Investment Advice for Blockchain Layer 2 Expansion Projects

Yesterday, I saw a reader leave a message: During this sharp drop, the Bitcoin in my hand was lost. Do you want to exchange part of Ethereum for Bitcoin?

We can think about this problem in an analogical way. If you buy Bitcoin at the current price (nearly $50,000), how much can Bitcoin go up? My judgment is to double the increase (to $100,000), or double the luck (to $150,000). If Bitcoin can rise to these multiples, I estimate that there is a high probability that Ethereum will also rise by this much. Even if it cannot rise, the gap with Bitcoin will not be particularly large, so if it were me, I would not take out a part of the exchange.

I think from this incident, what we should think more about is not whether we should change positions, but why did we sell the bitcoins in our hands? If it is because of living reasons or urgent need for money, there is no way. But if it is not for this reason but inner fear or the influence of market sentiment, then it is time to learn this lesson, because there are likely to be several such reshuffles and adjustments in the future, and we should not fall into similar pits again.

At the end of last year, Bitcoin, Ethereum, and most of the DeFi tokens basically exceeded the fixed investment price I set earlier, so since then, I basically did not make a fixed investment in these coins, but focused on Turned to the second layer expansion and NFT field.

Today I would like to share with you some of my personal understanding of the expansion of the second layer.

There are many solutions for the second layer expansion, such as Plasma, state channel, OP-Rollup, ZK-Rollup, etc. However, there are not many projects that have realized these technologies and issued coins, and have made significant progress. There are only three that I am more impressed with: Celer, Matic (recently renamed Polygon), and Loopring.

Among these three projects, Celer seems to have made little progress, there is not much movement in the industry, and the price is not cheap now, so I have not bought it, and just keep watching it.

Matic has been cooperating with various projects in the industry, but it seems that they are relatively marginal projects. There are not many real cooperation projects with top brands. I think the main reason is that its technology has relatively large limitations. Although the project party has recently proposed richer plans, whether these plans can be implemented depends on the follow-up progress. I bought some in the early years and kept them in my hand. Although the price has risen now, I think it has not made much progress in real terms, and I am not very satisfied with its condition. There is no increase in positions. I also keep an eye on it.

Loopring is repeatedly recommended by V God. The main reason is that it implements the zk-rollup technology. This is the technology that V God is optimistic about in the long run, and it is also the technology that I am optimistic about in the long run. I think it may be the ultimate solution to the second layer expansion. plan. However, Loopring did not rank among the top brands in decentralized exchanges because of the blessing of this technology, but has always been between the first and second tiers. In my opinion, the biggest reason may be that the second-layer extension has not yet formed an ecology, so Loopring's own implementation cannot interact with other DeFi applications. In addition, users cannot freely add transactions like Uniswap is also a reason that hinders its development. .

I also bought its currency in the early years, but later felt that its model had relatively large restrictions, so I didn't add more positions.

Generally speaking, although the second layer of expansion is currently very hot technically, in terms of investment value, I think there are not many worth buying. On the one hand, it is because the progress of these projects is limited and the price is not cheap; What's more important is that almost all the top projects are now developing their own second-layer extensions, and they do not use the existing technologies of those second-layer extension projects.

According to this situation, is it possible that the second-layer expansion technology of these top projects will be implemented, and even form a group to form their own common second-layer expansion ecology, then the development space of the existing second-level expansion projects will be extremely limited Woolen cloth? I think the possibility exists.

So in layman's terms, the current second-tier expansion is popular in terms of investment, and everyone is optimistic about it, but in my opinion, there are not many that are really worth investing in.

However, the development of technology and ecology will always surprise people, especially in the field of digital currency. Perhaps there will be great changes in this field in the future, so we should keep a humble heart and pay close attention to its progress.