Full text of ConsenSys third quarter Web3 report: DeFi, governance, and NFT
Original title: "THE WEB3 REPORT"
Original source: ConsenSys
Original compilation: A&T Capital
1. Why Web3?
This quarter, we made some changes, not just studying DeFi, but also studying the main trends of Web3. As we have written in previous reports, the main innovation in DeFi lies in decentralization. Once smart contracts are deployed, they execute directly against the contract code without intermediaries. This opens up a world of decentralized financial applications, from Bitcoin to lending, decentralized exchanges, and more. Cryptocurrencies are changing not only finance and money, but also the way creators form Internet organizations and create shared value. Web3 has come to represent new economic ideas about how the internet is architected and how individuals share in this value creation.
Web1
Open source Internet protocols originated in the 70s and 80s, including TCP, IP, SMTP, and HTTP.
Open and Inclusive Design Concept
Anyone can build things on top of it without the permission of others.
Web2
Open source is hard to make money.
Web2's business model relies on building proprietary, closed protocols on top of the Internet's open source protocols.
Several of these companies are now the most valuable in history, and while we use them for free, we have to trust them to sell A model that is opaque to user data and code.
Web3
Like Web1, it is an open source protocol, but through encryption economics, the protocol can be collectively owned.
Independent of traditional organization, the code is executed directly.
Pay attention to open source software, users have the right to data ownership and access without permission.
Creates a sense of identity and collaboration.
Second, Web3 Economic Model
This report covers the verifiable decentralized network formed economic model. Starting with Bitcoin, to mortgages and lending protocols, to NFTs and games, the Web3 system now represents a vast ecosystem, including new ways for creators and communities to monetize, and new models for Internet-native community collaboration. Web3 is still in its infancy, which is why we introduced the Layer2 network, built to offload the execution of programmable smart contracts from the Ethereum base layer to increase speed and reduce transaction costs.
Smart contract itself is a new type of programming, which requires careful investigation and review to ensure safety and efficiency, thereby reducing the risk of vulnerability. This is covered in the Smart Contract Security section. Finally, regulators around the world are beginning to explore how to enforce existing regulations to protect investors while classifying these new types of assets.
3. DeFi Stablecoin
BUSD's market share has also grown over the same time frame, while DAI's market share has remained stable. USDC is rapidly approaching USDT’s market share.
According to the USD Stablecoin performance chart below, most USD-denominated crypto Stablecoin can basically maintain the exchange rate pegged to the US dollar, with only moderate fluctuations.
Compared to other crypto stablecoins, DAI exhibits greater volatility because DAI is generated by other digital assets such as ETH, BAT or USDC as collateral , while USDC is more difficult to anchor to the US dollar exchange rate, because every other encrypted dollar stablecoin is backed by a US dollar reserve. All stablecoin prices fluctuate to a greater or lesser extent.
Although Stablecoins can basically maintain a peg to the US dollar exchange rate, they support different Stablecoins Reserve assets vary in credit quality and risk. For example, USDT has greater exposure to commercial paper and corporate bonds than PAX and USDC, which is a source of credit risk.
DAI is a DeFi Stablecoin generated by overcollateralization of cryptocurrencies such as ETH, WBTC and USDC.
4. Borrowing
DeFi lending saw a significant increase in outstanding loans in the third quarter, reaching an all-time high on September 6 with approximately $24.7 billion in outstanding debt. This dramatic rebound in the third quarter came after a sharp decline in activity at the end of the second quarter, when outstanding debt totaled about $14.3 billion.
There is $7.4 billion of outstanding debt in the Aave agreement. Interestingly, the market expects Aave to be the leading lending protocol, as Aave has significantly outperformed rival Compound’s Token COMP. Additionally, Aave has achieved a Fully Diluted Market Cap of approximately $4.6 billion, while Compound is slightly behind with a Fully Diluted Market Cap of approximately $3.1 billion.
Approximately 68.2% of outstanding loans are held in DAI, compared to 21.9% for USDC, indicating a growing level of trust in the decentralized Stablecoin high. The growing level of trust in DAI may be due to concerns that Circle is being investigated by the SEC.
