From February 11th to February 20th, 2022, the 10-day ETHDenver conference was successfully concluded in Denver, USA. This is currently the largest and longest running ETH event. According to media reports, a total of 20,000 people from more than 150 countries and regions participated in the conference. Developers and participants who are enthusiastic about the ecological construction of Ethereum gathered here to discuss the construction of the ecosystem and the development trend of the industry. Discuss and demonstrate various solutions to the current pain points of the Ethereum network through hackathon competitions.

The meeting discussed polarization, and V God bluntly welcomed the encryption winter

After the end of the ETHDenver conference, the market's discussion on the content presented at the conference showed polarization:

Under the double influence of the Bitcoin halving cycle and the imminent tightening of global monetary policy, the crypto market has continued to decline in panic in recent months. Affected by the market, some investors and analysts are pessimistic, believing that some project parties are only using the influence of the conference for brand promotion and exposure, lacking exciting innovations and breakthroughs.

The concept of Web3.0, which was given high hopes before, has become the hardest hit area that has been criticized. For example, analyst Sam Callahan, messari founder Ryan Selkis, Psyops Capital CEO HEtuba, etc., have criticized the related projects of the ETHDenver conference: "Web3.0 is in a bubble, and we will re-prioritize after the blockade is over Physical brands...composability and self-sovereignty are overrated." HEtuba even used classic clips from the movie "The Big Short" on social media to express his negative tendencies. This can't help but remind people of Tesla CEO Musk's previous remarks that defined Web3.0 as a "marketing buzzword" rather than a practical application.

Of course, a number of high-quality innovative projects have emerged in the hackathon competition of the ETHDenver conference, and the Layer 2 section of the public chain expansion solution has also made good progress. For example, OptimismPBC developer proto.eth stated that the team has developed a complete data blob transaction prototype (mini-danksharding), which is the first milestone in the realization of complete Ethereum sharding, which increases the capacity of rollups such as OptimismPBC by 100 times . The Hackathon involved more than 170 teams, and the top 30 teams were finally selected. Most of the 30 winning projects are concentrated in DeFi, Web3.0, NFT, Metaverse and DAO sectors, such as:

In the DeFi category, there are Dust Sweeper, which tries to solve the problem of small transactions, and SlowSwap, an MEV solution;

NFT sector: Bunker.finance, which focuses on NFT pledge lending, and Mimicry Protocol, an NFT derivatives agreement, stand out;

In terms of metaverse games: INDAO and MoonScape have received relatively more attention.

In addition to the progress of various projects and solutions at the ETHDenver conference, the views of Ethereum founder V God have also received extensive attention. V God said in an interview with Bloomberg: The current encrypted asset market can be called a winter that brings chills to investors, but the encrypted world may actually benefit from a price drop. , Many people welcome the bear market, because when the price rises sharply for a long time, although many people will be very happy, it often leads to very short-term speculative opportunities." It can be seen that V God is not optimistic about the trend of the encryption market, but I think this is by no means a bad thing, the market cooling is conducive to more sustainable projects, and has focused attention on the expansion of the Ethereum network.

Ouyi Research Institute: Five major factors will affect the follow-up market trend

Compared with the rapid progress in 2021 under the blessing of continuous benefits, the start of the encryption market in 2022 looks quite bleak. According to the Ouyi market: First, it continued the downward trend that started in November last year, falling all the way down to around 33,000 US dollars, setting a new price low in the past half a year, and then rebounded weakly to around 45,800 US dollars. ;

According to the Ouyi Research Institute, the trend of the encryption market during the year is not clear, and the market outlook mainly depends on the following factors:

1. Progress in infrastructure construction of encryption ecology

Consistent with V God’s point of view, during the cooling-off period of returning to rationality, without the intervention and influence of speculative funds, it is more conducive for the development teams to concentrate on the optimization and iteration of the project itself, and it is also more conducive to the healthier development of the entire ecology. way is developed. The breakthrough progress of the industry infrastructure will provide more powerful support for the entire market. For example, Ethereum 2.0 has been upgraded, and its POS mechanism (proof of equity) and shard chains (Shard Chains) technology will greatly increase the number of concurrently processed transactions, thereby providing a better trading environment and development environment, and contributing to the long-term prosperity of the Dapp ecosystem Provide a solid foundation; the rise of emerging public chains such as OEC has also brought more possibilities to the industry.

