zkSync and StarkNet, so let me talk about the innovation of Scroll here.
Scroll creates a decentralized ZKP market. Simply speaking, it solves the problem of zero-knowledge proof computing speed by outsourcing the computing process to miners such as GPU, FPGA, and ASIC, and realizes decentralization in this way.
The field of zkRollup also needs to pay attention to how to break through the TPS bottleneck problem (efficient calculation of ZKP) to achieve real expansion. Solving this problem needs to be solved through FPGA (programmable integrated circuit) or ASIC (customized integrated circuit) solutions, but it will take some time.
The representative projects of privacy mainly include Aztec and Aleo.
Aztec is led by a16z and Paradigm. Its goal is to build the second layer of “Privacy Ethereum”. A public chain with programming features.
Retail investors participating in ZK can participate in the interaction between the unissued public chain and the second-tier main network, establish nodes and interact with the test network. Generally speaking, the possibility of interactive airdrops on the test network will be lower than the former two.
5. Ethereum Liquidity Staking
After Ethereum (Ethereum) merged successfully, it became a deflationary asset, and the actual rate of return of the pledge was close to 6%. At the same time, after the Shanghai upgrade in 2023, users can cancel the pledge, which further reduces the risk of Ethereum pledge.
A low-risk return of 6% is a very attractive investment method for investors (of course, this rate of return will gradually decrease as the number of participants increases).
From the perspective of market space, the current pledge rate of Ethereum is only 15%, while the pledge rate of BNB, which is also a PoS public chain, is as high as 90%. It can be seen that Ethereum pledge still has a lot of room for growth.
At present, there are many service providers providing liquidity staking for Ethereum, and you can choose one for staking. Chaineye.tools compares the yields of different service providers and other dimensional data including liquidity to help you make a better choice.
Regarding Ethereum liquidity staking, you can also pay attention to distributed verification technology DVT (representing projects Obol and SSV) and secondary pledge (representing projects EigenLayer).
In particular, EigenLayer can help verifiers obtain more benefits, and at the same time allow other projects to take advantage of the security of Ethereum, which is highly innovative.
6. Web3 Wallet
The data analyzed at the Devcon 6 conference shows that the number of daily active users of all public chains is less than 0.05% of the current Internet. It can be seen that Web3.0 is still far away from Mass Adoption. One of the obstacles is the most widely used EOA wallet has a high learning cost.
Lowering the barriers to entry for users is the key to getting Mass Adoption for Web3.
MPC, the full name of which is Multi-Party Computation, is an important privacy computing technology that can be well combined with blockchain digital signatures to protect users’ private keys while lowering the entry barrier for users.
As an off-chain solution, MPC does not involve changes to the Ethereum consensus layer or contract layer, and is more feasible in the short term. At the same time, it brings users a Web2-level native experience such as mnemonic-free and multi-factor authentication.
Users can pay attention to the MPC concept token, try to use the MPC wallet, and interact. It may be the same as wallet projects such as C 98 and Trust Wallet, and issue airdrops to early users.
Suggested projects to focus on:
ZenGo: The earliest wallet application for the MPC solution. As the first person to eat crabs, ZenGo has handed in a pretty good answer sheet, with a total number of users exceeding 70 w+. Qredo: With the help of decentralized multi-party computing (MPC), it provides institutional users with decentralized private key custody, eliminating concerns about private key management; Qredo also cooperates with Hex Trust, MetaMask Institutional and other institutions to provide traditional users with complete custody solutions solutions to support them to access various DeFi protocols. OpenBlock: Committed to building a “bridge to parallel worlds”, allowing any user to enter the vast DApp ecosystem of Web 3 through traditional login methods, carrying the user’s assets, identity and data, managing the user’s investment portfolio, and discovering from DeFi to The latest opportunity for NFTs.
7. Web3 Security
While Web3 brings asset ownership to users, it also allows users to directly face a series of asset security issues. According to the statistics of the SlowMist blockchain hacking event archives, there will be 303 security incidents in 2022, with a loss of up to 3.77 billion US dollars.
Compared with 2021, the number of security incidents has increased by 15%, but the amount of losses has decreased by 60%, showing a small and high-frequency trend.
Among the 303 security incidents, the attack methods mainly include attacks caused by loopholes in project design, fraudulent methods such as Rug Pull and phishing, and losses caused by private key leakage, all of which are closely related to ordinary users.
