Weekly Editors Picks (0812-0818)
Weekly Editors Picks is a functional column of Odaily. In addition to covering a large amount of real-time information every week, it also publishes a lot of high-quality in-depth analysis content, but they may be hidden in the information flow and hot news and pass you by.
Therefore, our editorial department will select some high-quality articles worth spending time to read and collect from the content published in the past 7 days every Saturday. From the perspectives of data analysis, industry judgment, opinion output, etc., we will provide those in the encryption world with You bring new inspiration.
Now, come and read with us:
Investment and Entrepreneurship
We need to navigate the various stages of a bull market to maximize profits and avoid the most common pitfalls.
In the accumulation stage, hoard good projects, save ammunition, not over-trade, fill knowledge gaps, and monitor liquidity; in the early stage of the bull market, reduce losing positions and increase profitable positions, take profits on the way up, be wary of excessive risks, and observe the market Emotion, stay focused; at the peak of the bull market, consider launching a plan; during the decline stage, firmly believe that there will be the next Crypto bull market.
Narrative Wedges: A Guide to Profits and Survival
The goal is to put money into a liquid asset during a bear market and earn better returns than you would on an early-stage venture capital trade in that narrative.
Narratives gain momentum at the beginning of a bull market, often caused by technological developments. Early entrants in a given space experience outsized returns as narrative and usage scale simultaneously. Compound, UniSwap, and Bored Apes are all examples of narratives combining with product usage to generate outsized returns for investors.
The challenge is that you have to invest in narratives that will disappear before they can potentially attract enough users. Markets typically price in narratives in the short term. Given the liquid nature of Web3 investments, liquid assets may be exited within a quarter.
Given the illiquid nature of venture capital, startups may not have a market to tap into when the product comes online because the product takes time to develop. This often means slow death and gambling on the users return. The product actually becomes a bet on Niuhui. For founders, this is a survival note.
If product-market fit cannot be found within a meaningful timeframe, it makes sense to wind down the business.
Exploring the African Crypto Market: Falling in Love with Stablecoins, Desire for Success in Lack
In Africa, cryptocurrency payments have become a convenient way to obtain U.S. dollars.
Binance is popular in Africa due to its early expansion and promotion of peer-to-peer markets.
Africans want income based on ability rather than location, and they have the tenacity to pursue it.
The long-term goal should be to reduce the digital differences between Europeans and Africans.
Africans face many challenges, including a lack of regulatory support, the inability to travel, difficulty complying with KYC/AML regulations, little to no venture capital network, and little time to try new ideas.
What’s more, almost all Nigerians raise their hands and admit that they lost opportunities because people didn’t trust them.
Web3 Bridges education program is doing important work, and the next step is for Occidental to help deliver summer schools in person.
DeFi
The full-chain LSD protocols Entangle Protocol and Tenet Protocol are both from the Cosmos ecosystem.
Entangle is an EVM-compatible full-chain LSD application chain centered on native oracles. Its full-chain attribute is reflected in the fact that it can create cross-chain LSDs of any supported chain LP in other chains, thereby achieving multi-chain benefits. Entangle provides full-chain application scenarios for LP-LSD, while Tenet provides specific application scenarios (Tenet chain pledge) for full-chain LSD. The former is approximately a network-like structure, while the latter is more like a convergence-like structure. Tenet is also an EVM-compatible application chain based on the Cosmos SDK. It is deeply integrated with the LayerZero full-chain interoperability infrastructure, enabling LSD assets to achieve chain-level empowerment.
Entangles core focus is LP-LSD, which provides cross-chain LSD services for LP assets; Tenets focus is DiPoS, which supports diversified LSD assets to participate in the pledge consensus. The relationship between the two appears to be more cooperative than competitive.
CeFi
Conversation PayPal: Will PYUSD take market share away from Tether and Circle?
PayPals overall vision has always been to become a bridge between fiat currencies and Web3, bringing mainstream applications to the payment system. Paypal hopes to release a platform product that developers will then build on top of.