User growth of leading lending protocols Aave and Compound both slowed in the third quarter. While Aave's user base grew 42% in the second quarter, from 46,588 total users to 66,083 total users, it only grew 16% in the third quarter, to about 76,909 total users. Likewise, while Compound’s user base grew about 4% in Q2, from 311,581 total users to 323,759 total users, their user base only grew 1.9% in Q3, to 323,759 total users. While outstanding loans increased sharply overall, user growth did not experience the same exponential growth, which means that the average outstanding debt per user increased sharply in the third quarter, and this result may be driven by the fact that we started to experience in the third quarter driven by the market rebound.
V. DeFi Protocol Income
As more participants enter the market and more complex financial instruments are established, the DeFi ecosystem will experience an unprecedented surge in 2021. Popular protocols like Uniswap, PancakeSwap, and SushiSwap are now generating well over $100 million in annualized revenue.
dYdX, a decentralized trading platform that supports perpetual, margin trading and spot trading, achieved more than $45 million in revenue in September.
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6. Core DeFi community governance in the third quarter
Currently, community governance drives changes in most major DeFi protocols. Token holders vote on proposals, which range from proposals on how the protocol should allocate its treasury funds, to more specific details such as changing the collateralized asset coefficient on Compound.
Users can clearly see major upcoming changes in DeFi protocols by following governance updates.
Synthetix
In Of all the protocols, Synthetix's community governance is by far the most active. There are always multiple updates per week, changing various parameters related to collateral minting synthetic assets. Additionally, Syntheti frequently changes the fees associated with issuing synthetic assets on the protocol. This quarter, Synthetix introduced dynamic fees aimed at reducing L2’s target collateralization ratio from 900% to 750% in a neutral early run, while enabling a new swap feature that allows users to price synthetic assets by combining oracles like Chainlink, Uniswap V3, etc. , swapping without fee recovery, increasing L2’s token release reward to 50K, and introducing two new decentralized governance bodies.
Here are the main changes this quarter:
· On-chain proposal SIP-155: Cancellation synthetixDAO (Approval Finance Committee).
· On-Chain Proposal SCCP-136: Increase L2 Token Release Rewards to 50K
· On-chain proposal SIP-120: Atomic swap function
· On-chain proposal SCCP-137: Reduce L2 target C-Ratio to 750%.
·On-Chain Proposal SIP-184: Dynamic Swap Fees
·On-Chain Proposal SIP -133: Increase batch partner rewards to 10K SNX p/month
On-chain proposal SIP-170: Inflation shifted to L2 incentives
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· On-Chain Proposal SIP-168: Governance Participation Plan
AAVE
While Synthetix is one of the most active governance systems in all of DeFi, Aave's governance typically handles larger proposals. This includes changing liquidation bonuses for the assets they support, adding support for the algorithm Satblecoin FEI, enabling Gauntlet to analyze the Value at Risk (VAR) of backing assets, adding support for the DeFi Pulse Index (DPI), and expanding Aave v2 liquidity excitation.
Here are the key changes this quarter:
· AIP #38: 11 Aave V2 Liquidation bonus update for assets
On-chain proposal AIP33: Add FEI in Aave V2
AIP 35: Adjusting Rates to Counter APY Overestimation
On-Chain Proposal AIP 37: Updating Liquidity Mining Distribution
On-chain proposal AIP 36: Update LTV and liquidation thresholds to appropriate levels
On-chain proposal AIP 31: Increased DPI on Aave V2
On-Chain Proposal AIP 32: Expanding Aave V2's Liquidity Incentives
AirSwap
AirSwap Token holders are compensated by creating improvement proposals and voting. After voting, participants are able to receive dividends from the protocol fee pool, proportional to their voting weight. In Q3, the community approved a protocol fee distribution and a standardized contributor fund.
The following are the main changes for this quarter:
· Snapshot Proposal AIP 46: Protocol Fee Allocation
·Snapshot Proposal: Contributor Fund
Uniswap
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Similar to Aave, Uniswap does not have a very active governance process. This lack of strong governance may stem from the fact that votes require the support of 40 million UNI to pass, while users must have 2.5 million UNI to submit proposals. The only significant governance proposal passed this quarter was to upgrade their governance protocol to the Governor Bravo protocol.
Here are the key changes this quarter:
· Upgraded GovernanceContract to Compound's Governor Bravo
Compound
Compound, like Synthetix, has a very active governance process. Major updates include temporarily disabling COMP rewards, creating a whitelist for addresses that can always make proposals without maintaining the 65K COMP threshold, and distributing DAI to users affected by the DAI event in November 2020.
