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About DeFiKingdom, Subnet and Cross-chain, Harmony, Future Shape of GameFi, AXS Killer
DeFi Kingdom (hereinafter collectively referred to as DFK) is the first subnet project supported by Avalanche. DFK will deploy the DeFi Kingdom Crystalvale version (hereinafter collectively referred to as DFK Crystal Palace) on Avalanche in the form of DFK Chain.
DFK Crystal Palace will have its own token, CRYSTAL, which will start liquidity mining incentives after release, in the form of AVAX/JEWEL/CRYSTAL single-currency/dual-currency LP. Avalanche will use AVAX tokens worth 15 million US dollars to motivate DFK Crystal Palace. JEWEL will be used as a common gas fee for the DeFi Kingdom multi-chain ecosystem, and the burning and deflation mode will be turned on.
After the release of DFK Crystal Palace at the end of March, we will soon see the impact of the launch of CRYSTAL on the price of JEWEL. The team's incentive design for the LP pool will affect the price of JEWEL to a certain extent. The team has established the core direction of taking JEWEL as the mother currency of the DFK ecological universe. Therefore, after the release of DFK Crystal Palace, the price of JEWEL is likely to usher in a wave of increases.
The DFK team is more conscientious. There were many opportunities to squeeze users, but they chose to grow together with the community: the DFK project party rejected the invitations of several exchanges to list (listing is an overdraft consumption before the game is fully developed. the behavior of)
Since the team has not yet developed game battle modes such as PVP, it cannot be denied that DFK is still a DeFi under the guise of GameFi. In the early days of DFK, no institutions entered the market, and there was no low-cost lock-up chips from institutions, so there was no continuous selling pressure; the important thing is that in the past three months, the DFK team has resisted all opinions, regardless of the loss of users, and has not developed games. Stick to doing your own Subnet and cross-chain. This strategic choice requires courage.
At present, most JEWEL chips are still locked (most of the reward chips provided with LP are locked), and will be unlocked successively in July this year, with a linear unlocking period of two years.
Because DFK's game has not yet been developed, JEWEL still has a lot of uncertainty. The deployment of DFK on Avalanche this time is to establish the positioning of multi-chain GameFi, which is of great significance. In terms of valuation, it is definitely not possible to simply use a single game for valuation, but it is more appropriate to use Metaverse for valuation. The second is to buy time, let the development team continue to develop the game, so that DFK can get breathing time to continue its life.
For the Harmony public chain, its biggest achievement is the incubation of the DFK project. DFK is pretty much the only game playable in the town of Harmony. Due to the performance problems of Harmony itself, players who have used Harmony know that Harmony is relatively laggy. Since JEWEL is established as the mother currency of the DFK universe, and the mother currency is on a Harmony chain with poor performance, will it be the future? A big worry?
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About LUNA, Decentralized Stablecoin, Public Chain, Appchain, Protocol Theory and the Essence of Public Chain
In the past month, the strongest project in the public chain sector is none other than LUNA. As the market bottomed out in the short term, the price rebounded strongly by 100% and returned to ATH and broke new highs.
The previous guess is that all projects in the LUNA ecosystem serve the stablecoins UST and LUNA, and UST and LUNA will absorb blood from all ecological projects. One reason for this impression is that part of the tokens of the LUNA ecological project will be airdropped to Users who pledge UST and LUNA.
In terms of strategic direction, LUNA's core strategy is to describe the grand story of "Decentralized Stablecoin" around the stablecoin UST. And the mechanism of burning LUNA to forge UST, in the process of increasing the share of UST, LUNA holders can also get a price increase. In essence, it allows players to enjoy the dividend of an increase in the market share of stable coins.
We can get a glimpse from the experiments of algorithmic stablecoins such as BASIS/ESD two years ago. Although these generations of algorithmic stablecoins were sacrificed tragically in the end and ended up being zero, the reason why there was a crazy speculative frenzy at that time was because stable The upper limit of the cryptocurrency market is huge. Once a certain algorithmic stablecoin reaches a strong consensus among a wide range of user groups, the return on investment is calculated by hundreds and thousands of times.
LUNA finally won out among a series of algorithmic stablecoins. At least for now, it is a success. Whether it can continue to increase its market share and maintain its leading position in the future needs further observation.
From the famous theory "Fat Protocol" proposed by USV that laid the foundation of the industry at the beginning, to "Thin Protocol, Fat Application" proposed by Placeholder, and then to "App Chain" proposed by Cosmos, the protocol theory has gone through seven or eight years of iteration.