Stablecoins are currently the killer application of the blockchain, very close to the payment market, and have obvious advantages in settlement time. In the B2B payments space, Paypal is seeing increasing adoption of stablecoins.
PYUSD is the only stablecoin accepted by the PayPal ecosystem, which includes PayPal now, and soon Venmo, as well as its two-sided network. As a result, millions of consumers and merchants will have access to it and can use it as a funding tool for PayPal transactions. PayPal leverages the banking resources it has built up over the years. Users can transfer PYUSD and sell it, then withdraw to bank accounts. PYUSD also has compliance and regulatory advantages. PayPal charges transaction fees, but there is no charge for stablecoins. The only fee users need to pay is Ethereum Gas.
Business models that may win out in the short to medium term for Treasury RWA projects:
Underlying assets: Using treasury bond ETFs may be a relatively clever way to leave issues such as liquidity management to giants in the traditional financial field. If it is to directly purchase U.S. bonds or mixed assets, it will test the project partys ability to select partners;
Business structure: There are already relatively mature models that can be applied. It is best to have strong scalability to facilitate faster scale expansion and the inclusion of new asset categories in the future;
User side: In the short to medium term, projects that do not require KYC and have no capital threshold requirements have a wider user base. In the future, if regulatory requirements require KYC, the lightweight KYC project may become a more mainstream solution;
Income distribution: In order to make treasury bond RWA investors’ expectations of yield more stable and secure, the best solution is for the yield rate provided by the project to users to be consistent with the treasury bond yield rate;
Composability: Before regulation imposes restrictions on access permissions to RWA assets on the chain, expanding the usage scenarios of users’ treasury bond RWA tokens as much as possible is an important factor for each project to gain greater business volume in the medium to long term.
In the medium and long-term competition, perhaps due to the deepening of regulatory intervention, some lightweight KYC projects may have greater opportunities.
NFT, GameFi, and the Metaverse
A review of 7 popular full-chain games
The article provides a detailed introduction to Dark Forest, Loot Survivor, Treaty, Isaac, Mithraeum, Influence, and Wolf Game from four aspects: development team, project background, full-chain technology, and economic model.
Paradigm: The unique value and open issues of full-chain games
The two major sources of UGC - modules (such as Minecraft) and open economies (such as EVE), are the possible breakthrough directions for full-chain games.
The strongest arguments for putting games entirely on the blockchain are composable modifications and a permissionless open economy. The combination of composable mods and a permissionless economy could lead to large on-chain game worlds. In addition, composability is inherently financialized, and full-chain games need to figure out how to leverage financialized pressures without being consumed by them. The research directions include anti-fragile design, permission setting, and order flow auction.
There are 4 research directions for the whole chain game in the future: TEE, MACI (used to enhance the anti-collusion ability of the voting system on the chain), custom Rollups, and use ZKP to enable private state.
Ethereum and Scaling
The Past and Present of LSD: Evolution Path, Track Panorama and Interest Rate Yield
One way of staking market size is to add up the market caps of all PoS-based chains. This figure is approximately $318 billion. 72% of them are Ethereum. Ethereum has one of the lowest staking ratios in the network. Ethereum is the only network that offsets the daily issuance by burning a portion of the fees. The fees burned on Ethereum are proportional to the usage of the network.
Panoramic view of staking track
Liquid Staking Derivatives (LSD) bring a few benefits: First, it allows retail participants to invest without losing access to their collateralized assets. Users can withdraw their earnings at any time. Second, people can participate in staking even with a small amount of ETH. Lido is one of the few crypto projects capable of profiting from idle assets at scale. About $15 billion in ETH is staked on Lido. As long as ETH can generate income and funds dont flow out, liquidity-backed investment companies will be in good shape. Also, unlike Uniswap or Aave, Lido is less exposed to market volatility. Lido takes advantage of peoples laziness.