The following are the main changes in this quarter:
On-chain Proposal 59: Distribute DAI For users affected by DAI
· Proposal 60 on the chain: white list of addresses for submitting proposals
On-chain Proposal 63: Temporarily prohibit COMP reward repair
Seven, Ethereum is still in a dominant position in DeFi
Among all cryptocurrencies locked in decentralized finance Among assets, Ethereum accounts for 77% of the total value locked (TVL), compared to 10% or less for each of the other top five smart contract chains. After Ethereum, the leaders in terms of total value locked in decentralized finance have been Binance and Solana. As a result, other chains have taken notice and launched incentive programs such as Hedera, Avalanche, Fantom, Terra, and Celo, with a combined valuation of $47 billion as of the end of September, shrinking the market share of new Ethereum Layer 1 protocols.
Eight, Layer2 DeFi
Web3 needs Ethereum to extensions, but the extension situation can be confusing for first-time users. Many scaling solutions are still in the research and development phase, and the technology is constantly evolving with new solutions emerging every month. The safest scaling solution is Layer2.
Layer2 solutions are designed so that Ethereum can act as a referee in case of disputes. Rollups, a subset of Layer 2, are very promising solutions given their scalability capabilities and security inherited through Ethereum. However, rollups vary due to design and implementation choices made by development teams. In the following sections, we attempt to analyze the five most used rollups in Q3. The result of this analysis is an analysis of the current state, with less reference to the future capabilities of these solutions.
We identified three dimensions that are linked to DeFi users’ need to scale: How much money is in Layer 2 (also known as locked total value or TVL), how many transactions occurred in the third quarter of 2021, how many unique addresses, and finally the cost of conducting transactions on Layer2.
Keep in mind that most of the solutions proposed here are in beta stage and not as decentralized, economical, fast and secure as planned in the future. Also, only Optimistic Rollups, Arbitrum, and Optimism have blockchain explorers, meaning that one-to-one data comparisons can be difficult. For transaction costs, we can only analyze current costs through various data sources.
Usage
The greater the usage of Layer2, the more DeFi users The higher the price, the less slippage and generally the more liquid. At the end of the third quarter, Arbitrum had the highest usage of all categories as an Optimistic Rollup.
However, Optimism comes next, and their design approaches are very similar. Of the single-purpose rollups built for decentralized exchanges, dYdX is by far the most used, with 480,000 trades per day.
Eight. Cost
All Layer2 can greatly reduce the cost. Zero Knowledge (zk) rollups show greater potential for reducing transaction costs. However, in these cases, dYdX, Loopring, and zkSwap v2 have a fixed percentage of the transaction volume as a transaction fee, which is only indirectly caused by the gas cost of the solution.
However, when it comes to transferring ETH, one can see that Loopring as a Zero Knowledgerollup is cheapest.
ConsenSys is making it easier for developers and end users to get started with Layer 2 solutions. If you want to start exploring Layer 2 DeFi, be sure to check out our guide on adding custom networks to your wallet. If you are developing a Layer 2 Dapp like Arbitrum or Optimism, our Infura and Truffle developer tools now support it.
Nine, NFT
2021 undoubtedly belongs to NFT year. From the emergence of new mechanisms for turning songs into financial assets, like Royal, to Snoop Dogg's claim to be the famous NFT collector Cozomo de' Medici, it's hard to escape the hype.
This is because sales in the third quarter of 2021 totaled $10.7 billion, an increase from the previous quarter 8 times, involving 33,985,609 sales.
As the ecosystem matures, we start to see secondary sales throughout the quarter The numbers outstripped primary sales ($17.5 million vs. $16.4 million, respectively), highlighting that while newer projects are still attracting attention, older projects are retaining it.
However, primary sales remained strong, surpassing $16 billion in the third quarter.
The platform driving this disruptive trend is OpenSea, an NFT trading platform , users can buy and sell works from almost any NFT collection. The deals via OpenSea are telling: In a record-breaking August, the platform accounted for $3.16 billion of the $3.25 billion in total NFT sales. Interestingly, Nifty Gateway was the dominant player in the NFT trading platform market until April this year, while OpenSea solidified its position as the platform of choice in the second and third quarters of 2021.
Other leaders in the field of NFT trading platforms are SuperRare, Foundation and Hic et Nunc, but their proportions are relatively small , OpenSea accounted for 97% of the market volume in the past quarter. Another contender to watch out for is Christie's from the traditional world, who surpassed $100 million in NFT sales in September 2021, with their most recent NFT auction in Asia achieving $15.6 million on September 28 Forehead.
