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Look to web3 history for future directions

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Industry review and personal outlook

原文作者：@web3fox

Image credit: Fox Index

Since the beginning of 2020, the market value (USDT+USDC+BUSD) has increased from 4.6B to 139.6B.30 times.

The overall market capitalization of cryptocurrencies increased from 191B to 950B.Five times.

The peak time point is now on November 9, 2021, the market value is 2937B.

There's an internal logic behind every inflation. It must be that one or a class of needs is met to get positive feedback on funding.

This paper hopes to review the historical development and find the internal logic, so as to provide more adequate ideas for the development of the next cycle.

See the end, may be able to provide you with some new ideas for investment, entrepreneurship, also welcome investors, entrepreneurs and I contact.

If you have a contribution channel from foreign media, please contact me. I hope I can translate the manuscript into English and contribute to foreign media.

Remark:

1. The market value of USD mentioned above refers to the market value of USDT+USDC+BUSD. The set of the three covers more than 95% of the market value, so approximate statistics are made here.

2. The statistical deadline is June 28, 2022.

3.312 refers to the plunge event on March 12, 2020, caused by the liquidity crisis in THE US stock market.

Liquidity shortage from January 2020 to June 2020 & AMP; bulge

After the global epidemic, the LIQUIDITY crisis in the US stock market and the 312 stock market crash, countries around the world have printed money to stimulate the economy.

Against this backdrop, money around the world is looking for value. And the blockchain industry, at that time, was the choice of the smart few.

From the chart, we can see that from March to November, the capital of the blockchain industry increased rapidly.The market value of USD jumped from 5B to 20B.

During this stage, lending agreements represented by AAVE began to explode, while decentralized trading platforms represented by Uniswap began to explode.

Time background

When Uniswap was not widely accepted, project partners wanted to provide liquidity by paying high fees to centralised trading platforms.

The emergence and widespread use of Dex killed CEX at the time. At that time, all the trading platforms were fooled by the market and launched their own public chains and corresponding DEX protocols.

As soon as Uniswap was recognized, fork was inevitable, resulting in DEFI Summer for 20 years.

In one fork product, Sushi came up with a one-click transfer of liquidity and was the first to issue coins, thus standing out from the imitators.

Curve consolidated its position by coming up with a new approach to block trading based on Uniswap's characteristics and addressing additional requirements.

Good project, certainly not follow the trend of hot spots and wind, in the early selection of the track, continue to work.

Perhaps made, will not be accepted by the market, but also need to be able to endure loneliness.

case

Axie Infinity

On March 13, 2020,AXS opens the trailer, and after eight months of development, began operation.

The currency will be issued from November 2020 to June 2021. Over the past six months, in the weak market hot spot, finally recognized by the market, ushered in their own highlight moment.

AAVE(ETHLend) & MANA

AAVE After a period of hibernation (4 years), the loan of China has reached its peak in the context of changes in the market environment.

Also out of the body of a cycle of projects.DecentralandIt is also in this way ushered in the great wave of the meta-universe.

The last wave of so-called star projects, in the tide of The Times, slowly come to an end.

From December 2020 to May 2021, Musk entered the company & AMP; SHIB outbreak

In the blockchain industry because of DEFI and continue to soar, caused more and more capital attention. Musk, as the new richest man in the world, is undoubtedly the most eye-catching.

Musk, through Twitter, has let more people know about blockchain. Doge, the market value of USD at this stage changed from 20B to 30B.

It is no exaggeration to say that he alone let the market 10 billion dollars of capital into the blockchain. Compared to Musk's billions, his personal influence is enough to make the capital market crazy.

By publicly calling out Doge, Musk's influence is reflected on Doge. And he built a position early in the bottom, through Doge to realize his influence in the blockchain industry.

Reference picture mark [1]

SHIB at this time, under the impetus of some blockchain users, crazy rub Musk's heat, Shouting out the speech of feeding dog shit.

SHIB, shit currency, this air currency in the community to promote, in the context of retail investors fed up with the capital and project side jointly cut leek, with the hands of the capital crazy buy SHIB.

From January 2021 to May 2021, the whole market is enveloped in the SHIB boom environment, the increase in demand makes more capital injected from outside the blockchain market.

BTC, ETH and the whole market, are in this background, rapid price bubble.

SHIB's landing on Binance is the last glory of blockchain token. After the market digested this hot spot, the funds on the market have no new hot spots and stories can be hyped, the price quickly fell back.

Refer to picture markers [2]

The market value of USD ranges from 23B to 93B

June 2021 -- September 2021 GameFI outbreak

In SHIB heat faded, the whole market presents a cold background, the market funds spontaneously looking for new hot spots and value depression.

At this time, Binance's AXS was launched in November 2021. With stable data and relatively reliable economic model, it led the market to usher in GameFi explosion.

Due to the explosion of the gaming ecosystem, Terra, Solana and other public chains are simultaneously developing similar projects, absorbing large amounts of capital at the same time, and the price has skyrocketed.

Refer to picture markers [3]

The market value of USD increased from 93B to 114B

October 2021 -- November 2021 Meta Breakout & AMP; SHIB on Robinhood

Because Facebook has hit a wall in its own business, it hopes to use the concept of the blockchain metasomes to give the capital markets a new story.

With Facebook changing its name to Meta, a $400 billion-plus company has added another $10 billion to the blockchain market.

This has led to new high valuations of MANA, SAND, GALA and other meta-universe companies.

Refer to picture label [4]

In addition to Meta's name change, SHIB's landing on Robinhood is a new breakout.

I thought SHIB's landing on Binance was already the highest land acquisition in the blockchain industry. Unexpectedly, the American WSB leeks took SHIB to new heights.

At the same time, new funds have been added to the market. What is important is that such funds are not additional funds issued by USD, but real working funds in the hands of retail investors.

In this period of time, the market ushered in the highest value of capital, 2937B.

Refer to picture label [5]

USD's market cap increased from 113B to 126B

December 2021 -- March 2022 NFT boom and Vampire of the Ape Universe

After the end of the metaverse concept, NFT took over the hot banner of the market.

Because the NFT market is peer-to-peer, it is illiquid.

At the same time, the NFT market, the identity value of the profile picture alone and the community of people of the same type cannot bear the imagination space of the market, resulting in the market decline.

After that BYAC air drops APE during, the transient prosperity that causes. Then it went down rapidly.

Refer to picture markers [6]

After APE drops, the land auction of APE universe further squeezes ETH liquidity.

On May 9, 2022, Terra was hit by a massive mine. Liquidity dried up

Most people may have noticed that The Terra Explosion happened at 21:00 on May 9, 2022, but the supply of USD in the market began to tighten a few days ago.

Since April 3, 2022, the market value of USD has gradually shown a downward trend.

The Fed announced in February that it would raise rates in March, May, June, July, September and December by a total of 150 basis points. Previously, it had expected five rate increases for a total of 125 basis points.

What is more frightening is that since the Federal Reserve announced the interest rate hike, the market value of USD, the entire cryptocurrency, has not increased, in February, March, April maintained around 150B, may began to gradually decline.

Fed Hikes Rates in The Correlation between Money supply and Market value

Influenced by the Fed's interest rate hike, USD's liquidity only withdrew 2.7 billion dollars, and then Terra collapsed under the joint stranglehold of multiple forces.

And UST's thunderbolt accelerated the liquidity drying up of the whole market, comparable to 312 events.

In the chain reaction caused by UST, USD's market value decreased by USD 8.84 billion.

However, behind the decrease of these funds, THE market value of BTC decreased by 247B, or 38%; ETH market value decreased 158B, down 52%;

UST involves Defi protocols on the chain as well as on-site and off-site financial management of institutions. In the context of deleveraging, financial institutions and other Defi project parties represented by 3AC, BlockFI and Celsius have become thunderous.

Summary from the beginning of 2020 to present

Image credits: Fox Index

If you look at the picture again, you might have a different feeling.

The development of blockchain to the present, from the initial response to global currency overissuance, to how to use the funds left in the blockchain market.

Numerous project parties, individuals and investment institutions have given their own answers or choices.

In the face of hundreds of billions of dollars retained and the entire cryptocurrency market of trillions of dollars, how to effectively solve the needs of users, create new demands, and transform the real world may be left for all of us to think about.

