The merger is imminent, what opportunities, risks and challenges will Ethereum 2.0 bring us?

On July 21st, Cointelegraph Chinese held a Trends event. The theme of this issue is "Merger is coming, what opportunities, risks and challenges will Ethereum 2.0 bring us?" 》, with Cointelegraph Chinese CEO Tracy as the moderator, invited Jiang Zhuoer, founder of Lebit Mining Pool, Yang Mindao, founder of dForce, and Gamefi/Defi Bulider kvc.eth as guests of this event.

The following is the content of the activities:

Tracy: First of all, I would like to ask Mr. Mindao to give you a brief introduction. What is the merger of Ethereum? What are the main changes? The merger time is currently set for September 19, will this time be delayed like the last time?

Yang Mindao: Ethereum has always been a PoW mining mechanism similar to Bitcoin in the earliest days, and then the 2014 white paper actually listed the PoS roadmap. At that time, we expected that PoS would be realized in about 16 or 17 years , but from 2016 to 2017 and 2018 in the entire currency circle, ICO was very popular at that time. Later, after the entire market entered a bear market, there were many different understandings of the difficulty of development, so the development of the entire PoS was actually delayed for a long time.

The current consensus of Ethereum is that there are two sets running. PoW is a verification logic of the current main network, but PoS has been running for about a year, and you can also see that the general network switching formula algorithm is Cut through very quickly once. However, Ethereum itself carries a large amount of DeFi funds and includes various applications, so it is now adopting a dual-track system. The second track PoS has been running for a year, and now it is time to switch to PoS, but I think The PoS switch will not have too many obvious feelings on the user side. For example, the gas fee will not be reduced, and the transaction confirmation speed will not change much from before.

The entire Eth2.0 roadmap is not completed after the merger. In fact, the 2.0 roadmap may take about 3 to 5 years to realize, and the merger is only a slice of the consensus algorithm. So from the perspective of transaction experience, there is not much difference in terms of the overall throughput of the blockchain. I personally think that there will be great changes in the entire encryption market.

After switching to PoS, Ethereum will truly change from non-deterministic transaction confirmation to transaction confirmation with Finality, which is very critical for Ethereum as a global financial settlement network.

Another biggest change is the emergence of interest-bearing assets. Now it can be considered that most coins except Bitcoin have already adopted PoS, which is what we call assets that generate interest on the currency standard. I think this matter is of great significance, because everyone knows that Bitcoin itself has no interest. If you want interest, you can put it in CeFi to earn interest, put it in DeFi to lend out to earn interest, or put it in mining companies for financing needs, but it is not native interest earning.

What about after PoS? What will become of Ethereum? Ethereum itself has native interest on the chain. I personally think that the attributes of Ethereum will change from commodities to more like Money. It has its own source of native interest, and then it is derived in large quantities. Product packaging, such as trust ETF, the market has become lively, which is very meaningful from the perspective of financial products, and it is the same for currency holders. You hold ETH now, but there is no better place to go Earning interest, if you put it in DeFi such as Compound and Aave, firstly there is contract risk, and then the interest is actually very low. If you turn it into stETH and convert it to 2.0 staking, its interest will be very high. Another very important change in the merger is the change of the economic model. I always think that the change in the 2.0 stage is an ideological breakthrough. From the user side, it has completely become a source of assets that you can also obtain original interest in your wallet. There is also a more critical milestone, that is, the conversion of Ethereum to PoS means that the ESG hat of the entire currency circle has been removed.

Musk sold Bitcoin today. In fact, I think his so-called increase in cash flow on the balance sheet may not be true. I think the greatest pressure lies in ESG, that is, concerns about environmental protection and energy. The topic of ESG is actually more social, but I think it is very important. If Bitcoin always wears the hat of ESG, this issue will become a very big problem for PoW coins such as Bitcoin for a long time.

So what will happen if Ethereum is switched to PoS now? Ethereum plus other PoS coins account for 60% of the market share, then you can say that crypto itself has no ESG issues and is a very environmentally friendly market. The conversion of Ethereum to PoS changes the entire narrative. Crypto is a completely ESG-friendly industry. This is of great narrative significance, allowing the entire crypto to completely throw away the ESG hat. But from the perspective of trading experience, I don't think it will be affected in the early stage. From the perspective of future technical routes, for example, if sharding is implemented, the throughput of the entire Ethereum layer1 will increase by more than 100 times, which is very good in terms of application throughput and expansion. But I personally think that route may be more of an economic route, and the merger itself at this stage is a political and ideological battle. If this battle is won, it will be very good news for the entire crypto and Ethereum.

