Where should the five mainstream narratives such as layer2 go when MEME currency is rampant?

Source: On-Chain View

The continued carnival of MEME coins and the relative downturn of mainstream narrative coins make people always have the illusion that this bull market is driven by AltCoin, which can’t help but make people full of mainstream coins return The people building on the front lines are at a loss. Is value investing about to lose to pure emotional FOMO? Obviously not.

In my opinion, the frequent breakthroughs of MEME coins are just a warm-up for the belated mainstream narratives such as Layer2 Summer, AI+DePIN, and Chain Abstraction. Big ones may be in the making:

First of all, BOME’s three-day listing on Binance became a miracle day for the MEME market. The narrative of MEME’s pure asset issuance, although the risk is very high, is like licking blood from the edge of a knife, from the initial DOGE to the last round of SHIB PEPE , MEME currency has become the “mainstream narrative” in the long-term window of no progress in the mainstream narrative relay.

But we need to understand that the fundamentals of the narrative of pure asset issuance are emotions. Some funds that prefer high risks and tend to be highly volatile will speculate on emotions. Some new OTC funds and users are prone to emotional FOMO, but emotions will eventually change. It's emotion. The low issuance and operating costs of MEME currency are destined to have a short life cycle, so don’t be greedy.

In fact, through contact with VC friends during this period, and at the same time looking at a large number of early projects in the vertical narrative direction, I firmly believe that MEME is rampant just because it takes time for mainstream narratives to ferment. Value investing will not fail. A more majestic and lasting bull market needs these mainstream narratives to relay. Next, share my trend observations:

1) AI+web3

AI+DePIN will definitely be the main narrative of this bull market. The reason is very simple: new story , strong ductility and slow landing.

The AI ​​concept will take all the attention of web2+web3 and will attract a large number of developers, VC funds and large-scale users to enter the market. Whether this round of bull market can break the vicious circle of existing funds will depend on AI to break the circle. The effect has been exerted;

At the same time, AI has great possibilities for scenario extension, including computing power aggregation, model training, model communication interoperability, intelligent automated transaction execution, AI distributed data verification, data IP ownership, etc. Wait, there is so much room for development in this narrative scene.

AI+DePIN, which is currently the focus of the craze, is essentially using blockchain Tokenomics to empower AI. When the AI ​​foundation infra matures, AI will use AI Agents such as intention transaction paths and experience upgrades to further differentiate it. Blockchain DeFi empowerment. The narrative imagination space of AI+Web3 will be beyond imagination.

With narrative space, development will be carried out in various vertical directions, various infra projects will be relayed and combined to expand industries, attract VC investment, play with hair, develop applications, etc. The key is the prosperity of infra and market response. The expected implementation of applications is not proportional. Everyone knows that it is difficult to implement AI applications. Isn’t this an opportunity to push the infra market to the horizon?

Imagine if the mainstream narrative in the market can shift from DeFi’s infra to AI+web3’s infra, even if we don’t talk about practical applications, the big narrative framework of AI will have no problem traversing both bull and bear cycles.

2) ETH layer2

Although the modular one-click chain issuance and the benefits of the Cancun upgrade have reduced the development and maintenance costs of layer2, layer2 will be shouldered as a result. The burden of market expectations of the comprehensive chain has been eliminated.

Which layer2 technology is more unique and differentiated, which layer2 users and traffic are growing faster, which layer2 B-side Stack strategic resources have greater coverage, which layer2 ecological implementation is progressing faster, which one Whether layer 2 can have killer applications and so on will become indicators of layer 2's value evaluation system.

This means that the layer 2 track will become more and more complicated. More cutting-edge layer 2 projects such as Metis will frequently cause surprises and disrupt the situation. The four kings standing at the forefront of layer 2 will be under great pressure. Huge market expectations + slow ecological implementation will make it extremely difficult for these layer 2 projects to reach a new height.

To a certain extent, choosing layer2 is doomed to endure suffering and loneliness. Fortunately, the layer2 track is also malleable enough, with modular combination of new chains, Rollup As A Service, Stack strategy, The layer3 application chain, Paymaster subsidy war, Tokenomics catalyst, commercial output of Primitive components, etc. are all areas where efforts can be made.

I have always believed that the current layer 2 is essentially a "soft fork" of the layer 1 main network, standing on the shoulders of giants, and carrying out the Crypto-Native chain in a more flexible and autonomous way. Change, to a certain extent, also gives Ethereum a second life.

