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Bankless: Five crypto narratives that performed strongly in 2023

Bankless

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Which verticals are flashing bullish signals and showing strong signs of entering the mainstream today?

原文标题：《 Bankless：2023 年表现强劲的五个加密叙事》

Original source: Bankless

Deep Tide TechFlow

2023 is off to a dramatic start. Banking crises, crackdowns on centralised exchanges and seemingly endless regulatory panics - each day is buffeted by a new piece of bad news.

However, the cryptocurrency market has shrugged off those concerns. Bitcoin and Ethereum have surged 69.1 percent and 57.8 percent in the first few months of the year, outperforming all other major global asset classes, respectively. In addition, several sectors within cryptocurrencies are still showing strong signs of growth.

Historically, sustained cryptocurrency bull markets have not just been driven by the appreciation of bitcoin and Ethereum, but catalyzed by applications, such as the rise of smart contracts and ICOs in 2016-2017, and use cases such as DeFi/NFT in 2020-2021 that trigger demand for block space.

Which verticals are flashing bullish signals and showing strong signs of entering the mainstream today? Let's dig deeper:

Liquidity pledge

Liquid pledged derivatives (LSD) have been very popular recently as we are approaching the "Shanghai" upgrade, the highly anticipated Ethereum upgrade, which is scheduled to launch on April 12 and enable ETH pledged withdrawals. Although "Shanghai" has yet to be implemented, LSD deposits have surged by 21.3% so far this year, from 4.9m to 6m.

In the short term, the impact of the "Shanghai" upgrade on ETH prices is unclear. What is more certain, however, is that by removing technology implementation risk, the "Shanghai" upgrade is likely to trigger a "pledge supercycle", which will see ETH pledge rates rise from the current 15% to around 60% closer to the PoS network average over the next few years.

Anticipation of this mortgage supercycle has led to sharp increases in LSD publisher governance tokens "like Lido (LDO), Rocket Pool (RPL), StakeWise (SWISE), Frax (FXS), Stader (SD)" Because the market expects them to catch these inflows.

In addition, assets that provide the pledge infrastructure are benefiting from the growth of LSD, such as SSV Network, a Distributed Verification Technology (DVT) protocol, and a liquidity bribe market operator. Redacted Cartel (BTRFLY), which is also rumored to be entering the LSD space.

As the number of deposits increases, the LSD should see a significant increase in its revenue, as rising ETH prices will result in an increase in the value of its revenue in ETH terms.

NFT-Fi

Nft-fi (DeFi of NFT) is another area that will grow significantly in 2023 and has begun to shake up the competitive dynamics in this space.

With the rise of Blur, the NFT market landscape changed dramatically in 2023. Blur has surpassed OpenSea to become the leading marketer and integrator in the field with its innovative incentive program and token offering. Although some have questioned its sustainability, Blur has injected considerable fluidity into the NFT ecosystem, with the likes of The total value of such sought-after collectibles has exceeded $61.9 million.

Other markets, such as AMMs such as SudoSwap and Caviar, also offer innovative solutions that tap into asset class liquidity, although they have yet to have a significant impact in the market.

Lending, another NFT-Fi sub-sector, has experienced significant growth.

Loan originals surged from $95.4 million to $436.5 million in the first quarter of 2023 (up 357.5% sequentially), largely due to the growth of platforms such as NFTfi, Arcade and BendDAO, They provide NFT traders with access to liquidity or high leverage.

Although NFT prices in ETH terms have risen only slightly this year -- Nansen's blue-chip 10 index is up just 8.5% -- NFT-Fi The driven increase in liquidity and leverage should pay off in the long run as it leads to a mature asset class market structure. With the pair JPEG And increased interest in alternative use cases such as games. It should continue to grow.

Perpetual DEX

Perpetual DEX - where users can trade perpetual futures contracts, or futures contracts with no expiration date - was seen by many as the big winner after the FTX collapse, with many hoping that trading activity in the cryptocurrency's most popular type of derivatives would move up the chain.

While centralised exchanges remain dominant, perpetual DEX has seen significant growth as the market has rallied. According to Token Terminal, trading volume of only perpetual contract DEX increased 77.3 percent year-on-year in the first quarter of 2023 to US $1.643 trillion from US $926 billion, compared with the fourth quarter of 2022.

This growth has resulted in a number of excellent perpetual contract protocol governance tokens outperforming ETH, such as DEX such as dYdX (DYDX), GMX (GMX), Gains Network (GNS) and Kwenta (KWENTA).

If prices continue to stabilize and liquidity returns to the market, these deXs look set to continue to grow in the coming months. In addition, GMX, GNS and KWENTA, in particular, should benefit from increased adoption of Layer 2 and the proliferation of ARB and OP incentives. If used correctly, these tokens should deepen liquidity and stimulate trading activity on these platforms.

game

Gaming is one of the most likely use cases in cryptocurrencies to attract new users and capital.

Although it doesn't get much attention from other verticals on this list, the industry has shown strong potential so far in 2023, with gaming tokens like MAGIC, IMX, RON and GALA outperforming ETH so far this year.

There are a number of positive catalysts within the gaming industry that may have contributed to this performance, such as Arbitrum token launch in the case of Treasure, Immutable announcement of zkEVM, launch of RON Pledge, etc.

Other events, such as the Game Developers Conference (GDC) and Epic Games' announcement of support for 20 games with encryption elements, may also have contributed to the industry's enthusiasm for growth.

With the release of the highly anticipated game, The card game Parallel, the auto-combat RPG Illuvium, the first-person shooters Deaddrop and Shrapnel, and the full-chain Mmos Realm and Influence will continue to release in 2023, And future contests and UX improvements such as account abstraction are expected to help the industry continue its slow but steady progress in the coming months.

On-Chain Treasuries

On-Chain Treasuries Is another rising DeFi sector, similar to previous DeFi summers, which began in a zero interest rate environment. Back then, double, triple, quadruple or even quintuple returns were an oasis in a capital-hungry world. While these returns were an illusion and ultimately proved unsustainable, they nonetheless attracted a flood of capital to DeFi in an attempt to achieve them.

Today, DeFi has the opposite problem, with the interest rate on the Treasurys in Meatspace already exceeding the farm yield (risk-adjusted) on the safest deal. In addition, large stablecoins like USDT, USDC, and DAI do not pay any interest to their holders, increasing the opportunity cost of holding cash on the chain.

Several solutions have emerged to solve this problem, such as Ondo Finance (and, more recently, Open Eden) providing access to tokenized Treasury securities from within DeFi.

Although access to these products requires overcoming KYC/AML barriers and is limited to high net worth investors, they still find product market fit. Ondo's OUSG has attracted $65.2 million from TVL.

If interest rates remain above 0% and stablecoins continue to offer no yield, the tokenized Treasury market could continue its torturous growth trajectory and penetrate one of the world's largest financial markets.

conclusion

There are many cryptocurrency areas that deserve close attention. Liquid Mortgage, crypto gaming, NFF-Fi, Perpetual DEX, and on-chain Treasury bonds are just some of the sub-sectors that have shown promise, showing signs of growth in early 2023.

It is early in the year and the direction of the market is uncertain - a lot can change. But it's time to start paying attention to these areas, and cryptocurrencies are about to get interesting again.