Tracy: Thank you very much, Mr. Mindao, for your analysis from this perspective. You just mentioned that the integration of the beacon chain and the main chain will definitely solve the current throughput problem, but you don’t think there will be a significant change in the gas fee, right? ?

Yang Mindao: Yes, in fact, everyone’s demands have changed now. When talking about the 2.0 route, for example, the gas cost and expansion issues are all thrown to Rollup. So now this trouble no longer belongs to layer1. In fact, this problem has been carried out very well now. The gas costs of Optimism and Arbitrum are very low, and the speed is also very fast.

Tracy: I am very grateful to Mr. Mindao for his high-level views. The next question I would like to ask Mr. Jiang Zhuoer, after the merger of Ethereum, the transfer from PoW to PoS, there are many debates in the industry on this issue. As for whether to take this route, Mr. Mindao just said that ESG may be the focus of the whole world As a senior miner, Mr. Jiang, how should he deal with it better from the perspective of miners? Do you think it is a good thing to convert Ethereum to PoS?

Jiang Zhuoer: First of all, everyone must understand what PoW and PoS are, because many people may have only heard the names, but they don’t know how they work. First of all, the blockchain is a decentralized system, so there is no central bookkeeper, but it is realized through node bookkeeping. PoW and PoS randomly select bookkeeping nodes in different ways, and PoW uses computing power to select bookkeeping nodes. out node. You can understand that, for example, if 100 people keep throwing dice, whoever throws a better result first, for example, someone throws 6 6s, then he has the right to record this time, and then get the record account rewards. What about PoS? It is through the method of randomly drawing people, for example, everyone will continue to randomly rotate to keep accounts. PoW depends on how fast you roll the dice. The faster the speed, the more likely you are to grab the bookkeeping rights and bookkeeping rewards, while PoS is determined by multiplying the number of coins by the number of days. Simply put, your pledge The more coins you have, the more likely you are to grab the right to bookkeeping. This is the difference in their implementation.

We can see that the cost of PoW is very high, because it is necessary to continuously withdraw funds from the system to purchase external equipment, so it will cause the currency price to have a ceiling problem, and it will lead to the loss of funds. In the relatively small Bitcoin system Back then, the problem wasn't that serious. As the Bitcoin system grows larger, problems arise that lead to the loss of funds. But PoS will not, because if you want to grab the right to bookkeeping, you need to buy coins, the money is still in the system and has not been consumed, and it has not been lost into mining machines, chips, and factory buildings like PoW. It's good to keep up.

The advantage of PoW is that it has a very good advertising effect in the early stage. For example, if a company wants to develop, it must first face the problem of attracting newcomers. If it is just to send coins to others for free, others do not necessarily need them. This is related to human psychology, but PoW mining requires newcomers to put in a certain amount of effort. First of all, the cost of mining is not high. You just need to turn on the computer and get a signal. It takes a while to get Ethereum at a low cost. Have to pay some electricity bills. Some people find it interesting. If you ask him to spend money to buy it, he is not very willing, but if you tell him that he can mine it with a computer, he is willing to try it. After spending a certain amount of time and energy, he will have a self-endowment effect.

Many miners or investors do not believe in Bitcoin at first, but when they go to the mine and see the computer room system and other scenes, they will instead believe in Bitcoin and see such huge energy and resources behind it. It is easy for people to believe something that has a substance. If it is PoS, many people will feel that it is illusory, so PoW has a very good advertising effect in attracting newcomers. Especially the graphics card mining of Ethereum has attracted a lot of young people in the technology circle or game circle. But in turn, PoW will lead to a series of problems such as environmental protection and arouse public resentment. However, POS is only weak in attracting new users, and it will not cause the system to be closed and no one will join. Therefore, it does not mean that POS will cause some unfair problems.

Now for Ethereum, does PoW need to introduce advertising effects? It is not so necessary now, because Ethereum now has enough users and profits. If we regard Ethereum as a company and Bitcoin as a company, we can use Ethereum and Bitcoin as fees. as profit. The company is valuable because someone wants to be bullish on Bitcoin. Well, Ethereum’s annual fee profit is 50 times that of Bitcoin, which means that it now has a very solid user base. Ethereum is big enough now that there is not such an urgent need to pull new ones. In addition, the graphics card mining process that has lasted for several years since the birth of Ethereum has also made the advertising effect and brand-new effect of graphics card mining reach the limit.