As you can see from the Fox Index chart, every time a new demand is met, a flood of money comes in and the overall market value increases.

USD can only serve as lubricant and catalyst for demand, but cannot be the cause of demand.

Fork is difficult to create real value, because the project is behind the people, excellent project is behind the efforts of excellent talents.

The sharp rise in price and market value is a positive feedback to excellent projects after they meet the market demand. However, these feedbacks are not timely and the market always lags behind.

Due to the immaturity of the market, there is a lag effect, so that investors who can find these excellent projects in advance can profit from the time difference in the market.

thinking

When the entire cryptocurrency market has grown to a trillion dollar market cap, how can we achieve further high growth?

How to find a new breakthrough in the incremental market, how to build their own projects in the bear market stock market?

Humans are a curious species, and every once in a while someone comes up with a good idea. Others have built on this idea and improved their own solutions. Over time, wonderful tools and systems have been developed. Some of these tools make it easier for people to generate new ideas. The great wheel of invention, which had moved very slowly in the early days, gradually began to speed up, and man did things that had seemed magical in the past.

Self answer

In the blockchain market,Vitalik ButerinIs always different existence. While he's not the biggest beneficiary of Ethereum, he and the Ethereum Foundation behind him continue to make incredible contributions to the ecosystem.

The profound impact of this pattern determines that the entire Ethereum ecosystem will go a completely different way from other so-called public chains.

In the paper on May 11, 2022, he proposed to find the soul of web3 era and build a decentralized society.

This direction may be the general direction of the next cycle, innovation in the financial sector, there is always a ceiling.

And the decentralized restructuring of social, economic, cultural and political fields can accommodate more capital.

From the point of view of the paper, to interpret and think, maybe we can find a new direction. I will focus on the interpretation of literary theory and then give my own understanding.

The direction of entrepreneurship in the next cycle & NBSP;

DeSociety, Web3, Soul

The goal of a decentralized society is too ambitious, this is not a project, a public chain can solve the problem.

Entrepreneurs want to think about, how to start with the small, to meet the market's new demand points.

Web3 is a concept of scope, while Soul is relatively specific and still the most central concept in God V's 37-page paper.

Let's focus on Soul.

My chosen entrepreneurial direction

Our society is operated by human subjects, and the essence of all phenomena is the collective embodiment of human beings.

Each of us can be understood as a Soul, or Soul is our carrier in the blockchain industry.

My understanding of Soul contains the following information:

1. Blockchain address, assets on the address and operation track on the address owned by each person

2. Information that each person has in the real world that cannot be tampered with or modified and must be kept on record

Soul is the link between the blockchain world and the real world, containing both block information and real identity information.

The activity track of each of us on the chain, combined with the events in the corresponding time period, has a profound indication of what kind of people we are.

They are not only the witness of asset changes, but also the evidence that we can find people with similar ideas. After all, how much money we have is one thing, and what kind of thinking logic is another.

The ability to distinguish people by their movements on the chain is far more significant than the NFT head. After all, it's hard to tell what everyone says from what they say; What each person does is the most real.

Based on authentic historical data analysis, we can ensure that each Soul, and the individual behind it, creates a authentic personal brand.

This is the foundation of a decentralized society. Soul covers more nuanced areas such as privacy, diversity, and group decision making.

All these need real data as the support, real, effective and untampered data, is the metadata of a central-less society.

Sifting through the real data needed to build Soul, we aim to be an important reference source and standard for all project parties to evaluate Soul and distribute SBT.

This direction, which takes a long time to filter, evaluate and label the underlying data, belongs to the same data analytics track as Nansen. Ai.

It's a very hard job, dealing with the whole chain of data, twitter, Telegram, Discord, Website, all dimensions of data.

Some investors may feel that the project is too heavy for a small team to implement. But there are certain directions, certain things that are meant to be done.

In the whole blockchain world, the influence and status of Chinese are gradually shrinking, and there is not a project that can be taken.

The path I chose is really a project to lay a solid foundation for the Soul of Desociety, Web3 era, as conceived by VitalikButerin.

Hope interested investors can contact me, Telegram: Web3Fox

Here is the first article I wrote. After reading it, maybe you will know more about me.