LUNA is a very typical App Chain protocol. On the surface, LUNA is a public chain, but it is actually an application with a stable currency as its core. Some people say that LUNA is worth investing in because it is both a public chain and an algorithmic stable currency. So what is the priority of the two narratives of public chain and stable currency? I personally think that the core is a stable currency, and the public chain is just a layer of shell narrative.
In other words, any application that has gained a broad user base can build its own public chain in the later stage. Axie in 21 years is a typical example. After becoming the leader in the GameFi field, the team chose to leave Ethereum and build its own Ronnie public chain to form a closed-loop ecology. On the one hand, it is because of the high fees and limited performance of Ethereum, and on the other hand, of course, self-built public chains can obtain greater benefits.
This is also the reason why the public chain is a grand narrative. Everything can be a public chain, as long as you have enough confidence and capital: users, funds, cash on hand.
We can vaguely see that the APP Chain concept first proposed by Cosmos will lead a future trend, that is, APP Chain Protocol. As a public chain, only 1-2 popular applications need to appear in the ecology, and the public chain itself can obtain huge value. The public chain is in line with the narrative of APP Chain.
In terms of the composition of the public chain, stablecoins, DEX, and lending are the three pillars of the public chain. For LUNA, stablecoins have achieved unprecedented success in history, so if you think about it, DEX and lending will be the two major investment opportunities in the LUNA ecosystem.
As the first DEX of LUNA, Astroport has also made great progress recently. The liquidity of ecological core assets such as LUNA/UST/ANC has been added to Astroport, and the trading volume is constantly breaking new highs. Currently, it ranks first in the DEX daily trading volume. to Top5. Of course, this is also due to LUNA's recent strong counterattack.
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Regarding the continuous pull competition of public chain TVL, the moisture content of TVL, and the premise of judging projects
The competition of the public chain is a continuous pulling process, and the TVL increase or decrease of the public chain is an intuitive data.
The TVL of the public chain has its own upward spiral. The parent currency of the public chain is mostly PoS assets. Most of the standard currency is in a pledged state. The pledged parent currency accounts for a large proportion of TVL. Therefore, as asset prices rise, TVL will also increase. It rises accordingly. But this part is TVL with moisture. After excluding this part of TVL, the net inflow of stablecoins outside the protocol is the real growth of public chain TVL.
In the past month, Terra’s TVL has increased by 70%, partly due to the inflow of TVL withdrawn from Fantom (the reason for ac withdrawal), partly due to the growth of the protocol itself, which is mainly due to ANC’s 20% annualized stable currency deposit rate . The deposit rate of mainstream DeFi protocols is far below 20%. Of course, this requires a large amount of UST subsidies, and the subsidies can only last for more than one year. In terms of TVL, ANC has slightly surpassed AAVE, and the valuation of the two is equal at 2.5 billion US dollars.
Fantom was unlucky. Originally, Solidly’s publicity campaign attracted the attention of the entire industry. However, AC’s sudden announcement of withdrawing from the circle caused Fantom’s price and TVL to drop sharply. Whether the public chain is successful or not depends on the founder, and AC is an idealist and emotional person (not derogatory). This move is not surprising. It's just a pity for Fantom, the momentum has been built for so long, and finally a squib was released.
The overall TVL performance of ETH is stable, but due to the steady growth of the TVL of protocols such as LUNA/AVAX, the proportion of TVL of ETH is showing a downward trend. The continuous decline in the TVL share of Ethereum is a strong proof that the multi-chain era is slowly coming.
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Advantages of Cosmos and Polkadot, Cosmos ecological project OSMO/EVMOS, and Appchain tokens
For the past four or five years, Cosmos and Polkadot have been pulling the wind. During 2018-2019, one of the most frequently discussed topics in the circle was which one is better, Cosmos or Polkadot. That kind of momentum is bound to separate the two.
The enlightenment given by these two cross-chain projects is that judging projects must be placed in the dimension of a period of time, things are always changing dynamically, and in the fast-growing industry of Crypto, the status of projects at different stages is really different. Don't. As for the wind reviews after 2022, it is obvious that Cosmos has the upper hand. From the TVL data, it can be seen intuitively that Polkadot’s TVL has dropped by 70% within a year, which is somewhat surprising.