For example, as I have predicted for a long time, if Ethereum will increase by 1,000 times within ten years, then Ethereum will directly face the problem of capital outflow caused by PoW just like Bitcoin, which will make Ethereum’s currency The price hit the ceiling of the outflow of funds, and people continued to buy Bitcoin and Ethereum, but all the incoming funds eventually flowed to graphics card manufacturers, so it would be difficult for Ethereum to rise again.

The last aspect is the response of the miners. First of all, miners must be aware of the huge investment risks of switching to PoS very early. For example, the last batch of graphics card mining machines we bought was before the Spring Festival in 2021, and we have paid back many times until now. The reason why we no longer buy graphics card machines is that we face the risk of switching to PoS. Then in terms of income, as long as you have been hoarding coins and mining after buying it before, the income is still very large now.

On the other hand, I think it is meaningless to say that miners fork coins, because where is the value of Ethereum? It lies in the freedom of money and freedom of contract it provides. If a large number of applications and users on Ethereum and the handling fees provided by users, especially the handling fees, cannot be migrated to the miners' forks, then the coins forked by the miners are worthless. In fact, these applications have some very complicated mutual coupling and joint relationships, so basically it will not happen that some applications run on one fork, and other applications run on another fork. It is meaningless to say that it is meaningless. It is recommended that miners sell graphics cards or mining machines before the fork and replace them all with Ethereum hoarding coins.

Tracy: Thank you very much for Mr. Jiang’s sharing. Mr. Jiang also mentioned just now that players who play games know the importance of graphics card mining machines. Maybe some players may also mine Ethereum in the early days. The next question is kvc. You I have been a veteran in the game field before. For the GameFi field, what new breakthroughs or challenges do you think the merger of Ethereum will bring?

kvc.eth: Now all the stories and games we have told have already been told in 2018. Now that we are really entering the process of web2 to web3, the infrastructure is quite important. I think if the currency circle is a river and lake, Ethereum is like Shaolin. The martial arts in the world come from Shaolin, but Ethereum is indeed a bit old. When we are doing game development, it is very painful to choose a public chain. After all, choose this EVM compatible For the public chain, we still choose new public chains such as Solana and Polkadot.

I think the transformation of ETH is a good thing now. Just like what Teacher Mindao said just now, this is a change in the social system. After the system change, it can actually make the community explode with new vitality. Those developers, but after PoW is converted to PoS, everyone will feel that Ethereum has new vitality. After all, one of the reasons why many new public chains attack Ethereum is that it is too old. PoW to PoS is the first step in the revolution or evolution of Ethereum, and it will strengthen everyone's confidence in making games on Ethereum. The merger of ETH will bring great help to developers, and with the release of the new public chain, many users will choose to go to other places. If Ethereum does not make revolutionary changes, it will indeed lose users. For game developers It will still be difficult to choose.

After all, Ethereum is the ecology with the most applications, so after its transformation, users will also increase. In particular, it will give opportunities for many new users, which will benefit more ecology. In addition, there are better technical prospects, because there are actually no particularly new technologies in the past two years, and layer 2 technologies are all developing. However, if the system of Ethereum itself does not change, it always feels that it will be outflanked by others. In the end, I think this leaves time for everyone to make products. When the bull market comes, people don’t care too much about the project, they only care about the background and frantically speculate on coins. Now in the bear market, everyone will calm down and start There is more time to build, to build a good product, to really attract users, and then wait until the next round of bull market breaks out.

Tracy: Thank you very much Mr. kvc. We just briefly discussed some opportunities and challenges of Ethereum merger with 3 teachers. Everyone shared their perspectives from their own different fields, bringing new expectations for new prospects. Next, I would like to ask you a question. We have seen a round of rebound in the market recently. Everyone has many different forecasts for the rise, such as the expectation of the merger of Ethereum, the peak of CPI in the United States, etc. I would like to invite 3 guests from their own perspectives Talk to everyone about your own views on the current rising market? Let's start with Mr. Mindao.