10. Profile PictureNFTs (PFPs)
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The cryptocurrency community has become an expressive place, with users portraying themselves as various avatars through their profile pictures. Chances are, you've seen these pixelated punks, boring apes, and cute felines floating around the Twitter universe, and that's soon to be verified. This is no longer a fad for crypto-natives. PFP is going mainstream, celebrities like Jay-Z and Snoop Dogg buy and choose Cryptopunks for their Twitter profiles, payments company Visa adds Punk to their collection, and society continues to embrace this cultural bull market.
What started as a quirky art project has grown into an entire crypto art movement. CryptoPunks is an internet artwork that activates the ERC-721 standard that underpins most digital art and collectibles today. There are 10,000 unique CryptoPunks, each with randomly generated properties. These pixelated characters are a mix of boys and girls, rare zombies, apes and aliens.
Since its launch, Bored Apes have exploded in popularity, with NBA players like Stephen Curry The star now uploads a profile photo of BoredApes on Twitter. With the Bored Ape YachtClub (BAYC), you'll double your BoredApes NFT, double your Bored Ape Yacht Club membership, and get access to exclusive perks like mutant apes, 3D models, and Doodleboard collaborations. This is a successful attempt to create a private club with NFTs as the threshold, where NFTs are granted verifiable access.
Based on inspiration from CryptoPunks is this 3D pixel character with an avatar that can be used in games and in the Metaverse. With Meebit, you get additional asset packs that allow you to animate your NFTs for even more entertainment. Whether you want to dance in Decentraland, perform stunts in your game world, or want to 3D print your avatar as a tangible decoration, Meebits' flexible customization capabilities allow you to start your Metaverse journey according to your own preferences .
The proliferation of PFP NFTs also points to a broader cultural movement. The JPEG trade seems to be driven by the cultural and symbolic value inherent in these creative interactions rather than an exchange underpinned by pure utility. PFP NFTs allow people to surface, build community, and encourage artistic expression. The deal history of LarvaLabs , Yuga Labs and Hollywood suggests that projects like CryptoPunks, BAYC and Meebits will gain more media exposure through film and television. Owning these NFTs can serve as your ticket into the internet-native social clubs, which are currently growing in size every day.
11. Financialization of NFT
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Since NFTs are inherently combinable with other Ethereum smart contracts and protocols, they are suitable for financialization. Let’s look at three main types: collective auctions, fragmentation, and using NFTs as collateral for loans.
The first is PartyBid, a product that allows you to team up with friends and collectively bid for NFT. By pooling funds, consumers can more easily acquire higher value creations (like CryptoPunks).
Not only is this a cool way to buy and build NFT collections with friends, but it gives users access to some of the most exciting items on the market, and potentially earn higher returns. This innovation is made possible due to the digital nature of NFTs, whereby people around the world can enjoy ownership of the same digital good without the difficulty of actually sharing it like a work of art. In some special cases, this even means that partial owners of a CryptoPunk are airdropped into another rare CryptoPunk for free.
Another innovation is the fragmentation of NFTs, with companies like Fractional allowing You bid and buy bits and pieces of NFTs. The total bids of all users are equivalent to the total selling price, and according to your investment amount, you will get a part of NFT. Fractional is the same as PartyBid, but allows strangers to participate for added buying power. Not only does this democratize ownership on a larger and more global scale, but it improves the chances for artists and content creators to monetize their work in a capital efficient manner.
Finally, we have platforms like NFTfi that offer NFT collateralized loans. By proposing any ERC-721 Token as collateral, other users can provide you with loans. Once the agreement is reached, your NFT is locked in the NFTfi smart contract and paid in ETH at the same time, and the NFT will only be returned after your loan is repaid. If you can't repay the loan, the NFT goes to the lender. NFTfi has provided nearly $4 billion in loans so far.
While this may seem simple in theory, in practice, there are some risks to be aware of. First, smart contract risks are prevalent in the industry, and hackers can steal funds or NFTs locked in contracts by identifying flaws in the code. A recent example is Poly Network, where hackers stole $600 million worth of assets through flaws in its smart contracts. Another risk is the loan-to-value ratio, i.e. the value of the NFT can fluctuate significantly, potentially using the NFT used as collateral to be worth much less than the loan amount. This risk is particularly high for long-term loans, especially given the nascent state of the industry. Finally, the low liquidity of many National Trust projects may allow them to give NFTs an artificially high floor price, as sellers do not want to sell cheap, but buyers are not motivated. This could lead to lenders mispricing the NFTs used as collateral; if the loan defaults, they may receive an NFT worth less than what they cost. In conclusion, projects like NFTfi haven’t had smart contract bugs yet, but that doesn’t mean they won’t happen in the future, and if you want to borrow money, be wary of NFTs used as collateral.
12. DeFi for encryption institutions
Organizations’ interest in DeFi also continued to rise this quarter. While DeFi applications have been around since 2017, organizations are starting to adopt the digital asset class in 2020.
This growth in interest can be attributed to the exceptional return on investment that DeFi offers and the rise of cryptocurrency custodians. Here are five factors institutions need to consider before getting involved in DeFi.
Access
There are two ways to connect to DeFi: Indirectly through a centralized cryptocurrency trading platform Access and direct access through DeFi wallets. The selection of DeFi Tokens offered by centralized exchanges is often limited compared to the latter, which provide access to a large number of DeFi Tokens and protocols. For example, MetaMask integrates with almost all DeFi protocols, providing access to more than 17,000 venues for trading, betting, lending, derivatives, and more.
Escrow
Access and risk management go hand in hand. Institutions must access DeFi in a manner that is both secure and operationally required. This requires an institutional requirement to store private keys, most commonly in a hardware security module (HSM) or multi-party computation (MPC) custodian technology and a qualified custodian.
Tracking
When cryptocurrency transactions are executed on a centralized trading platform, it is easier to track all trade. With direct access to DeFi Tokens and protocols, it is difficult to track assets, yields, and risks in one place. However, many DeFi wallets help with this by displaying these metrics directly in the wallet.
Reporting
When fund managers invest on behalf of their clients, they are required to report Returns metrics such as performance and capital gains. Since DeFi is an emerging investment space, fund managers may not yet fully understand all the jargon, conventions, technical details, and reports. This could make it difficult for them to report performance to clients.
Regulation and Compliance
For any new and innovative investment products, financial regulators It will take time to understand its scope and develop mechanisms to safeguard investors' interests. DeFi by its architecture is distributed and decentralized and cannot be regulated in a single jurisdiction. As such, it poses further challenges for regulators, with an EY report saying "its activities are not limited to individual institutions, intermediaries or jurisdictions".
Based on the above considerations, custody is indispensable especially in the cryptocurrency world where institutions participate. For cryptocurrency funds, market makers, and trading desks, there are a number of security and operational requirements that they need to meet. This is where custodians step in.
A custodian is an organization that holds and moves cryptocurrency on behalf of clients. Think of the custodian as a gatekeeper, keeping your tokens and private keys safe. In addition to holding tokens, custodians approve and facilitate cryptocurrency transactions on behalf of fund managers. In most cases, cryptocurrency funds require private keys to be kept in hardware security module (HSM) or multi-party computation (MPC) escrow technology and qualified custodians.
Thirteen, Custodians
MetaMask has recently partnered with three leading custodians. BitGo, Qredo, and Cactus Custody to ensure investors have full access to DeFi and Web3 while meeting the strictest institutional requirements. These partnerships cater to the different needs of different institutions, from small cryptocurrency startups and DAOs to multi-billion dollar cryptocurrency funds.
BitGo AUM: $40 billion
BitGo is one of the oldest cryptocurrency companies and was part of the first billion-dollar deal in the cryptocurrency space earlier this year. The custodian was acquired by Galaxy Digital in a deal worth $1.2 billion. PayPal was also rumored to have hoped to partner with BitGo, but that deal fell through. Founded in 2013, BitGo currently has over $40 billion in assets under custody. The custody company is a pioneer in multi-signature wallets and the first digital asset company to exclusively serve institutional clients.
Cactus Custody AUM: $10 Billion
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Cactus Custody is a Hong Kong-based trust company with over US$10 billion in assets under custody. It is a third-party institutional custody service provided by Matrixport, Asia's fastest growing digital asset financial service platform. Cactus Custody provides miners, corporations, funds, and projects with cold and warm storage, enterprise cryptocurrency management capabilities, and DeFi access.