2. The circle-breaking and wealth-creating effect of the head track

In 2021, as the two basic modules of the metaverse concept, NFT and GameFi have achieved unprecedented development in terms of user base, number of high-quality projects, and capital accumulation. According to Ouyi OKX Ventures annual investment report data: GameFi data has achieved rapid growth in 2021. The number of players has increased from 80,000 in early April to 1.248 million in December, and the daily transaction volume has increased from around US$500,000 in early April. To the average level of around 200 million US dollars, the highest daily trading volume exceeded 850 million US dollars. The cumulative transaction volume of NFT in 2021 is $21.5 billion, a year-on-year increase of more than 200 times. The out-of-circle effect and wealth effect of NFT and GameFi have attracted a large influx of funds, helping the overall market continue to rise.

In 2022, whether there will be a top track to take over NFT and GameFi is also a key to affect the market trend. In ETHDenver's hackathon winning projects, DeFi, Web3.0, NFT, Metaverse and DAO sectors became the focus, and the four potential tracks predicted by OKX Ventures (DAO, DEX derivatives, Metaverse, Web3.0 ) highly coincident. As for whether these tracks can really explode, it will take the test of time.

3. Global monetary policy tightening

After the beginning of 2022, the key indicators of various economic entities have shown that the inflation rate has reached the point where it has to be suppressed: the CPI (consumer price index) data of the United States and the European zone have broken decades of records, and the United States has reached 7%. The inflation rate hit a new high in about 40 years. The Federal Reserve began to release hawkish signals intensively, and the expectation of substantial interest rate hikes continued to rise. All the major financial markets suffered setbacks and downturns to varying degrees.

In this round of bull market, traditional institutional funds that are particularly sensitive to monetary policy and US stock trends have successively entered the market, leading to a continuous increase in the correlation (0.44) between the encryption market and the Nasdaq stock index. This has also led to the increasing impact of interest rate hike news on the trend of the encryption market. Once the abundant liquidity recedes, it is difficult for the encryption market to be alone. In 2018, Bitcoin directly ended the bull market under the double influence of the cycle and 4 intensive interest rate hikes.

Recently, Federal Reserve Governor Bowman said: It is too early to judge whether the Fed will raise interest rates by 50 basis points in March, and the surge in US federal funds rate futures seems to confirm this judgment. But in the end, it depends on the Fed's decision statement on March 16. Researcher Ou Yi said: The current round of monetary easing cycle led by the Federal Reserve will come to an end sooner or later. At that time, the flow direction and outlet of the capital market may undergo major changes, and a new round of reshuffle will follow. However, the value potential of the encryption market is far from reaching the critical point, which is enough to support long bull expectations.

4. Sudden changes in the international situation

Recently, the international situation has changed suddenly, and the situation in Russia and Ukraine has suddenly become tense. On February 21, Russian President Vladimir Putin signed an order recognizing the "Donetsk People's Republic" and "Luhansk People's Republic" in eastern Ukraine. Ukraine then condemned the decision of the Russian Federation to recognize the "independence" of its puppet organizations in the temporarily occupied territories of Ukraine and called on Western countries to intervene and sanction Russia's actions. Biden signed an executive order banning new investment, trade and financing by Americans in the Donetsk and Luhansk regions.

The European Commission subsequently issued a statement proposing a package of sanctions against Russia in response to Russia's actions. The escalation of the incident has caused funds in the financial market to tend to avoid risks, the stock markets of many countries have fluctuated and declined, and the encryption market has also been affected and experienced a short-term decline. Whether the incident can be satisfactorily resolved under the influence of various forces will have an impact that cannot be ignored on market trends. Regarding this time, Ouyi researcher said: In the long run, Bitcoin has the potential to "recover lost ground". If there is a local war in the future, Bitcoin does not rule out a short-term upward trend.

5. Further improvement of mainstream acceptance

In 2021, cryptoassets will see a breakthrough in mainstream acceptance: the Ontario Securities Commission in Canada has approved asset management company Purpose Investments Inc. to issue a bitcoin exchange-traded fund (ETF), the world's first bitcoin exchange-traded fund (ETF). Coin ETFs. On October 19 of the same year, the Bitcoin futures ETF provided by ProShares, an American financial service provider, passed the SEC review and started trading on the New York Stock Exchange.

Many institutions and traditional funds such as Microstrategy have also entered the market one after another, holding Bitcoin exposure. Well-known companies and enterprises such as Tesla and Twitter have also successively announced their support for encrypted asset payments, rewards and donations. El Salvador has even adopted Bitcoin as legal tender. As can be seen, there has been a qualitative change in the acceptance of cryptoassets both by institutions and by economic actors. The Federal Reserve's approval of the Bitcoin spot ETF will become a key node for Bitcoin to truly enter the mainstream. At that time, the encryption market will also open up a new pattern under the impetus of continuous entry funds.