Yang Mindao: I shared on Twitter that when analyzing the ups and downs of the currency circle, the macro aspect is a factor, but I think the macro aspect is actually a variable that can be ignored before the paradigm shift. So I basically don't understand this matter from a macro perspective. This bull market is the third bull bear I have experienced. In the last two rounds of cycles, to be honest, I think many people have no idea, because in the cycle of 13 to 15 years, only Bitcoin was tested, and the others are altcoins, and Ethereum is the largest altcoin currency. And when Bitcoin itself came out at that time, everyone thought it was a scam. Then in the bull market in 2017, Ethereum was not fully verified, and finally entered the bear market in 2019. At that time, DeFi had not yet come out, and many people still had no confidence. , I still think it might be a scam. How bad was the market at that time? Compared with traditional VCs at that time, the institutions were not very institutionalized, and the primary market basically had no money.

But let's look at it the other way around, what kind of pattern do we have at this stage? DeFi has landed, and then through DeFi summer to NFT, and then to GameFi, I think the fundamentals are hundreds of times stronger than the previous two cycles. Funding for Tier 1 institutions is adequate. One of the more interesting phenomena seen in the secondary market is that after the development of DeFi, there is no need for funds to enter the market. So seeing this wave of 70% drop, the number of stablecoins did not drop by 70%, only fell a little bit, and now it has started to rebound, so what does it mean? It shows that a lot of funds in the secondary market are still circulating in it. I think it may be too early to say that this rebound is a reversal, but I think the most fundamental reason is that all players have greater confidence in the industry.

Personally, I think the main reason is that the gamblers are all liquidated, and then the market naturally pulls back. Everyone may still have a basic grasp of where the bottom price of the industry is. The economic volume carried here is completely different from the previous two cycles. . When the industry has opportunity costs, it is valuable support. This round of rebound, including how much it can go down, I think everyone has a bottom line.

So this round of adjustments is much more benign than before, and there will be some impact on the macro level, but at least I have never regarded this as very important.

Tracy: It is unpredictable in the short term, but it is definitely positive in the long term anyway. Just now Mr. Mindao said that the institution has no money in 2018. On the other hand, the institution really has a lot of money in its hands. The technological innovation and further education projects will still attract a lot of capital, and the market still has a lot of support. What about Teacher Jiang? I want to hear you talk about the market.

Jiang Zhuoer: You just mentioned three possibilities: the expectation of the merger of Ethereum, the feeling that the US CPI will peak this month, and the other is that it should rise if it falls too much. This round of rise is entirely due to Ethereum pushing other coins to rise. Why did the merger of Ethereum basically double the value of Ethereum from the lowest point, because the output of Ethereum will drop by 90% after the merger, which is a very terrible order of magnitude , while Bitcoin halved three times in a row before falling by 87.5%. Regarding the bull market of bitcoin halving, there is a very interesting thing, that is, every halving of bitcoin will bring about a bull market. The benefits of currency halving are not reflected in the price in advance?

I made a point before that the price of the currency will rise a lot after the halving, and there are many people coming in and out of the currency circle. These people who came in were not in the market before, so there is no way to price in this benefit, so Ethereum’s The 90% reduction in production is also similar. The bull market it will bring will far exceed the bull market of Bitcoin halving, so why didn’t it rise in advance? Because it is the same as the halving of Bitcoin, the people who bought Ethereum in the future may not be in the market now, or they are still guarding Bitcoin in the currency circle. So that's why Ethereum's 90% cut is so powerful, and it's just gone up a little bit now.

On the other hand, after the merger of Ethereum, due to the deflation of EIP-1559, it will reduce the inflation rate of Ethereum from +2.1% to -2%. Specifically, before Ethereum 2.0, Ethereum issued an additional 5.4 million coins a year 1, about 2.9 million Ethereum can be destroyed, and the annual inflation rate is +2.1%. After Ethereum 2.0, an additional 500,000 Ethereum will be issued a year, but assuming that the burning amount remains unchanged, the annual circulation is -2.4 million One, the annual inflation rate is -2%, such a scale of deflation has never happened in the currency circle. For example, BNB, it does not directly buy coins from the market and destroy them. And if you buy coins directly from the market and destroy them, it may blow up a very astonishing market value bubble. There will be a large number of pledges in the merger of Ethereum. These coins are not liquid, so there are actually not many coins that can be sold on the market. Then, because many people need to use the Ethereum network, they need to pay service fees, and then continue to buy Ethereum from the market for destruction. Most of the Ethereum may be in a pledged state, and only a small amount of Ethereum is being traded. It only needs to sweep away a little Ethereum in the handicap, and the total market value and value of Ethereum will be greatly improved.

