Messari Annual Encryption Report, Top 10 highlights summary

Original title: "Read through Page 157 of Messari's Annual Encryption Report, and I have summarized ten highlights"

Original article by Lou Kerner

aididiaojp.eth, Foresight News

Messari2023 Cryptocurrency Paper of the YearAt 157 pages, while slightly reduced from 2022's masterpiece, it is still one of the industry's most impressive overviews of the crypto ecosystem and a must-read for any crypto enthusiast.

While Messari has a research team of about 200 people, a threefold increase from 2020, the report was written in the first person by co-founder and CEO Ryan Selkis. I've been a fan of Selkis since January 2020, and he gave a talk at CryptoMondays NYC, which was rightCrypto Theses 2020 discussionandThe story of the Mt. Gox hackFascinate us.

The longest chapter in this year's post is "Top 10 Trends in Cryptocurrency Policy," but each chapter is full of insights. The report offers a comprehensive look at the current state of cryptocurrency and its predictions for 2023:

As detailed as the report is, few people will read all 157 pages. Here are the most interesting ideas I found in each of the report's 10 excellent chapters.

Chapter 1 "Top 10 Narratives" Highlights -- crypto is inevitable

While "long-term builders may be temporarily hurt by market volatility, they are not the ones perpetuating fraud or defrauding investors," Selkis noted. While there is currently less liquidity in the industry, Web3 continues to attract some of the world's smartest people, leveraging a growing amount of critical infrastructure to change the world:

Selkis repeated the oft-quoted claim that, in many ways, it's easier to build in a bear market than a bull market. Or as Brock Pierce puts it: "Bull markets are full of crap, bear markets are full of fruit."

Chapter 2 "Ten Most Noteworthy People" highlights -- CZ

Last year, I chose "WAGMI" as the crypto character to need extra attention, a poor choice in hindsight, as many of us (e.g. FTX, Terra Luna, Three Arrow Capital, BlockFi, Celsius, Voyager...) None of them worked. I chose CZ this year, and not just because I talked to him at the Paris Blockchain Week.

It is because, after the demise of the FTX, Binance now accounts for 75% of global physical trading volumes. Binance, however, is "operating in a fluid grey area within an epic jurisdiction". So I am watching CZ, like many others, to see if he is a benevolent dictator or if he will be the same as SBF and Do Kwon.

Chapter 3 "Top 10 CeFi Trends to Watch" Highlights - Agencies are Coming

Ryan wrote: "This is the part of the report where I pretend to care about agency encryption for a minute." I knew they would come eventually.

But institutions are a lagging indicator of where the crypto space is, not a leading indicator. When the inevitability of cryptocurrencies becomes clearer and the timing more certain, institutions will not lead, but follow.

Chapter 4 "Top 10 Trends in Cryptocurrency Policy" highlights -- Tornado Cash and OFAC

In the introduction to the report, Ryan writes: "There is a certain amount of anger in writing this report. Bad actors are getting all the market attention this year and holding back the good actors, whose progress over the years may be ignored by the market." But as with the damage done by SBF and other scammers, Gary Gensler may actually have done the most damage. In a post titled "Everyone Hates Gary," Ryan states that "the first thing you need to know about the SEC under Gary Gensler is that they never met a company they didn't want to Sue (except, obviously, the FTX)."

While I applaud those who win battles in Washington, I am confident that these problems will eventually be solved through regulatory arbitrage. I'm glad builders are leaving the United States for Singapore or Lisbon or other places that are very welcoming to innovators, rather than staying in places that put people in jail for it. So my personal view is that I want to spend more time thinking about regulatory policy, as much as the regulators are spending time thinking about me.

But Ryan went in the opposite direction. In the preface, he admits that he will "probably spend more time in this report than you think interpreting cryptocurrency policy". At 23 pages, the policy section is 20 percent longer than the next longest.

But of all the shocking moves by regulators and lawmakers, the most egregious was the arrest in August of Alexey Pertsev, co-founder of Tornado Cash, a Dutchman who is also a Russian expatriate, in connection with money laundering. So far, authorities have failed to outline formal charges against Alexey. No one knows exactly what actions are considered illegal, but the chilling effect makes crypto winters even more brutal. The whole episode also highlights why encryption is so important to creating a better world.