Users can judge the probability of loopholes in the project design through the reputation of the project’s security auditor, and use security products such as wallet anti-phishing plug-ins and contract risk scanning to identify possible fraudulent methods in the project.
Suggested companies/projects to follow: Trails of Bits, OpenZepplin, ConsenSys, Slowmist, Peckshield, etc.
The above are audit companies with a good reputation in the field of code auditing, which can endorse the security of the project’s own design.
Scam Sniffer: A wallet security plug-in with a good experience, which can identify the interaction logic before the user uses the wallet signature, and prompts possible interaction risks. Go+ Security: The leading product in the field of contract risk scanning, with more than 2 million API calls per day With certain security data and capabilities, it is possible to identify the possible risks of the contract well before user interaction. SlowMist: Provides security auditing, security monitoring, bug bounty, defense deployment, security consulting, and other security-related services.
8. Onchain Game
The fundamental difference between Onchain Game (Onchain Game) and GameFi lies in the different degrees of decentralization, license-free, composable, and interoperable.
Full-chain games not only put game assets on the chain, but the entire game logic also exists in the network in the form of contracts, and the state storage and logic execution of the game are also completely on the chain.
What’s more valuable is that any DApp that conforms to the contract rules of the full-chain game can interoperate with it without permission, which will expand the composability of the full-chain game to a larger ecological scope.
Not only chain games can interoperate with each other, chain games and DeFi, NFT, and any DApp that may emerge in the future can also interoperate with the whole chain game, which will break the business pattern of Web2 with monopoly as the business model, and give developers and users more Perfect application experience and more imaginative creation opportunities.
The game track is one of the most suitable application scenarios for the second-tier network. On-Chain Game is a direction strongly promoted by StarkNet and OP Stack. Participating in the early test of the full-chain game is quite a chance to eat two fish.
Suggested projects to focus on:
Isaac: StarkNet’s first full-chain game is a multiplayer online physics simulation game based on the novel The Three-Body Problem. It is currently in the Open Alpha testing stage, testing the core game mechanism and preparing for open decentralized development. There is a certain threshold for ordinary users to participate, and the official tutorial for developers is given. Loot Realms: Large-scale multiplayer, on-chain combinable strategy game ecology. In the first version, players need to hold Realms NFT to start the game. In the second version, players can participate in the game by casting Adeventers. It is worth It is added that the adventurer’s equipment is the Loot that was popular before. Imperium Wars: A sandbox strategy game that combines card, diplomacy, military, and economic elements. It can be compared with war sandbox games such as Shuituzhihama and Romance of the Three Kingdoms in Web2 mobile games. The game is currently in development, while Imperium Wars and Eykar jointly developed StarkNet id. Lattice: A team that develops a full-chain game engine. It has developed a full-chain game development framework MUD. This framework has been applied to OP Stack, and a purely on-chain version of “Minecraft” OPCraft and word puzzle game Words has been launched. 3.
9. New CEX (centralized exchange)
Readers may ask, CEX represents the past, and will be dominated by DEFI in the future. Why do we need to pay attention to less sexy tracks? After reading the analysis below, you may have different ideas.
FTX was established in May 2019, and it took 2 years to become the second in the industry. Binance was only established in 2017, and it took 3 years to become the industry leader.
It can be seen that CEX has a strong explosive force and the ranking rotation is fast. Once funds start to flow into Crypto, CEX will be the first favorable track.
Moreover, the CEX platform’s token-enabling attributes are much stronger than most copycats. The valuation model is straightforward and the value discovery route is clear, which is a good target for attention.
In addition, the current DeFi user experience and threshold are very high, and the dominance of CEX cannot be shaken in the short to medium term.
According to the disclosed documents, FTX’s internal control is the most outrageous in this round of Thunder Exchange, and the management has unscrupulously grabbed users’ principal. What’s strange is that after FTX’s thunderstorm, some users are still saying good things about FTX.
It can be seen that a series of unique functions created by FTX are indeed very attractive to users, such as sub-accounts, trading interfaces, margin methods, and so on. Therefore, user experience is particularly important in this track.
It should be noted that the next round of bull market outbreak is not necessarily an existing CEX, but more likely a brand new CEX, just like Binance and FTX turned out to quickly surpass the old CEX.
Recently, the former Three Arrows founders Davies and Su Zhu have raised $25 million for a new CEX called GTX. Of course, the volume and resources of today’s established CEXs are not the same as those three years ago, and the first-mover advantage is more obvious. Therefore, new and old CEXs must be paid attention to.
In a bear market, we can dig out the next CEX that may explode from the dimensions of CEX user experience (new features), compliance (relationship with regulators), trading volume, and contract opening volume (liquidity).
From the open interest of BTC contracts, it can be seen that the second and third places are a bit unexpected, which also confirms the above-mentioned characteristics of “CEX ranking rotation is fast”.
In short, for institutions with power and wealth, CEX is the best entrance for them to enter the Crypto market. With its own strong resources and following the successful experience of Binance and FTX, it is not difficult to cultivate a leading CEX.
As long as the market is hot, big capital will inevitably enter for profit, and the next CEX will inevitably rise. As a retail investor, you only need to choose the target by yourself and wait for the wind to come.
10. NFT infrastructure
For a long time in the past, most users who believe that NFT will have large-scale applications will invest in buying blue-chip NFT in order to enjoy the industry dividend of NFT explosion.
As the NFT track gradually matures and the segmented track becomes more and more abundant, NFT blue-chip items are no longer the only choice for investing in NFT.
From the perspective of value transmission logic, NFT infrastructure projects such as the NFT market, NFT lending, NFT contract options, fragmented NFT, NFT valuation, etc., can enjoy the dividends of the NFT industry more directly than investing in NFT single products.
We can quickly screen out potential NFT infrastructure projects from the perspectives of market share, innovation, and user experience.
Blurred
Belonging to the NFT market track, Paradigm and other institutions have invested 14 million US dollars in a new generation of NFT trading platform. Different from OpenSea’s collection style tone set in NFT summer, Blur’s user experience is more inclined to transactions, and it claims to be “a professional trader”. Provide services”.
Thanks to Blur’s trading airdrop, Blur’s NFT trading volume surpassed that of OpenSea in the past month, accounting for about 42.54% of the entire NFT market share (as shown in the figure below), and has become the largest NFT aggregation trading market with the largest trading volume on the chain.
If there is a need to trade NFT in the near future, you might as well try Blur, there will be a clear card airdrop reward.
BendDAO
BendDAO is currently the NFT lending platform with the highest TVL. Using the NFT loan function, users can not only mortgage their NFTs in exchange for liquidity, but also perform many complex operations with one click on the BendDAO platform, such as:
NFT Down Payment (Down Payment) Buyers can pay a minimum 60% down payment with one click, and then purchase NFT from BendDAO as a mortgage. Collateral pending order (List + Borrow + Sell) NFT holders/sellers can choose to place pending orders with one click and get up to 40% of the floor price.
BendDAO has completed the public fundraising and airdrop tokens last year. In the public fundraising stage, a whale took over a large amount of money at the end stage. The chips are relatively concentrated, so pay attention to risks.
NFTperp
If you are optimistic about the upside of BAYC, but you don’t have 80 Ethereum funds to buy, how to participate in the trading opportunity? NFTperp provides a solution.
NFTperp is a decentralized NFT perpetual contract platform, which can go long or short at a specified NFT floor price, with a maximum leverage of 10 times.
This is very friendly to users who have small capital and want to trade blue-chip NFTs. Just like the exchange’s perpetual contract mechanism, users need to pay or earn funding costs after opening an order on NFTperp.
The funding fee is settled on an hourly basis, and traders with long positions pay traders with short positions when the funding rate is positive, and vice versa when the funding rate is negative.
It should be noted that the oracle price of NFTperp is not taken from the floor price of pending orders of major exchanges, but is determined by the real transaction price of the NFT series within the time period.
Currently, the project is in the stage of testing and simulated trading, so you might as well give it a try.
Double Protocol
Double Protocol is a rental marketplace for gaming NFTs. If the game project party uses the ERC 4907 protocol customized by the Double team to issue NFT, then the NFT can be listed on Double’s rental market.
NFT holders can set the term and cost of the lease on the Double platform. After the lease expires, the lessee’s right to use will be automatically released. At present, as many as 348 NFT series support ERC 4907, including star projects such as Decentraland and ENS.
As the type of NFT gradually shifts from pictures to empowerment, the empowerment of leasing NFT will become a rigid demand and it is worth experiencing early.
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