Original Title: "Three Pillars of Booming Crypto Ecosystems"

Original Source: Ignas

Original Translation: Deep Tide TechFlow

How to choose which tokens to invest in during a bull market? How do you conduct research? Are you just looking for potential targets on Twitter?

Given the current abundance of tokens and narratives in the cryptocurrency industry, how should you evaluate which tokens have the potential to surpass BTC?

In my opinion, the success of any encryption ecosystem is driven by three key elements: technological innovation, token minting opportunities, and the narrative level of the project.

These key standards help evaluate the potential of encryption projects and their ability to attract and maintain a focused community.

In this article, I will consolidate and expand on some of the methods I have mentioned in previous blog posts and Twitter tweets.

In addition, I will use some examples to help prove my point.

Note: You can track the performance of cryptocurrency narratives and related ecosystem tokens on this Dune dashboard created by CryptoKoryo.

1. Technical Innovation: The Key to Project Development

Technical innovation is the driving force behind new encryption projects or upgrades. The more innovative the technology, the more narrative power a project has.

Bitcoin started it all with its distributed ledger. Then came Ethereum, which made complex transactions possible through smart contracts. The bull market of 2017 was in part fueled by the invention of ERC20.

"However, the most important impact of Ethereum and ERC20 is not technical, but social. Before ERC20, coins were mainly seen as currency for payment or storage. But with ERC20, everything became possible to be tokenized. As the price of cryptocurrencies rises, the use cases for them are also increasing." - My thoughts in the "Echoes of the Past" blog post.

The previous bull market was marked by the emergence of DeFi, which included multiple technological innovations such as AMM, lending protocols, algorithmic stablecoins, and more.

During each bull market, the cryptocurrency industry sees new technological innovations. Without them, the industry would stagnate and eventually disappear.

Many innovative solutions are built during bear markets, so maintaining and researching during difficult times can indeed bring returns.

Since the last bull market, new and exciting technologies have emerged:

·Optimistic Rollups and ZK Rollups are used to reduce transaction fees and increase speed on the execution layer.

·Innovation of data availability layer;

·Account abstraction and intention to improve user experience;

·Soulbound token, a non-transferable token used to represent personal identity on the chain;

·Real-world asset or on-chain tokenization;

·The next generation of on-chain derivatives and DEX;

·Mingwen and DeFi on BTC;

·再质押

AI is another technological innovation that has a significant impact on the encryption industry, although it originated outside the encryption ecosystem. However, time will prove what encryption projects can really do to decentralize AI.

However, not all technological innovations are equal, nor do they all bring financial benefits.

Their differences lie in the similarities of their token economic models/token minting methods, and these differences will attract the attention of investors, thus becoming the dominant narrative.

2. Token Minting Opportunity: Currency Aspect

Token minting, or what I like to call "printing money," is similar to central banks injecting new fiat currency into the economy. In the world of cryptocurrency, this is achieved by issuing new tokens within an ecosystem.

When Ethereum was launched, the first thing we did was to thank the invention of ERC20 and launch more tokens. However, the rapid collapse of the 2017-18 tokens revealed the limitations of mere narrative due to the lack of substantial technological innovation.

Terra's UST is a notorious example, but it also perfectly embodies the three pillars of algorithmic stablecoin technology "innovation", the money wheel effect (Ponzi), and 20% APY passive income.

So, which narratives align with the three pillars of a thriving ecosystem?

One of them is Restaking + LRTs, which conveys the story of "protected by Ethereum" and is one of them. DeFi on Bitcoin is another narrative.

Modularization and the overall L1 are a huge story of this bull market. Solana, SEI V2, and Fantom are challenging Ethereum, Avalanche, and Polygon's modular vision. Which approach will succeed? It's not easy to answer, but both approaches may have a place in the crypto field.

AI is a powerful narrative, but currently there is little technological innovation in AI and token minting opportunities are low. However, as I mentioned, AI tokens are emerging, but without real technological innovation and flywheel effects, their rise will be as fast as their fall.

As a practitioner in the encryption industry, I am here to help you translate Chinese to English. Please note that I will not consider the context or industry-specific terms and names. English words and phrases, as well as capitalized English words and phrases, will not be translated or omitted, such as ZKS, STARK, and SCROLL. If there are English characters in an a tag, they will be returned as is without translation. When the content only consists of punctuation marks, they will be returned as is. HTML tags such as

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Here is the translation of the content you provided:

Asking everyone a question: What other ecosystems can meet these three standards? Please leave a comment below.

"Prosperity" vs. "Sustainable" Ecosystems

I initially named this article "Three Key Factors Driving a Sustainable Cryptocurrency Ecosystem," but that is not entirely accurate.

These three key factors help the ecosystem thrive, but as new competitors emerge, the pace of innovation will slow down. The newly forged funds in the ecosystem exceed the attention and amount needed to maintain prices, and the narrative is replaced by more popular plays in the market.

Axie Infinity is a good example of a "prosperous" ecosystem. Blockchain games are a novelty, and Axie perfectly showcases the Play-to-Earn vision to the world.

Thousands of Filipinos believe they can earn money by playing games. However, its growth depends on the speed of new projects entering the ecosystem, as more and more NFT and Smooth Love Potion tokens are being minted.

In the encryption industry, we constantly play these similar chain games. New innovations and narratives are monetized by issuing new tokens. Unless the ecosystem manages to continue innovating and reshaping itself, and managing the inflation of tokens, the once prosperous ecosystem will wither and the tokens will fall.

DeFi has "prospered" through liquidity mining, but we need to continue to innovate it. DeFi 1.0 projects have passed the initial hype stage and have finally entered a stage of sustainable growth.

But the narrative I mentioned in this article has not yet flourished. Their ecosystem is young, with new and exciting tokens about to be launched. Our task is to find the ecosystem that builds the most sustainable and thriving ecosystem.

This is a delicate balance, where each element strengthens the other, creating a growing and sustainable environment. As we continue to see the development of this bull market, I believe these three keys will help you find a sustainable crypto ecosystem from the decline.

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