Thinking about it this way, do you have new expectations for layer2, which has always been less than expected? Without him, the battle for Ethereum layer 2 is difficult but necessary.

3) BTC layer2

If you look at the BTC ecosystem along the modular lines, BTC seems to be more suitable for promoting a series of BTC layer2 derivative ecosystems because it has a stronger consensus and at the same time The technical flaws are obvious, and the sense of technical boundaries and principles are not strong. It is unique to use the BTC main network as the settlement layer and then build a BTC derivatives market that can release huge liquidity.

However, the BTC ecology sprouted from the ordinal theory of Ordinals and broke out from the inscription asset issuance paradigm after BRC20. It currently revolves around a series of technical narratives such as RGB, Lightning Network, CKB replacement chain, and BTC-EVM chain. Currently exploring and landing.

The third wave of Inscription that many people are anxiously waiting for is likely to be driven by the upcoming BTC layer2 narrative, or BTC layer2 infra itself will take over the third wave. After all, the BTC ecosystem has been precipitated by asset issuance. With a large number of users and funds, only layer2 that can be directly implemented can continue the story.

To be pessimistic, we can think that the BTC layer 2 market is really new wine in old bottles, but from an optimistic point of view, the development of the Ethereum ecosystem requires too high a threshold for resources, manpower, and funds, and BTC layer 2 is completely new. It has opened up a new strategic high ground, and more developers can join the ranks of Builder at a relatively low threshold.

Besides, the consensus of BTC is even stronger, and the road to the sky of BTC layer 2 is wide and wide. Why not let developers go wild and take advantage of it?

4) Alt-layer1 high-performance chain

In the last bull market, everyone discussed who was the killer of Ethereum. In this round of Alt layer1 competition, the competition is about who can become the effective one of Ethereum. Replenish.

The expansion of layer 1 of EVM-Compatible is more about developers who want to use subtle differences to divert the Ethereum ecosystem. Everyone is just repeating what Ethereum has done. This round of high-concurrency transaction chains, parallel EVM chains, MOVE language underlying chains, etc. are more intended to take a path that Ethereum cannot take and attract more innovative developers to "start all over again".

My confidence in this high-performance layer1 chain comes from this. Including, the potential of Solana’s high-concurrency transactions in DePIN narrative, the reshaping of SUI Move language in DeFi security, the development of a series of parallel EVM chains such as Sei, Artela, Monad, etc.

In my opinion, these emerging chains have essentially transcended the technical limitations that existed when Ethereum launched the chain, and tried to use greater underlying innovation to activate a new round of Lego narrative. As for Solana It is not yet known whether DePIN and SUI can revitalize the new DeFI, but it is worth looking forward to.

5) Chain Abstraction

With the development of modular thinking, I don’t think it is just as simple as narrative, but has become the lowest level of blockchain thinking. The account abstraction that has been proposed for many years around the Ethereum EVM environment has become outdated in the environment of more complex UTXO chains and non-EVM multi-chains. As a result, another more abstract concept came onto the stage - "chain abstraction".

It should be said that chain abstraction is the culmination of the two swords of "account abstraction" + "modularization". It is really too important. The slogan of Mass Adoption has been shouted for so many years but has not been implemented. In the final analysis, the market is still in the stage of speculation on basic infra such as chains, wallets, exchanges, and DeFi. This has brought a new Onboard web3 user Extremely high threshold and challenge.

Chain abstraction is based on user experience. It uses intermediate chains or chain-in-chain services to lower the threshold, allowing a wider group of web2 people to enter web3 and have a smoother and smoother experience. , thereby changing the fundamentals of Crypto’s niche and existing market game.

Above

In addition, there are Restaking, Fully-onchain full-chain games, intent-centric transactions, Privacy transactions, etc., which are all more or less subdivided. At least it carries part of the mainstream narrative development direction.

I know that there will definitely be some people who regard these mainstream narratives as MEME, or even worse than MEME. Market FOMO is so impetuous to a certain extent that it will inevitably lead to confusion of values. Anyway, let’s just say this is a bloody article written for people who stick to the direction of value investing. I hope it can reflect the true voice of a large number of persistent Builders. That’s enough.

The long road to Xiongguan is really like iron, but now we are crossing it from the beginning. Stay firmly on the right path that conforms to your own knowledge and continue building!

Note: To be honest, I am really under pressure due to the current trend of MEME flying across the mainstream and the slumping market. I wrote this article in one go to give myself and everyone a boost of faith. If you find it useful, please forward it with one click and support. Thank you.