EigenLayer is one of the leading middlewares that supports remortgage. Blockspace is the product of decentralized trust provided by the nodes or validators beneath it. The greater the value of this decentralized trust, the higher the price of block space. The re-staking mechanism allows us to go deeper into the decentralized stack and create a market for decentralized trust. EigenLayer allows Ethereum’s validators to repurpose their trust and enable new blockchains to benefit from the same trust.
Not every chain needs to build its own security. Because not every chain is trying to become a global settlement network like Ethereum, Bitcoin, or SWIFT. Absolute security does not exist in public blockchains. Blocks are probabilistic (its not uncommon to roll back a block or two), security is a scope. While the team is focused on building the application, it may be more focused on the user. Getting security to a point where it can compete with chains with huge network effects is slow and painful. Whereas if the item is an application-specific chain, the user does not care about security, as long as it is sufficient for the provided application.
Interpretation of Binance Research L2 Market Report: Evolutionary Trends and Track Players
L2 has evolved new trends, including Superchain, L3, and Hyperchain. These advancements are expected to be the cornerstone of the next generation of Ethereum extensions, simplifying the development process, enhancing security, and establishing greater interoperability within the ecosystem.
Optimisms OP stack is moving towards a super chain with a high degree of interoperability, and the Bedrock upgrade represents another step towards their vision.
Arbitrum is also at the forefront of Ethereum scaling, developing the L3 network through Arbitrum Orbit, providing a permissionless framework for deploying custom chains on Arbitrum L2.
zkSync proposes Hyperchain, a set of customizable trustless link blockchains enabling hyperscalability, improved composability, and enhanced security.
StarkWare is developing a multi-tiered solution, exploring L3 for custom extensions and leveraging L2 for general purpose extensions.
Polygon 2.0 aims to create the Internets value layer by unifying its suite of L2 solutions, which includes Polygon PoS, Supernets and zkEVM.
Mint Ventures: Planning for Cancun upgrade, who is the better choice, OP or ARB?
The profit model of L2 is clear and simple. On the one hand, it purchases storage space from the trusted DA (Data Availability, data availability) layer, and backs up its own L2 data (so that when there is a problem with L2 operation, it can be restored through the backup data) On the other hand, it provides users with cheaper block space services and charges accordingly. Its profit comes from: L2 charges (basic fee + MEV income) - the cost paid to DA service providers.
L2s fee collection and L1s cost payment are both executed by the L2 sequencer, and the profits also belong to the sequencer. At present, the OP and ARBs sequencers are both run by the official, and the profits also belong to the official treasury. Of course, a centralized sorter means extremely high single-point risks, and OP and ARB have a long-term commitment to decentralizing the sorter. At that time, ARB and OP tokens will receive economic value empowerment in addition to pure governance.
The former L2 project served users who used their own block space, while Superchain and OP stack expanded the definition of users to L2 operators, starting from a 2C (here L2 developers are also defined as C) The business has become a 2 B2C business, which has built a new source of value and a moat for OP: multi-chain network effects, scale effects, and a community of interests.
Corresponding to the rapidly rising business data of OP, the valuation of the OP main chain relative to ARB is becoming more and more attractive. Although Arbitrum one is an L2 single chain, it still maintains a slight lead in business data compared to other L2s, but its user share in the entire L2 market is actually declining rapidly, because a large number of new and old users are flowing to the OP system and the hybrid system. L2. After the Cancun upgrade, the lower the ratio of L2 users benefiting from the greatly reduced cost of L2, the higher the profit of their L2 operation. The higher the rate of transfer activity improvement brought about by L2s reduction of layer-2 fees, the higher the L2 operating profit.
It is necessary to pay attention to the following risks of OP: ARB chooses to open its own L2 license, and uses the same method as OP to compete for the total network population of L2; the overall competition in the L2 service market is fierce; the overall ecological development of Superchain, whether the value can be transmitted to the OP Foundation and OP tokens; valuation risk (whether Price in is expected).
Crazy Growth, an overview of the OP Stack ecological project in one article
Optimism keenly seizes two windows of opportunity: one is the OP airdrop and incentive plan last May, and the other is the new narrative of the OP Stack super chain. Optimism seems to have finally found an effective new path for differentiated competition that can Really stand firm in the competition with Arbitrum and not fall behind.