The respective advantages and disadvantages of Cosmos and Polkadot have been talked about by the industry in the past few years. It is worth mentioning that Cosmos gives community users a bonus. Quite rich. At the same time, most of the ecological projects of Cosmos do not have private placement chips, but a huge proportion of airdrops, giving most of the benefits to community token holders. In terms of giving back community dividends, Cosmos is obviously doing a lot better than Polkadot.
Although LUNA and Cosmos are both large Cosmos ecosystems, they have been relatively fragmented in the past few years. Since the introduction of UST on Osmosis this year to break through the two systems, the relationship has only become a little closer. Do Kwon, the founder of LUNA, has also stepped up the promotion of the Cosmos ecological currency since this year.
Why Cosmos' DEX Osmosis is successful, here is the point of view of "Sky Island Teacher":
"Compared to the design of traditional DeFi governance tokens, App Chain's NativeToken "is itself an underlying asset", and has greater design space and imagination in value capture, and can integrate some Ponzi designs to achieve two purposes at the same time : 1. Improve network security 2. Realize value capture. The App Chain model is superior in terms of value capture.
I think there are a few projects that are more suitable for this Narrative: Needless to say, LUNA, the best is Ponzi Tokenomics + strong consensus + financial resources. OSMO Stake, Lp Bond, Superbuild Staking, and each coin is equipped with OSMO transactions. RUNE node double pledge + LP and RUNE mandatory pairing + synthetic asset quality. These three have found their own market segments, and at the same time have excellent economic models. "
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About Avalanche and Subnet, the possibility of becoming GameFi Chain
Avalanche will release Subnet at the end of March, and at the same time spend 300 million US dollars to stimulate the Subnet ecology. Subnet is similar to the application chain of Cosmos, with an independent security model, and can be a verification node by itself. The launch of Subnet will further strengthen the industry consensus on the Appchain narrative. At the same time, Subnet will lead the second wave of market on Avalanche, and Crabada and DFK, as the two first batch of projects receiving Subnet's ecological incentives, will bear the brunt of the benefits. Judging from Avalanche's classification of subnet ecological project funding, Avalanche is focusing on GameFi. Therefore, Avalanche is likely to become a public chain specialized in GameFi in the future.
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About Solana and its declining defects, derivatives DyDx and GMX, and the way the public chain breaks through
Solana has declined slightly after 22 years. The main reason is that most of Solana’s previous ecological projects were led by Alameda. The token economic design of the project was mostly low circulation, high valuation, and endless low-cost selling pressure after listing. This is in line with the style of SBF. There are almost no bonuses left to community players. Over time, fresh traffic is slowly lost. The Solana ecological project gives community users far less profit margin than Cosmos/Avalanche/LUNA. However, recently, Stephen, the SocialFi project on Solana, has opened up a wave of independent market by virtue of its unique application scenarios.
However, Solana's underlying architecture is naturally suitable for derivative projects. A previous guess was that there would be one or two on-chain derivative projects that rival DyDx on Solana. The derivative projects on Solana can be regarded as the most numerous public chain ecology besides Ethereum. Embarrassingly, however, derivatives themselves have some limitations. The user threshold of derivatives is extremely high, and it is destined to be only suitable for a small number of professional traders. Therefore, the existing derivatives projects are the next best thing to make structured products to adapt to popular fool operations. The disadvantage of structured products is that users will lose money under extreme market conditions, and once structured, players can only choose one-sided bets. Therefore, the track of derivatives needs to be further explored and broken through.
The current Product Market Fit products are order book-style on-chain contract products. Typical two projects are DyDx and GMX. GMX is a fully community-driven, non-institutional investment, complete chain derivatives contract project. The idea of GMX is somewhat similar to that of DFK. They all hope to gain new users by deploying on multiple chains. The deployment of GMX on Avalanche in recent months has proven to be successful and effective. Various data indicators such as transaction volume, number of users, and income dividends have all increased.
But GMX also has some bottlenecks. The first is the problem of pulling new ones. The current GMX is in a relatively reasonable valuation state. Users are saturated. The number of daily active users on each chain remains stable at 300-400. If you want to further increase the number of users in the future, you must adopt means of attracting new users. The team is already intensively developing the "user promotion and pull new" function. The second is how many contract players in CEX can be drawn. Changing user habits is extremely difficult. The third is the development iteration capability of the project, which is optimistic so far, but the core development and founder of the project is anonymous development, which is also a layer of uncertain risk.
