foreword
DeFi Summer appeared in the cryptocurrency industry in 2020, Bitcoin and Ethereum hit record highs in 2021, and then NFT became popular. Everyone is looking forward to the blockchain in 2022. But looking back at the past at this moment, we find that the cryptocurrency industry has been very bumpy in the past year.
At the beginning of 2022, in response to inflation, the monetary and fiscal policies of many countries around the world began to tighten, and the macroeconomic environment continued to deteriorate. It is also difficult for the cryptocurrency field to be alone. The Terra ecology quickly disintegrated in the middle of the year, and some large institutions (such as Three Arrows Capital, Celsius, Blockfi, etc.) also experienced chain liquidation and bankruptcy. A large number of customers suffered heavy losses, and the blockchain market continued to fluctuate.
first level title
Our Investment Statement
Adhering to the investment principles of "decentralization", "no access", and "autonomy". We believe that individual ownership of assets such as data can be strengthened through decentralized technology. With the advancement of technology, governance and decision-making power will also be transferred from centralized participants to a wider and decentralized group of people, fully stimulating individual creativity and participation.
Based on the core principles, we focus on the following directions:
Infrastructure projects that promote the large-scale application of the Web3 network
Innovative tools and apps with a sustainable economic model and engaging billions of active users
As an investment firm, we will grow alongside the founders while leveraging our expertise and resources in the Asia-Pacific region to help entrepreneurial teams grow, including global expansion.
Our most exciting events in 2022:
Blockchain infrastructure
The blockchain infrastructure is all-encompassing and rich in content, but they ultimately have to achieve one purpose: how to abstract the underlying blockchain infrastructure so that end users do not feel its existence. Applications will drive blockchain adoption at scale, and the goal of blockchain infrastructure is to ensure that the various needs of these applications can be met.
L1s
Layerone (the underlying public chain) is the foundation on which all other applications are built and will continue to arouse our interest in the future. Over the past year, we have invested in:
(1) Two public chains supporting the Move language:AptosandSui, the team comes from the Diem team with profound technical accumulation. We incubated the first adoptionMoveStarcoin, the public chain of the POW consensus of the language, has gained a lot of experience in the process, and uses these valuable experiences to deploy and allocate developer resources to support the development of these two ecosystems.
(2) Privacy public chainMina, they are building a security layer with privacy features for Web3, while reducing the computing power requirements of node participants, thereby increasing the degree of decentralization.
(3) We also participated in the financing of Scroll, which is an L2 ecosystem based on ZK-rollup technology. We believe that zero-knowledge proof technology will be the key to achieving trustless privacy.
(4) To massively scale the data availability layer, we invested in Subspace Network, a highly scalable, modular blockchain that serves as a shared infrastructure layer for builders across ecosystems.
We are also working on researching various L1 blockchains to help us understand this niche, you can learn more via the hyperlink above.
Given the different focus of each blockchain design, we recognize that there are many different approaches to blockchain scaling:
（1 ）EthereumL2 provides a cheaper and faster alternative than L1, and it retains the property of decentralization. Of course, if users prefer, they can also choose to settle directly on L1.
（2 ）CosmosBlockchain design centers on interoperability, resulting in an ecosystem of Appchains, each running its own set of validators to manage economic security, while being connected via the Inter-Blockchain Communication (IBC) protocol.
(3) 2021Solana、Avalanchemiddleware
middleware
As the underlying blockchain develops, we foresee some new trends emerging that may bring opportunities in the following segments:
(1) The network state will grow and require more management
(2) Increase the economic value of the more secure chain
(3) A stronger connection with the Web2 world will facilitate the transfer of data from off-chain to on-chain
(4) Users want to securely transfer value across different blockchains, and the need for interoperability will increase
(5) Better self-custody of personal assets
Therefore, we believe that decentralized storage solutions,Decentralized Staking Solutions, permissionless oracles, trustless bridges, and non-custodial wallet solutions will each play a large role in these trends.
From this, we invested in:
(1) Arweave, a decentralized storage network that utilizes idle disk space
(2) Swell Network, a license-free, non-custodial and liquid ETH staking protocol
（3 ）Switchboard, a permissionless oracle that allows the creation of high-performance data sources from any API
(4) Layer Zero, a full-chain interoperability protocol that supports cross-chain communication
(5) Gnosis Safe, a digital asset management platform that allows multi-signature schemes
(6) Meson Network, a bandwidth market on Web3, focuses on integrating idle bandwidth resources of long-tail users at low cost and monetizing them
(7) Safeheron, a multi-party computing (MPC) and trusted execution environment (TEE) technology provider that improves hosting security
(8) Bitkeep, a decentralized multi-chain digital currency wallet, is committed to providing users with safe and convenient one-stop digital asset management services
(9) BloXroute, a high-performance, globally distributed blockchain transmission and content distribution network. Similar to CDN, BloXroute has created BDN technology to provide on-chain transaction acceleration BDN services for Defi traders on Ethereum and BSC.
We also incubated further:
(1) OneKey, an alternative hardware wallet solution for Ledger and Trezor
(2) Openblock, an MPC wallet, users do not need to keep the mnemonic, and can restore the account through social methods.
secondary title
application layer
Back to the application layer, we believe that user-centered design and value-added should be the core in the underlying logic. Similar to how Web2 consumer applications gradually gain mass adoption after iterating their product UI/UX, we believe that Web3 applications need to make the user experience as seamless and straightforward as possible. For example, difficulties in a new user's experience process may include: the acquisition of encrypted assets, the application registration process, the need for multi-signature verification, etc. Most notably, the inability to interact with most apps on mobile devices is a huge pain point, which leads to incompatibility with the existing user base.