Tracy: I'm asking a question that may be difficult, and it does not constitute investment advice. Mr. Jiang, do you have your own target price for Bitcoin to bottom out?

Jiang Zhuoer: I predicted that Bitcoin would bottom out at around $20,000. Looking at it now, it is very likely that this prediction is true. In fact, I will buy bottoms in every bear market. In the last round of bear market, I predicted that Bitcoin would bottom out at around $3,000, and it turned out that Bitcoin bottomed out at $3,200. I predict that this round of Ethereum will bottom out at more than $1,000. In the end, it took only a dozen hours for Ethereum to fall below the price of 1,000 US dollars, and this fall was still superimposed with many factors, including a series of epic-level bankruptcies of large capitals starting from Three Arrows, and a large number of defi The serial explosion.

Looking at it now, this incident is unlikely to happen again, there will be no more serial liquidation, and the panic has been released. The environment in which the Federal Reserve raises interest rates and shrinks balance sheets has little impact on the currency circle, because the currency circle is a very fast-growing industry, and the cost of capital in the currency circle itself is very high. For example, the cost of borrowing US dollar stablecoins used to be about It is between 4% and 8%, and the Federal Reserve just increased the interest rate from 0 to 3% or even 4%. Internal interest is high. The shrinking of the balance sheet will lead to the outflow of dollars and the reduction of liquidity. However, the development speed of the currency circle is very fast, and many funds are unwilling to go out. And everything on the blockchain is transparent.

When the price of the currency fell by 70% or 80%, the US dollar stablecoin only dropped by about 14% after peaking, which shows that there are actually a very large number of stablecoins in the market that are waiting to bottom out, so I think The impact of the general environment on the currency circle is very limited, because the development speed and efficiency of the currency circle far exceed the traditional market. Traditional markets, such as U.S. stocks, have an annualized growth rate of about 5%. If the interest rate is increased from 0 to 3%, it will be a huge blow to the stock market. However, the annualized growth rate of the currency circle is between 50% and 100%, and adding interest from 0 to 3% basically has no effect.

Tracy: kvc, as far as this round of market is concerned, please share your thoughts and experiences.

kvc.eth: The emotional side of this round of the currency circle is still quite serious. We're a builder, so this is a particularly good time for us. The funds in the market did not flow out. When we experienced the bear market in 2017 and 2018, basically everyone had no money. Web 2 completely looked down on web 3. At that time, everyone was really in a state of panic, and they all came through. . Some encryption funds suffered some losses in this round because of fund strategy issues, but they still have a lot of funds. Web 2 funding is also being tried cautiously. There are a lot of funds in the market, and you can’t rely on storytelling. Everyone will move forward more pragmatically. I’m quite optimistic about the market. Either the bear market has not yet come to an end, or the market opportunity is indeed huge, so for construction As far as those who are concerned, everyone should hurry up and do things well, there are still many users and funds in the market.

Tracy: Mr. Jiang, you are optimistic about the overall development of Ethereum for a long time. Where does your confidence in Ethereum come from? How do you see the development cycle of the entire industry?

Jiang Zhuoer: Bitcoin is halved every four years, and investment already has a flow cycle. Both A-shares and US stocks have a bull-bear cycle. Many people earn a lot of money according to the Bitcoin halving cycle every four years.

The total market capitalization of Ethereum 2.0 will exceed that of Bitcoin, and it will become the leading cryptocurrency. Since Bitcoin is no longer the leader, and even if Bitcoin is still the leader, its total market value will decline, so the 4-year cycle will definitely weaken until it finally disappears. This is a slow process.

The proportion of Bitcoin's market value has dropped, and the more it falls in the future, the weaker the 4-year cycle will be. This is very important for our investment. Why did we do cycles in the past, why did we buy bottoms? Because I clearly know that the peak will be reached at this time, but there is no clear condition for halving in the future, and there is no driving force for halving, so if you can’t predict the cycle, don’t try to escape the top and buy bottoms, and the final result must be dumped get off. Therefore, using any traditional market analysis method, any traditional K-line analysis theory, the final result is to be left behind.