Qredo
One of the features that distinguishes Qredo from other peers is that it uses multi-party computation (MPC), which enables Qredo to conduct transactions without the need for private keys. This feature makes transactions on Qredo more secure, as the risk of private keys being compromised is eliminated. Qredo supports institutional sizes ranging from small cryptocurrency funds to global asset managers who are very active in their DeFi yields. Its Layer 2 blockchain also enables seamless and low-cost access to a growing ecosystem of cross-chain transactions and liquidity opportunities.
Case Study: Aave Arc
In Q3, cryptocurrency custodian Fireblocks proposed A proposal for the Aave governance community to approve Fireblocks LLC as a "whitelist" for one or more deployments of the Aave Arc, allowing its appointment, adoption, and delegation.
Whitelist is a gatekeeper for Aave Arc users, referring to KYC/KYB checks on users, allowing users to access with appropriate disclosures, terms and conditions, And the process of granting specific permissions (e.g., borrow, supply, liquidate) to a user-provided Ethereum wallet address.
If this proposal is passed, Aave will be an institution with strict regulatory requirements Investors are provided with access to DeFi protocols. The permissioned solution will provide private pools, with no borrowers or lenders, and only participants who pass KYC/KYB will be able to access the pool. Institutional investors must consider a risk-based compliance process when investing in DeFi. In order for a custodian to be whitelisted by Aave Arc, it needs to meet certain conditions. (a) is a licensed/registered entity in the jurisdiction in which it operates; (b) complies with KYC/KYB principles in accordance with FATF guidelines; (c) is required to adopt and has adopted strong anti-money laundering/anti-terrorist financing compliance program.
One of the potential problems is the difference in yield between permissionless and permissioned pools. Private pools may end up with different rates of return than public pools due to restricted participation. However, participants who have access to both private and public pools can exploit differences and market failures, which help ensure that private pools maintain similar interest rates.
Fourteen, Metaverse
In Neil Stephenson's 1992 science fiction novel In "Avalanche," the "metaverse" officially enters the public consciousness as a term he uses to describe virtual reality-based internet connections. The term has been used to describe the concept of a future iteration of the Internet, consisting of persistent, shared, three-dimensional virtual spaces linked into a perceivable virtual universe. If you want to experience the "metaverse" for yourself, you can check out ConsenSys' Decentraland in the Ethereum world.
One of the most obvious examples of the Metaverse in the context of blockchain is the concept of Play to earn. Back in "Age of Empires," the traditional game model was simple: consumers had to pay a fee in exchange for a "game" experience. While money is usually required to play Metaverse games, the revenue model is constantly evolving.
As Facebook changed its name to Meta, the term was increasingly misused, but the idea of Web3 is that items you can collect in a virtual world can be Tokens built on decentralized protocols move to other virtual worlds. Let's take a deep dive into the Metaverse space and add some color to it.
Fifteen, Play-to-earn games
In the third quarter, Play-to-earn games had a huge growth. The most prominent ones are Axie Infinity, ZED Run, Sandbox and Yield Guild Games.
Axie Infinity creator Sky Mavis has raised $152 million at a valuation of nearly $3 billion. Axie Infinity is a blockchain game where players collect Axies that can fight, perform quests, and breed to create more Axies of varying value and rarity.
However, the ultimate goal of the game is to obtain SLP (Love Potion) Token which can be sold. The Axie Genie itself can also be traded as an ERC-721 NFT. In the third quarter of 2021 alone, Axie Infinity earned more than $720 million in revenue through NFT transactions.
Axie Infinity currently has over 300,000 daily active users (DAUs), growing more than 30 times since the beginning of the year. Additionally, their Discord has grown parabolicly, making them one of the largest Discord servers in the world.
Axie Infinity in July Monthly revenue of more than 23 million US dollars, double the income in June. Axie Infinity made just $100,000 in January. This informal market has grown into a formal game of making money and making a living. Users in the Philippines are quitting their jobs to earn 10x their income playing Axie.
YGG recently released their financial report in which they list new partnerships, scholarship updates, and their investment example of the game. All of these games focus primarily on NFTs of assets that can be manipulated, loaned, traded, and sold. There's a short documentary showing how the gaming money-making economy has grown and changed the lives of those involved.
One of the most developed virtual worlds in the Metaverse is Decentraland, a world created and owned by users. In this place, users can create an avatar, interact with friends and strangers, build a house on your own digital land (called LAND), or just check out art exhibitions. To start building a house, people can buy a piece of land in Decentraland or buy it from someone else. Like real-world real estate, the better the location, the higher the value, with some parcels fetching as much as $900,000.
