Summit AscendEX 2021 Annual Summary
At the beginning of 2022, Summit AscendEX hopes to review with you the amazing development of the cryptocurrency industry in the past year, as well as the application and evolution of cryptocurrency around the world. As a cryptocurrency trading platform connecting the CeFi & DeFi fields, AscendEX has become a solid link between users, institutional investors and DeFi protocols. Thanks to this, we hope to review some data and information related to the development of the encryption industry in the past year by combining the development highlights of AscendEX in the past year. At the same time, we hope to share with you our views on the future development of the encryption market through our unique insights into market conditions and trends.
Market Highlights
The cryptocurrency market has taken a "leapfrog" over the past year style" development. Although the group supporting it is still largely composed of innovators and early participants in the encryption field, it has already gained a lot of attention from the mainstream in terms of NFT and payment. There is a lot of confidence that “this is the way of the future” and that this nascent asset class is here to stay.
Based on the rapid increase in the scale of institutional participation, the growing maturity of emerging Layer1 public chain networks, and the extensive integration of Dapp and virtual reality, crypto market participants firmly believe that The encryption industry will shape a new world pattern in the future.
Institutional participation
As people’s awareness of cryptocurrency upgrades, large-scale institutions The wave of participation in blockchain construction has also followed. One of the proofs is that traditional capital market participants are actively buying encrypted blue chips. These assets have obviously become part of their macro-level and technology investment portfolios; Public encryption investment vehicles including ETP and listed companies have gradually added Bitcoin to their balance sheets; in the private equity market, venture investors have raised huge amounts of funds and have begun to deploy in the encryption field. Today, the amount of investment entering the crypto space has set a new record.
In the third quarter of 2021 alone, venture investors deployed about $8.5 billion on cryptocurrency startups, the largest quarter ever in the crypto space investment amount. Today, many venture capital firms have billions of dollars in crypto assets under management. This investment trend clearly accelerated in the fourth quarter. In addition, the number of encrypted unicorns will surge to more than 60 in 2021, covering trading platforms, infrastructure companies, game companies and other tracks. Venture capital companies always make capital investment around the development of talents, and similarly, talents will also move closer to the center of capital. This forms a reflective closed loop and a broad pool of talents, and gradually promotes the development of the entire industry.
Enter the multi-chain world
At "2020 DeFi Summer" Since then, attention and innovation around DeFi have shown explosive growth. This type of growth has mostly happened on Ethereum. Just a year ago, Ethereum represented 97%+ of the total value locked (TVL) of all crypto projects. In a year of development, emerging public chains and DeFi protocols have matured rapidly, forming a pattern of coexistence of multiple interoperable blockchains today.
Ethereum's TVL share is around 65% today. Although Ethereum still dominates, the landscape of the crypto market has long been very different from 2020. The overall liquidity on the chain is showing an increasingly fragmented trend, and many alternative EVM and compatible non-EVM blockchains are vying for the spillover value of Ethereum. The high gas fees caused by insufficient block space in Ethereum, and the increased demand for block space have also led to a large-scale appreciation of the L1 alternative ecology. Therefore, investors, users and developers are gradually realizing that multi-chain parallelism has become a future development trend. Despite this, the development of multi-chains today still lacks the support of infrastructure and interoperability solutions. Therefore, the multi-chain structure still needs time to develop, and we must also be alert to the fragmentation of different ecosystems.
As a pan-chain platform, with the development of the multi-chain world, Summit AscendEX will continue to provide support for the diversification of L1 ecology and applications.
Liquidity war
Although interoperability has It helps to tightly integrate the multi-chain world, but the fact is that interoperability also promotes the intensity of the battle for liquidity of various L1 and decentralized applications. Liquidity comes from the attention and assets of developers and investors. With the emergence of competition between L1 and L2, liquidity will be the hottest commodity among protocols, and each protocol will provide more and more unique incentives to attract liquidity.
However, given the profitability of DeFi liquidity providers, TVL is actually a low-performance protocol evaluation benchmark.
For example, the main driving force for different L1 TVL changes comes from more than a dozen developer foundations including Polygon, BSC, Avalanche, Harmony, Fantom, etc. (or more) Ecosystem Funds. Changes in TVL have occurred countless times in 2021 in the following way: L1 or L2 network bootstrap capital to launch an "ecosystem fund" that is used to fund developers building applications on their chains and provide liquidity to native protocols of users provide rewards. The original intention of most eco-funds is to solve the "chicken and egg" problem at the same time-providing funds for builders and providing rewards for users. Protocols that implement liquidity mining to bootstrap liquidity are beginning to realize that financial incentives alone are not enough to bridge the gap between speculators and users. After the liquidity mining program ends, the phenomenon of profit recovery (total locked value outflow) drives innovation in the way of attracting liquidity, including the liquidity held by the agreement, which will be discussed in the "DeFi 2.0" section below .
While TVL has become a popular metric for measuring the success of a DeFi protocol compared to the broader ecosystem, there are still some pitfalls and limitations to this approach sex. TVL is simply the total dollar value of collateral deposited to a given network (Ethereum, BSC, etc.) or application (UniSwap, AAVE, etc.). Since collateral assets are transitioned from one protocol to another in a dynamic form. As a result, DeFi native currency markets tend to double-count liquidity.
Let’s take the situation described by CoinMetrics as an example:
A user deposits $1,500 worth of coins into Maker After Wrapped Ether (WETH), you can get a loan of $1,000 in DAI (150% collateralization ratio).
The user then deposits this newly minted DAIToken and another USDC worth $1,000 into the Uniswap V2 USDC-DAI pool. In return, users will receive LPTokens, which represent a stake in the pool’s liquidity worth $2,000.
Then, after depositing these LPTokens into Maker again, the user will be able to obtain another DAI loan (102% collateralization rate) worth $1960.
In short, the flexibility of most DeFi applications makes it easy for assets to be re-hypothecated and double-calculate TVL across multiple protocols. Although TVL is used as a benchmark for comparison between protocols at a certain time, the ease of leasing liquidity redemption, and the rapid change of TVL in DeFi in the case of falling yields proves that TVL does not reflect the entirety of protocol liquidity. Condition.
DeFi 2.0
In the last quarter of 2021, we see many DeFi 1.0 going The TVL growth of centralized application blue chip stocks is flat, such as MakerDAO, Curve, AAVE, Compound, etc. While they won’t disappear anytime soon, we think the next wave of growth in DeFi will come from the newer and more innovative DeFi protocols that have emerged over the past year, the so-called “DeFi 2.0.” Leading this new wave of DeFi protocols are innovations in which liquidity is controlled by the protocol. The protocol control value (PCV) pioneered by the Fei protocol enables the protocol to control the assets locked in the protocol, rather than a single liquidity provider. Instead of collateralizing assets for loans or renting out assets for yield, PCV allows users to sell assets to the protocol itself. Over the past year, Olympus DAO has been at the forefront of this innovation by incentivizing users to tie their assets to the protocol in exchange for OHM, a non-pegged collateralized reserve currency. It is undisputed that OHM has become by far the most forked DeFi protocol, and we are also paying close attention to this area. More importantly, we are excited about the prospect of bond liquidity in emerging and existing cryptocurrency projects, as it will mitigate the adverse effects of profitable liquidity.
Other developments
In addition to the above 2021 headlines In addition to hot spots, Summit AscendEX has also been closely watching the development of other major events. Everyone should have their own opinion on the depth of the market, here we mainly want to briefly highlight the important development trends in the future.
NFT —— Although the first NFTToken standard ERC-721 was created in 2018, in the past year, NFT has been widely regarded as A major disruptor in digital ownership. Starting with JPEGs and profile pictures, the NFT market has grown rapidly and now encompasses a wide range of applications. Although the current NFT infrastructure is still in its infancy, they have successfully penetrated mainstream culture. This level of rapid development suggests that they will continue to develop in 2022 and beyond, and become a major contributor to value creation in the cryptocurrency economy.