If this cycle is no longer obvious, then I will not engage in this kind of speculation. I will only hoard coins for a long time and never sell them. Because of the development of Ethereum and defi, it has become possible to deposit coins forever and never sell them. For example, after you deposit Ethereum, you have POS mining income, and you can live very comfortably with POS income.

Bitcoin may reach the ceiling of market value in the future, because Bitcoin does not have huge users and applications like Ethereum. It is generally said that Bitcoin will be a means of value storage, but there is a very huge competitor on the track of value storage, which is gold. After all, Bitcoin has only a very short history. In most people's minds, it is impossible for it to defeat gold, which means that its total market value is difficult to exceed gold. When the total market value of Bitcoin rises to 300,000 US dollars, it will be equal to that of gold. This price is the ceiling of Bitcoin. Therefore, the closer to the ceiling, the harder it is for Bitcoin to rise. Therefore, Bitcoin is actually not suitable for long-term hoarders. Bitcoin will become a slow-growing, something that is more valuable than gold. Of course, this is assuming that Bitcoin is not directly overwhelmed by Ethereum in the competition. It is also possible that another scenario is that the total market value of Ethereum exceeds Bitcoin, and Bitcoin is directly sucked by Ethereum, and then collapses quickly.

Due to the huge use value of Ethereum, Ethereum not only provides monetary freedom like Bitcoin, but also provides contract freedom, so Ethereum is suitable for long-term hoarding.

Tracy: From a long-term perspective, there are actually obvious differences between Ethereum and Bitcoin, especially after the launch of Ethereum 2.0, how do you two guests view the relationship between Bitcoin and Ethereum? Make a prediction, is it possible that Ethereum will really surpass Bitcoin in the future?

Yang Mindao: I personally think that 13 years ago, people who entered the currency circle actually included myself, and they were more attracted by ideology. At that time Bitcoin was a non-sovereign currency. I think I am attracted to this circle, not because of investment and finance, I am from the financial industry, I think it is more attracted by social ideology.

I held 100% of Bitcoin in 13 years, and used a lot of configurable cash. It was very interesting at that time, the pricing of the entire currency circle was based on the Bitcoin pricing standard. The decline of Bitcoin began at that time in 2013. Bitcoin has volatility, and it is particularly troublesome as a means of payment, and it is difficult to apply it as a means of payment.

Like the 4-year halving cycle Mr. Jiang mentioned just now, I think it is because Bitcoin has always been a strongly priced currency at that time, because we used the money earned from Bitcoin to invest in Ethereum at that time, and I made money in Ethereum , I vote for all defi in the Ethereum ecosystem. Every OG in the circle will have a bias on the pricing of his future investment projects.

So you see that Bitcoin not only means that the pricing status of the traditional fiat currency payment OTC has declined, but the pricing status of Bitcoin in the currency circle has actually declined sharply. Now you see that Bitcoin is rarely used as the standard currency.

Bitcoin can barely be regarded as a unit of account for storing value and a means of payment, and the means of payment or unit of measurement must be dominated by stablecoins of the US dollar. Bitcoin is like the United Kingdom, and Ethereum is like the United States. One of the most critical indicators of a country's prosperity is its population.

Because of its narrative itself and functional limitations, it is impossible for the positive population to increase sharply. Many people who come in now don’t even know what Bitcoin is. My own investment portfolio has been 100% since 2013. Bitcoin may be less than 5% until now. Ethereum itself does not have to make payments, but it can capture these applications and economic value of making payments. I personally think that Ethereum has stronger currency attributes than Bitcoin. Ethereum can capture opportunities for the development of NFT, Gamefi and other formats, so I think Ethereum can surpass Bitcoin in the next cycle.

kvc.eth: From a developer's point of view, it doesn't feel that deep. To be honest, I think that Bitcoin, as the cornerstone of the entire encryption industry, will not change. After all, the total market value of Bitcoin is still the first, which is more than 2 times higher than that of Ethereum.

There are many ecologies on Ethereum, but there are also many competitors of Ethereum, especially after switching to POS, Ethereum’s competitive advantage over other public chains has actually been lost. From this point of view, Bitcoin, as the cornerstone of the encryption industry, will not change and will not be shaken. The remaining Ethereum, Polkadot, Solana, etc. will be used as a contending ecology, which may exceed this overall. Bitcoin, but a single project may be infinitely close to Bitcoin, but it is difficult to shake the status of Bitcoin.

Yang Mindao: Is it possible for the new layer1 to exceed the value of Ethereum? My personal point of view is that I think that in the currency circle, most of the valuation basis comes from how long the currency has been in this market. For example, Ripple was born in 13 years, and the current market value is still very high, but you Ask people around who use Ripple to transfer or pay, no one has used it, no one knows what it is, but it still has a high market value, it has been circulating in the market for enough time, and there are enough holders. That's why even if the technology of Ethereum is backward, its currency attributes and liquidity make it difficult for the new layer1 to grab its market. This is why it is said that Bitcoin is 10 times or 20 times worse than Ethereum in terms of technology or scalability, but why is it still the largest market value? I think that because Bitcoin was the first to come out, it has been around for a long time, and its consensus is too strong.

Tracy: Where are the new opportunities or growth points in this field?

Jiang Zhuoer: The new opportunities are mainly on Ethereum. In the long run, if the number of transactions per second of Ethereum can accommodate all user needs, all public chains will eventually be swallowed up by Ethereum. If Ethereum can do a good job of layer 2 network and sharding, can reduce the handling fee, can accommodate as many users as possible, and finally Ethereum will realize the integration of all chains, and in this process, except Ethereum itself will In addition to the very huge development, some applications related to the layer 2 network above it will also have very huge development.

Ethereum has value because Ethereum not only provides monetary freedom, but also contract freedom. In the long run, Ethereum will overwhelm Bitcoin first, and then if the TPS of Ethereum can be improved, it will also destroy other public chains. If not, there may be opportunities for other public chains. So in addition to betting on Ethereum, I am now mainly focusing on the 2-layer network on Ethereum and some applications on Ethereum.

Yang Mindao: From the perspective of entrepreneurship, Ethereum basically has a tendency to dominate the world, so the risk of entrepreneurship in the public chain track will be very high. From an investment point of view, no matter in the past few cycles or this cycle, it is the public chain, or storage, bridge and other infrastructure that finally captures the most investment value. The TVL of many layer1s is not as high as that of the DeFi protocol, but their valuation is 5 to 10 times that of the DeFi protocol. Therefore, from an investment point of view, the new public chain, including bridges and storage, will have many investment opportunities. Many people are betting that the new public chain may have a valuation of 100 times.

Defi has opportunities on both the entrepreneurial side and the investment side, but the threshold on the entrepreneurial side may be higher than in the previous cycle. More entrepreneurial opportunities are in NFT and gamefi, because there are many application scenarios for NFT and gamefi, which are closer to the concept of consumer goods in our lives, and they are also separated from the core circle of the encryption industry.

kvc.eth: For us web2 entrepreneurs, web3 is actually a social platform, so the things we did on the web2 platform back then can be moved over. When each new platform gets new traffic, we start with three categories: games, e-commerce, and advertising.

What we ourselves have been looking at recently may be more casual and social games, these are the real crypto-native games. I think there are quite a lot of opportunities for this kind of game, and it is also quite fun, and it is also in line with the current state of boredom in the bear market or half-bear state. It is also a good opportunity to invest in some new games from the investment level, because after all, from the perspective of playability, the game can still provide value to everyone, but I think the kind of game that tells too much story has certain risks. .

From the perspective of web 2 developers, all the products of web 3 are too bad now, and there is no user experience at all. Even products like Curve are still partial to geeks, just like Linux back then. Everyone thinks it is cool , a high value, but extremely user-unfriendly. Wallet products are like taking a bomb. Once you lose it, it is all your own responsibility. Once you authorize it, it is all your own responsibility. This is actually extremely unfriendly to users. From this perspective, web3 has a lot to offer. Make a product, quickly copy this traditional fiat currency world product. I feel full of such entrepreneurial opportunities and opportunities.

Tracy: From a game point of view, how do you think the X to earn model can be sustainable in the future? How can we attract more users to come in? Do you like this model?

kvc.eth: Our traditional web 2 developers are not optimistic about this model, but I think we have to fully understand the characteristics of cryptocurrency, that is, X to earn still has value and rationality, that is, how to earn, or earn How much, and then at what level to earn.

Broadly speaking, the biggest advantage of games is to give everyone some psychological sustenance and a sense of accomplishment in their hearts. This is the core logic of the existence of the X to earn game world. It is to see how to give everyone a less addictive, but extremely addictive product. This is also a long-term method. Products that yield too much are not sustainable and don't last long.

  Note: The content of this article does not constitute any investment advice.