Chapter 5 "Top 10 Cryptocurrency Trends" Highlights -- Stablecoins should be our main output product

I did 26 episodes in 2020."Stablecoins Are Killing ItBecause it is the fastest growing part of the crypto ecosystem, it will continue to grow in 2023, and the number of stablecoin transactions on the chain will continue to hit new highs.

While most people have focused on the battle between USDC and USDT for Stablecoin dominance, I'm more interested in algorithmicstablecoins like Frax, Rai, and Reserve. I am also more bullish on the impact of CBDCS than Ryan, who is more Orwellian, as if US CBDCS were more dystopian than our current banking system. Instead, I'm more focused on how CBDCS can enable billions of people to use digital currencies.

Chapter 6 "Top 10 Trends in Ethereum and L1" Highlights -- the new Ethereum Roadmap

The highlight I chose last year was "Solana Summer Never Ends," which turned out not to be a good choice. I think Cosmos may be the biggest winner in non-Ethereum L1 compared to the choice of a year ago.

While we felt at the beginning of 2022 that we were going down the multilink path, by the end of the year we were back to focusing on EVMs. While non-EVM chains are working to become EVM-compatible, and Bridges are being built and strengthened between chains, Ethereum is becoming more dominant.

"Merger" is the bright spot for L1 in 2022. The continued progress of the Ethereum roadmap below is expected to be a bright spot for L1 again in 2023.

Chapter 7 Highlights of "DeFi Ten Trends" - real asset mortgage

Just like Ryan, "I couldn't be more excited about the future of decentralized financial DeFi". I also believe that "we need more applications to serve our users' daily work and find use cases that we can be proud of".

But the part I'm most excited about is the migration of real-world assets RWA up the chain. It's a huge opportunity, and it's already happening, as RWA has grown to account for 57 percent of Maker's revenue in December:

A good example of RWA in DeFi is END-Labs, which is flagating pools of gig workers' compensation (e.g. from Uber, Lyft, DoorDash, etc.), offering gig workers the opportunity to receive their compensation earlier while providing them with a sustainable double-digit return on investment.

Like Ryan, I'm also very bullish on "regenerative finance," a term coined by John Fullerton to describe an economic design that "protects what is left and ensures long-term financial prosperity by regenerating what has been lost." I am proud to be part of the Celo community, which is doing a lot of great work in regenerative finance.

Chapter 8 "Top 10 Trends in NFT and DesOCs" Highlights -- Decentralized Social Desocs

DeSoc reconstructs Web2 social media in the crypto space with the potential to provide "people's reputation on the chain, organization DAO and ownership of their content. DeSoc also introduces new ways for people to better capture the value of their online IP. DeSoc will change the way value flows across the Internet." DeSoc is in its early days, and early leaders like Lens still have small communities, but decentralizing Facebook is in our sights, and the world will be a better place when that happens.

Chapter 9 "Top 10 Trends in DAOs and Web3" Highlights -- actually useful DAOs

I fully agree with Ryan that "what is lacking most in the crypto space is not talent, but good governance and protocols that encode better Layer 0 value at the community level". But let's look at some early examples of DAOs that actually work.

New business model: Vibe Bio aims to change the incentive structure of biotech. The agreement makes it easier for people with rare diseases to access drug-funded research.

SPAC: ConstitutionDAO is a flash mob that shows how easily single-purpose communities can coalescate around a cause and can fund investment. The concept could extend to buying sports clubs, funding crypto businesses or funding lawsuits against deep-pocketed enemies.

Investment Clubs: Syndicates makes it easier to set up NFTS and token investment clubs such as the Orange DAO.

Impact DAOs: Gitcoin has been one of the most innovative early DAO projects, pioneering the secondary funding model and helping seed core ecosystem infrastructure such as ethers.js, Optimism, and Uniswap, among others.

Ultimate DAO, Cyber State: "A cyber state is a highly coherent online community with the ability to act collectively to implement crowdfunding for territories or DAOs around the world, and ultimately to gain diplomatic recognition from existing states," Balaji writes.

My passion project for the last six months has been the CryptoOracle Collective, so I'm also very excited about the decentralized talent market.

Chapter 10 I have something to say -- Why do You Have to Write

I've written over 300 crypto-related articles, and most of the time no one cares.

"I don't know what I was thinking until I read what I wrote about it - William Faulkner"

Or as Ryan puts it, "Reading helps me identify blind spots, but writing helps me focus and clear my mind."

Original link

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia