Original compilation: PANews

Original compilation: PANews

The next bull market will be driven by technologies and trends that are still building in the current bear market, but not all technologies or trends are equally valuable. So, let’s explore which crypto trends could inspire the next bull run in this article.

In fact, we can use a framework to assess encryption trends, the main factors considered by the framework include:

1. Innovation

2. 10 times value potential

3. Total Addressable Market (TAM)

4. Value capture

5. Competitiveness

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1. Application protocol

In the past, the encryption industry seemed to place more emphasis on network protocols than application protocols. But now, the dynamics of market competition have undergone subtle changes. The new ecosystem will go to great lengths to achieve EVM compatibility so that application protocols can be easily deployed.

As blockchain competition becomes more and more fierce, execution environments such as EVM begin to explore commercialization and profit models. In this case, encrypted applications have gained a more solid industry positioning. Not only that, but the encryption application itself is looking for a more optimized business model, aiming to accumulate more "bottom line revenue".

Application Protocol Development Trend

1. Core features

• Portability: APPs can now easily adapt to new (EVM) blockchains;

• Profitability: Using the stablecoin model, application protocols can generate "bottom-line revenue";

• User relationship: Compared with traditional network protocols, application protocols can generate better user associations.

2. Key differences

• Sustainability: the application protocol will benefit from the competition of the basic chain;

• Unforkable: The minted stablecoin liquidity will not face the risk of fork;

• Verifiability: The product and team are battle-tested.

3. Main challenges

• Incentives: need to provide ETH incentives, or provide excess incentives;

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Favorable factors

1. Ecological Fund

• The ecological fund will attract more users to the APP;

• APP will accumulate revenue and brand power;

• Use brand power to expand more blockchains.

2. Business optimization

• Product upgrades will increase revenue;

• Source code licensing will reduce the risk of forks;

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unfavorable factors

1. Supervision

• Compliance requirements from U.S. regulators will limit user base growth;

• Stablecoins are expected to be subject to additional regulation;

2. Encrypted user experience

• Users have negative perceptions of crypto wallets and browsers;

• Lack of accessibility limits user base development;

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2. Decentralized social

Decentralized social networking provides people with on-chain reputation, organization (DAO) and content ownership, among which content ownership is the key, because it provides a way for people to finally obtain the value they create, which means that the Internet will rebuild the value stream .

Decentralized social networking is a completely open, personalized and "possessible" social media. Social APPs can create independent profit models, and users can also earn income through the content they create. The main products in this field include data Hosting, social graphs and social applications.

Decentralized social development trend

1. Core functions

• Income: There are various profit models, such as P2E;

• Open data: social graph data can be migrated between applications;

• Scalability: Decentralized social networking is open source and fully customizable.

2. Key differences

• Larger addressable markets: including social network advertising and digital commerce;

• Defensibility: social graphs and infrastructure can be completed quickly and effectively consolidated;

• "Portable ability": Developers and users experience more convenient acquisition.

3. Main challenges

• Scalability: The scale of daily active users of decentralized social applications is generally high, which will put a certain pressure on the blockchain;

• Privacy: The data of decentralized social applications is open, and due to the lack of privacy, some users may feel unhappy;

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Favorable factors

1. The user “owns” the content

• Through NFT, users hope to own and share content;

• User-owned content will enable more functional designs;

• When users have mastered the content ownership, user stickiness will be further improved.

2. Social investment

• Investment activities will become more social, such as WSB and DAO;

• In the past, there was a lack of native social investment platforms, and there may be greater development potential in the future;

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unfavorable factors

1. Mobile encryption will be restricted

• Encryption integration on mobile is not efficient;

• iOS has historically been a "firm gatekeeper";

• Greatly limits the available user base.

2. Data problem

• Social application products usually generate massive amounts of data;

• The current blockchain is difficult to handle massive transaction data;

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3. Web3 games

The goal of Web3 games is to allow players to have ownership of their in-game digital items, and use tokens to create an in-game economy, and then promote players participating in the game to gain a sense of accomplishment in the game and become attached to this feeling, and are more willing to play in the game Invest funds in.

Driven by the "earn while playing" game model like Axie Infinity, Web3 games are becoming more and more popular, and more and more Web3 games have begun to integrate Token into their own mechanisms. While there hasn't been a single sustainable Web3 game to date, the space has attracted significant investment to develop the next "big game".

Web3 game development trend

1. Core functions

• Incentives: Players can earn income by investing game time;

• Player-Owned Content: Players own "game content ownership";

• Gaming is easy to pick up: Quicker pick-up helps further drive adoption of Web3 games.

2. Key differences

• High income: Participating in earning games like Axie Infinity may earn more income than participating in DeFi;

• Defensibility: The minted stablecoin liquidity will not face the risk of bifurcation;

• "Portable ability": Developers and users experience more convenient acquisition.

3. Main challenges

• Competitiveness: Compared with traditional games, Web3 games are still at a disadvantage;

• Instability: The economic stability of the game needs to be improved;

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Favorable factors

1. E-sports + market growth

• E-sports-driven games are more popular;

• The game market will continue to expand to the mobile terminal;

• The game industry is easy to attract investment, which in turn drives the market to grow significantly.

2. Users “own” the content

• Gamers prefer to “own” content themselves;

• Gamers have a better chance of profiting;

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unfavorable factors

1. Web3 Game Mechanism Design

• For multiple game projects operating in the open market, it is more difficult to control;

• An excessively long development cycle will increase the risk of game mechanics;

• Product/market fit is difficult to assess.

2. Game distribution problem

• Major game distribution is still controlled by big companies like Apple;

• Cryptographic integration for games is still limited;

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