DeFi
The first wave of Defi Summer shows real demand for such products, but mass market usability remains a critical unresolved issue.
DEX
There is no doubt that people’s demand for decentralized exchanges is increasing, especially after the explosion of centralized exchanges. Most of the volume currently happens on CEXs simply because of their higher availability. In this case, the next wave of DeFi products needs to have similar or higher usability in order to attract more users, especially non-encrypted native users.
From this, we invested in:
（1 ）Drift protocol, a high-performance decentralized exchange on Solana that will replace the way people execute trades and swaps on CEX. The upcoming Drift v2 release will include several new products such as spot swaps and lending.
(2) Pontem is a development studio on Aptos. It has launched products such as DEX Liquidswap and Pontem Wallet, the largest AMM model on Aptos. Pontem Wallet is a consumer-centric wallet. Inexpensive, and seamlessly integrated with most apps in the Aptos ecosystem.
Derivatives
Likewise, we believe that on-chain and decentralized derivatives are the future. The underlying problem is that there is currently a lack of mature infrastructure for these applications to thrive like centralized applications. As mentioned above, progress made at the infrastructure layer could be a turning point in the development of decentralized derivatives.
From this, we invested in:
(1) Arrow Market, a decentralized financial market options protocol on Avalanche, aims to democratize the entire options trading channel (from market making to brokerage to clearing and settlement).
(2) Rage Trade, the most liquid ETH perpetual trading platform and stablecoin farm on Arbitrum. Notably, Rage Trade is powered by Layer Zero, which allows them to unify liquidity across multiple chains.
stable currency
stable currency
A decentralized economy needs decentralized stablecoins. The LUNA storm not only announced the end of algorithmic stablecoins, but also further emphasized the market's demand for truly decentralized stablecoins. While there are currently varying degrees of decentralization around stablecoin models, we believe the industry will continue to innovate and work towards this ultimate goal.
From this, we invested in:
Thala, an over-collateralized, stable-yielding stablecoin protocol backed by a basket of on-chain assets. Its diverse collateral of liquid collateralized derivatives, liquidity pool tokens, deposit receipt tokens, and RWA ensures its decentralized, censorship-resistant nature without compromising capital efficiency.
game
Now that we have experienced the last wave of P2E games that supported cryptocurrencies, we believe that the next wave of games will focus on utilizing blockchain technology to enhance the gaming experience, whether it is in game asset ownership or interoperability or even in e-sports field.
From this, we invested in:
(1) Shrapnel, an upcoming AAA first-person shooter based on Avalanche. The game is powered by next-generation community-driven tools, built on the blockchain to provide true ownership.
(2) Star Atlas, a next-generation gaming metaverse that incorporates state-of-the-art blockchain, real-time calculations, multiplayer video games, and decentralized financial technologies.
(3) Midnight Evergreen, a platform for a series of AAA self-made and third-party games for different users. They try to integrate NFT into the classic gaming experience in a way that enhances the experience.
NFT
We are still in the early stages of the NFT development cycle, and the first real NFT boom will start with PFP in 2021.NFTs will enter art, music, sports, pop culture, brands, and more, while driving the next wave of mainstream consumer adoption, and the importance of decentralized digital asset ownership will become more widely accepted.
From this, we invested in:
Few and Far, the next-generation Web3 experience platform, will include NFT, DeFi, games and other projects in the NEAR ecosystem.
social contact
Now is the perfect time for Web3 social to replace current social media platforms. Data ownership, portability, transparency, and censorship resistance make the leading projects of the Web 3 social track more and more attractive. Additionally, giving users true ownership of content will change the current power structure between platforms and content creators.
We have invested in:
Solcial, a decentralized social network built on Solana. Solcial allows anyone to share content completely permission-free, avoids censorship, and rewards users and content creators in a fair way.
Planet, a free and open source tool for publishing and tracking web content. Planet does not rely on centralized servers, but uses IPFS for peer-to-peer content distribution.
life and entertainment
Web3 can help people integrate life scenes into entertainment applications in a more creative way. Having such data will unlock new application scenarios, and applications for C-end users will also have new developments.
We have invested in:
Gritti, a Web3-based lifestyle social app, helps users achieve their exercise goals and maintain a healthy lifestyle.
Here are some of the studies we're conducting in 2022:
Special Research
Solana Pay and the Future of Web3 Payments
"In-depth study of Avalanche and Subnets"
"The Next Tough Battle: The Battle for Ethereum Scaling"
The Importance of Staking Aggregators in the PoS Era
Cosmos Insights: A Focus on Interoperability
"Comprehensive Analysis of the Move Language: Javascript for Web3"
Censorship Resistance in Bitcoin and Ethereum
"GenesysGo: An Overlooked Essential Infrastructure Provider on Solana"
"In-depth NFT market data, mining new trends in NFT market iteration"
Portfolio Deep Dive
"Bixin Ventures: Why We Invest in Mina""The Changer of Perpetual Trading: Drift Protocol"
Portfolio Analysis: Sui Led by Mysten
"Structure.fi: Bringing real assets such as stocks and ETFs to the blockchain through tokenization"
"Bixin Ventures: Why do we invest in the next generation of new public chain Aptos?" "
Review and Prospect
Bixin Ventures started to actively invest with its own capital about 18 months ago, and now has more than 20 employees distributed in China, the United States, Singapore, Eastern Europe and other places. We stand with great founders and participate in their funding rounds. As the market enters a depression stage and entrepreneurial teams focus on application development, we hope to continue to support more entrepreneurial teams. We are also proud of the development of our in-house research team, which has made us a better investor in this space thanks to our in-house research team.
Looking ahead to 2023, we expect to provide more targeted assistance to our existing portfolio and will actively seek and hire post-investment managers for internal support.
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