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About the Web3 middleware protocol POKT
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About APE currency issuance, NFT aggregator, Opensea competitor Looksrare, the third wave of PFP
Ape issued tokens, and BAYC acquired Punk and Meetbit to combine vertically and horizontally, igniting the PFP market again, and BAYC's series of strong capital operations also left other PFPs with no breathing room. The overall valuation of APE listing is 10 billion U.S. dollars. In terms of valuation, there is not much opportunity for the secondary market. A series of capital operations by Yuga Labs have made PUNK/Meetbits/BAYC holders/investors/parent companies happy to make money, and those who ultimately lose money are some players who bought APE in the secondary market. However, if a certain proportion of the lost money can be returned to the PFP market, it can be regarded as a disguised injection of funds into the image market through the issuance of coins, and the rise of blue chips such as Auzki/Doodles/CloneX in recent days has more or less explained this point. All in all, APE’s token offering has led to more funds pouring into PFP. We are likely to start the third wave of PFP
Of note is NFT aggregator Gem and Opensea competitor Looksrare. The biggest function of the NFT aggregator is to make it easier to sweep the floor with Sweep NFT Floor, which is convenient for large funds to participate in buying pictures. The aggregator routes to two NFT exchanges, Opensea and Looksrare. Therefore, APE's currency issuance and NFT aggregator Gem have both contributed to the transaction volume of Looksrare. In addition, Looksrare's product iteration is also relatively powerful.
A smog-attack project like Looksrare, that is, the project initially tells the story of "the community version of XXX". Once you want to seriously and reliably develop products and do projects, it will be impossible for thousands of people to go. We all know that leading projects like Opensea/Metamask occupy 99% of the market, and it is very difficult for competing products to come from behind and compete for market share. From an investment point of view, it is precisely because giant projects such as Opensea and Metamask with a valuation of 20-30 billion US dollars leave players with no profit margins, so everyone will choose the community version of XXX to obtain high odds.
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About changes in positions
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About BTC/ETH large-cap stock returns, short-term market trends, and changes in market structure
The long-term flat operation of holding BTC and ETH alone will greatly reduce the income in the next 5-10 years. The reduction here refers to comparing future yields with those of the previous two cycles. Although I am an amateur in macro judgment, I also venture to make predictions. The future trend of the broader market will be high and wide fluctuations in the short and medium term, and a long-term spiral rise. This is the premise for a hundred flowers to flourish in the industry, stabilize the market, and let the rest fly around. To some extent, this also reflects fairness, that is, "you can't get too high excess returns by lying flat"
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About the Web3 project, the cross-chain bridge and the final form of the cross-chain
Various Web3 projects are also hotly discussed, but without exception, the biggest problem of these tool projects is value capture. I personally think that the composition of a good project is intuitive and stable growth data ➕ can cause everyone FOMO points ➕ a good token economic model, typically LUNA, UST data growth is very intuitive, and the upper limit of the story of decentralized stablecoins It's too high, plus Ponzi's economic model.
However, today's various Web3 projects are basically unable to form an economic flywheel and Ponzi, the so-called single tree cannot support. I think we need to give this track some time. There are no bad projects, only bad times.
The cross-chain bridge that was optimistic before has changed a lot recently. I think the cross-chain bridge cannot capture the maximum value, and the cross-chain Dapp may be the ultimate form and beneficiary of the cross-chain bridge. Simply put, for example, the multi-chain AAVE is covered by the cross-chain bridge. The cross-chain bridge itself is like a project such as DeFi derivatives. It has been wanted to become popular for many years but has not been popular. It is still a tool in nature and cannot form an effective Ponzi and flywheel effect.
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About Ethereum, excess returns and personal expectations
Individuals will not hold too much Ethereum. Ethereum has grown into a major asset class. In terms of cost performance, it is not as high as the new altcoins, and its stability is not as strong as USD. From the perspective of asset appreciation, Ethereum is a very poor asset. It means that Ethereum has been unable to obtain super-strength Alpha. Note that the emphasis here is super-strength, for example, 100 times the income. And holding Ethereum itself for a long time is an extremely correct choice.
Because for the whole society, holding large-cap stocks BTC and ETH with a considerable amount of capital can lead a nourishing petty-bourgeois life without any more effort and tossing. For most people, being able to lie flat with BTC/ETH is an unattainable dream for most people in this life. The so-called "your life, my dream". It is therefore entirely a personal choice based on individual circumstances.
In any case, please remember: In the 100 years of this century, players in the Crypto industry are undoubtedly the luckiest generation.