Relying on the Synthetix ecology in the early stage, and relying on the OP Stack universe in the later stage, OP Stack is building its own super chain ecological narrative.
Also recommend two good articles about Rollup: Interpretation of the importance of Rollups decentralization from multiple angles》《Rollup Economics 2.0: Analyzing the multi-layer economic relationship of mature Rollup ecology》。
New ecology and cross-chain
Multicoin Partners: 7 Reasons Modular Blockchains Are Overrated
The modular system increases the complexity of development, the modular chain cannot execute code faster, the modularization increases the transaction cost of users, the application Rollup will not create new profit opportunities for developers, and the application Rollup cannot solve cross-application congestion Problem, flexibility is overrated, scaling DA does not require re-staking, built for application developers.
DAO
On Emergence: Why DAOs Will Rise?
The SeeDAO Tang Hans long article.
Comparison of the characteristics of VC and investment DAO
There are usually two types of participation thresholds for investing in DAOs: membership fee only; membership fee + contribution.
Six key issues for investing in DAOs are risk management, dynamic voting rights, cross-DAO reputation system, DAO incubator, DAO-to-DAO service, and DAO legal toolkit.
Hot Topics of the Week
In the past week,SpaceX Writes Down $373 Million in Bitcoin，Crypto Markets Slump，Coinbase Approved to Offer Compliant Cryptocurrency Futures Trading to Eligible U.S. Customers，Europe’s first spot Bitcoin ETF launched，Sei announces token economy: Airdrops account for 3%, early contributors account for 20%, andEnable airdrop，Celsius plans to shut down its app and allocate $2.03 billion in crypto assets within 90 days, PayPal has been selected to distribute BTC,PayPal will launch a cryptocurrency center for specific users, allowing specific users to conduct cryptocurrency transactions，ARK Invest Submits Application for New Digital Assets and Blockchain ETF ($ARKD)；
In addition, in terms of policies and macro markets,Monetary Authority of Singapore Has Finalized Stablecoin Regulatory Framework, the issuer needs to meet information disclosure and other requirements (Detailed explanation), Li Jiachao:The Hong Kong SAR government attaches great importance to the development of financial technology and Web 3.0；
In terms of opinions and voices, 1confirmation:Prediction markets will be the next to attract mainstream attention，ArkStream Capital：The market may not only be L2, new public chains cannot be ignored，Vitalik：X platform community notes feature may be the closest to an example of “crypto value” in the mainstream world, V God talks about AI:Don’t worry about being replaced, we will eventually adapt to the new wave of technology，Buterin claimed that XRP is completely centralized, causing dissatisfaction in the XRP community，PayPal executive: The company plans to integrate PYUSD with the DeFi ecosystem and ensure it is launched on CEX as soon as possible, founder of Wintermute:The YFI Loan and CRV Plan aims to achieve a win-win situation and there is no market manipulation, founder of Aave:GHO will return to anchoring when improvements such as the stability module are introduced in the coming months；
Institutions, large companies and top projects,Visa tests support for credit or debit cards to pay for on-chain gas fees in fiat currency，Kraken surpasses Coinbase to become the most liquid altcoin trading market in the United States，CyberConnect is open to receive airdrops, the Aave community passed the aCRV OTC transaction proposal,Strategically purchase 5 million aCRV tokens using 2 million aUSDT from the Aave DAO treasury，Immutable zkEVM testnet is online, the mainnet is expected to be released in the fourth quarter，Unibot launches unified trading terminal Unibot X，Shiba Inu L2 solution Shibarium mainnet online，friend.tech will airdrop bonus points to test users；
NFT and GameFi Space, DeGodsplummeted overnight，Lianchuang Finny will leave, still optimistic about DeGods and y00ts，Coca-Cola as Onchain Summer event brand at BaseChain Release Series NFTs…well, another week of ups and downs.
With Editors Picks of the Week seriesPortal。
See you next time~