Play2Earn&Metaverse —— Play2Earn games like Axie Infinity fit very well with the product market, Until now, the Play2Earn market has accumulated millions of users, which allows users to earn money while playing. This development trend has also spawned game guilds like Year Guild Games, which gather talents and share revenue. Crypto-native Play2Earn-like games are innovating with economic incentives — this could be the start of a whole new trend that will drive non-crypto-native game companies to build and integrate crypto elements into their games.
Web 3.0—— In the past year, the cryptocurrency industry has undergone the greatest rebranding ever, slowly becoming a more Part of the larger Web 3.0 world. Web3.0 is the next generation of the Internet and the future of the Internet. Everything in Web3.0 is based on the concept of decentralization, permissionless, owned by users and builders, and connected by Token.
Major protocol upgrade
This year, both Bitcoin and Ethereum have undergone two major upgrades —Taproot and the London Hard Fork upgrade (London Hard Fork), both upgrades are important milestones in the life of Bitcoin and Ethereum.
Taproot is the latest upgrade to the Bitcoin network, and the most significant in four years. It makes complex multi-signature transactions possible, and makes transaction verification on the Bitcoin network faster and easier. The upgrade also scrambles single-signature and multi-signature transactions together, making it more difficult to identify inputs for transactions on the bitcoin network.
The London hard fork upgrade is an upgrade to the Ethereum blockchain, including five Ethereum improvement proposals including EIP-1559 (EIP). EIP-1559 redesigns Ethereum's fee market by using a hybrid system of algorithmically determined base fees and optional hints. In the past, transactions on the Ethereum chain used the first-price auction model, and the highest price won. EIP-1559 aims to remove this uncertainty by precomputing a block's base fee based on the degree of congestion. Another notable improvement in EIP-1559 is the introduction of variable block sizes. In addition, through EIP-1559, a portion of each transaction fee on Ethereum will be destroyed, introducing a deflationary mechanism for the Ethereum Token economy.
Despite the size, value and degree of decentralization of the Bitcoin and Ethereum networks, as the broader ecosystem continues to innovate rapidly, They have proven themselves to be resilient while maintaining the ability to improve and upgrade.
Extended solution
In addition to the above protocol upgrade, Scalable solutions for alleviating the shortcomings of on-chain transactions also emerged as a key theme in 2021.
Lightning Network (Lightning Network) is one of the preferred Bitcoin scaling solutions, which enables transactions to be carried out outside the chain through state channels. began to grow exponentially. While the Lightning Network mainnet launched in 2018, 2021 is the year it sees breakthroughs in terms of adoption, channel count, and capabilities.
On the Ethereum network, many scaling solutions are already live, including solutions using Optimistic Rollups, ZK Rollups, Validium and Plasma The growth of the Layer2 network of Fangfang, and successfully gathered billions of dollars in TVL. While the L2 Optimistic Rollups-based Arirum project retained the top spot with over $2.5 billion TVL and a 41% market share, ZK Rollups scaling solutions are increasingly being used. Today, 4 of TVL's top 10 scaling solutions use ZK Rollups, 4 use Optimistic Rollups, and 2 use Validium. As various scaling solutions mature and develop, we expect more and more centralized and decentralized players in the cryptocurrency ecosystem to start using these solutions. Even if the merger of Ethereum and the sharding and transition of ETH 2.0 are coming, the continued growth of alternative L1 public chains and the development of L2 solutions will continue to squeeze the development space of Ethereum. We expect the dominance of Ethereum L1 to decline in the future.
DAO (Decentralized Autonomous Organization)
While opinions still differ on the exact role the DAO will play, it is clear that it will continue to evolve and gradually build a future of distributed collaboration. Most DAO tools are still primitive, non-integrated, and in more cases off-chain, with issues such as extreme voter apathy. Summit AscendEX has been paying close attention to how the DAO user interaction and participation experience will be improved in the future, especially in terms of the innovative D2D (DAO-to-DAO) business model.
Sturdy incumbents
In a very short time, we have let cryptocurrencies be ignored mainstream institutions and enterprises are gradually embracing a new paradigm. Incumbents in technology, finance, gaming, music, and more have embarked on strategic moves to facilitate the Web 3.0 paradigm shift. Facebook changed its name to Meta; financial technology and traditional financial companies accelerated the integration of encryption tracks; game companies recognized the importance of Play2Earn. All these indicate that enterprises have begun to speed up their competition for their respective markets. Each of these companies will face its own innovation dilemma as they set out to disrupt some of the business models in their respective fields. The question of who will make the transition to the crypto economy successfully, and who will lose out to the crypto-native upstarts, remains to be answered.
Year-end review: the development highlights of AscendEX
AscendEX is outstanding in the field of IEO Known for its performance, we are committed to fulfilling our mission as a trading platform, providing platform users with early opportunities to participate in some excellent ecological projects. The main auction and currency listing projects include Persistence, Bonfida, O2, Jet Protocol, etc. Through the IEO of AscendEX, these projects can obtain sufficient liquidity and obtain efficient price performance. At the same time, this has further consolidated AscendEX's good record in screening excellent projects. According to the historical data of all IEO projects, the current return on investment of AscendEX is 832%, and the average ATH (all-time high) return on investment is 4714%.
(Note: The current return on investment is calculated based on the market value on December 17, 2021)
AscendEX financial management
Integrating projects directly into the underlying infrastructure of the centralized trading platform (pledging, lending, etc.) One of the most powerful tools AscendEX provides for listing projects. In the summer of 2021, Summit AscendEX launched a comprehensive profit portal to help users obtain high-yield opportunities in DeFi efficiently and safely. Through AscendEX financing, users can participate in DeFi to make profits without directly interacting with the Web 3.0 protocol itself. With AscendEX financing, the complexity of DeFi is abstracted, allowing users accustomed to centralized exchanges to seamlessly benefit from subtle and complex DeFi innovations. With the rise of decentralized exchanges, Summit AscendEX is excited to seamlessly integrate with the infrastructure of decentralized exchanges. This enables it to provide users with a unified access point to help them easily enter the wider DeFi ecosystem and participate in the DeFi protocols in the ecosystem.
Milestones of AscendEX
In addition to the exciting IEO and coin listing projects In addition to product launches, Summit AscendEX has also achieved some key milestones in the past year. We have been working hard to scale and mature our platform. In March 2021, the BitMax brand name was officially upgraded to AscendEX, demonstrating our ambition and goal of striving to build a world-leading digital asset trading platform to connect CeFi&DeFi and the Eastern and Western encryption markets. In November 2021, Summit AscendEX announced the completion of a US$50 million Series B financing. This round of financing was led by PolyChain Capital and Hack VC, and Jump Capital and Alameda Research also participated in the financing. Soon after, Summit AscendEX ushered in its 3rd anniversary.
As AscendEX has grown into a comprehensive financial service provider, we are doing our best to support various innovations. We are excited that this vision is gradually becoming a reality through our various activities, including Polkadot slot auctions, second-layer network integration, and many more IEOs!
About AscendEX’s recent security breaches:
Following AscendEX’s hot wallet security breaches Since then, we have been working tirelessly to make the right decisions for our customers to limit losses and get back to normal business as quickly as possible. We always regard 100% compensation for customers' losses as our top priority, and the platform's trading, betting and mining operations were not affected during the incident until we can safely reopen deposits and withdrawals.
Cryptocurrency also has good and bad sides, but we believe that difficult times are critical moments to test the capabilities of an institution. We are very grateful to our partners and customers for their full support and their help in the first place. We see this event as a great opportunity to practice the platform's fundamental values of transparency, resilience, and integrity. In 2022, as a global platform, we will continue to strive to achieve the next stage of development, and at the same time, we are also looking forward to the development prospects of the platform after further strengthening user trust.
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