The world itself is powered by NFT, which makes up most of the items in the world, From the land to the clothes the characters wear. In fact, this world serves as the cornerstone of the future virtual world, allowing users to make money by creating services. Currently, the median price of Decentraland NFTs is almost $5,000, with average weekly sales totaling $772,000 in Q3, averaging 300 sales.
Loot was another standout NFT project last quarter. At its core, a Loot consists of a unique inventory of items you'd expect to find in the game. But the problem is that this NFT has no item specifications, appearance or characteristics other than what your imagination can piece together. This genius concept sparked a community reaction to the loot bag, and its price began to skyrocket. Community members flock to create artwork for these items and spin-off items like "Loot Realms," where adventurers can take their loot gear and explore.
This is actually an improvisation of NFT, where community members work together to build a virtual world limited only by their coding abilities and imagination. This is disruptive because it sets the scene for future metaverse builders. Through collective contributions, we can build the most diverse and complex worlds from the smallest starting points.
Sixteen, smart contract audit
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Smart contracts hold a large number of digital assets. As with anything that holds value, its inherent risks must be mitigated at every stage of development. In addition to constantly securing your own smart contracts, smart contracts that interact with other smart contracts (external calls) must also be secure.
Once the first iteration of the smart contract is deployed, the development cycle does not stop. A continuous security strategy can ensure that smart contract operations are well protected and avoid loopholes.
Unaudited protocol list
The third quarter witnessed the largest two hacking attacks. Both networks are unaudited after the state change.
On August 10, the largest cryptocurrency hack ever occurred on the Poly network, with over $611 million stolen. In an interesting twist, the hacker returned the vast majority of the funds ($578 million) and was hired as Poly Networks' chief security advisor.
Compound lost $147 million on September 29th because they did not perform a safety check on their updated Compound controller. Of course, this could have been avoided with constant security checks.
ConsenSys Diligence has multiple layers of smart contract security, facilitating continuous security checks on smart contracts.
Check Frequently
Smart contract developers want to minimize risk and maximize productivity change. Using a security layer minimizes the risk of being hacked from the very beginning of the smart contract development cycle, as issues are addressed as soon as they are discovered.
This will in turn maximize productivity and the possibility of not rewriting smart contracts. Prevention is better than cure, especially when millions of dollars are at stake. ConsenSys Diligence provides security tools for every step of the development cycle.
MythX is an automated security analysis Tools that enable static analysis, dynamic analysis, and symbolic execution. It finds known vulnerabilities and generates a detailed report that includes a summary of all issues, including where they can be found. MythX is the first layer of your security strategy to find vulnerabilities in your smart contracts. It has the lowest barriers to entry, as all you need to do is create a free account on the MythX website to get started. It can be used continuously throughout your development cycle. Using an automated, readily available tool like MythX will eliminate avoidable vulnerabilities and maximize productivity by preventing smart contract rewrites at a later stage.
Seventeen, start using Web3
MetaMask is a Entrance to cryptocurrency wallets and blockchain applications. Trusted by 20 million monthly active users worldwide, you can start exploring decentralized applications in seconds. Available as a browser extension and mobile app, MetaMask equips you with everything you need to manage your digital assets, including a keystore, secure login, token wallet and token exchange. MetaMask provides the easiest yet most secure way to connect blockchain-based applications. You are always in control when interacting on the new decentralized web. MetaMask generates passwords and keys on your device, so only you have access to your accounts and data. You can choose what to share and what to keep private.
In recent months , the global NFT market has become an important and growing segment of the digital asset market, with a total transaction volume of $370 billion. At ConsenSys, we leverage our deep understanding of the NFT market to build an optimal NFT experience for your lifestyle, sports and gaming organization. Check out our NFT solutions.
Consensys was established by Ethereum COO Joseph Lubin in 2014, with Ethereum as the core It is a comprehensive service company with multiple sectors such as development and enterprise services. It owns several major technical sectors such as Ethereum’s largest wallet metamask, smart contract development framework Truffle, API service Infura, and enterprise-level blockchain solution services. It also covers blockchain Chain users, public chain ecological developers, and enterprise-level customers have three dimensions, and each dimension has been recognized by the market.
A&T Capital is the leading early-stage blockchain fund with team members located in Germany, Singapore and the United States. The founding partners have invested in projects such as Algorand, Avalanche, Ethereum and Polkadot .
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