In the recent market rotation, we have seen the rise of many crypto unicorns, and these protocols have also become the center of the conversation in the crypto industry. At the same time, many users have received corresponding airdrop rewards for their early participation. As mentioned in an article before Cointelegraph Chinese, "Being an early active user of a protocol or blockchain is becoming more and more important." In addition to the possibility of airdrops, participating in early emerging protocols or blockchains is important to our perception The formation of the system is also of great benefit.
However, a person's energy is limited, and we cannot participate in the early stages of all products, so we can only choose some potential protocols or blockchains to participate in. Therefore, the methodology of "how to judge that a product has potential" has become the cornerstone of everything.
The "solution" to Ethereum's problems
Remember those "Ethereum killers" from before? When many developers launch alternatives to Ethereum, they will ambitiously claim that their products will be Ethereum killers-their blockchain can solve Ethereum's expensive and insufficient scalability solutions. However, the facts have proved that the status of Ethereum is irreplaceable, and its "decentralization" and "top DeFi products" are its solid moats.
Recognizing product positioning is very important, and this is also the successful experience of latecomers.
The success of Terra's main "LUNA-UST" system is also a good example. It is more like a traditional financial architecture system, but it provides users with high profit returns through some ace protocols - Anchor Protocol's stable currency Yield APY has been maintained at around 20%.
The narrative value of each public chain is different, but they are all doing the same thing - taking over the spillover traffic of Ethereum and launching fierce competition.
BSC is the first public chain to eat crabs. By supporting the EVM system, it accepted the spillover value of Ethereum in the early stage and gradually formed its own moat. Due to the high cost of Ethereum Gas, civilian DeFi players quickly migrated to BSC. This is also the value of the alternative solution. Although decentralization means open source, resistance to censorship, and permissionless access, decentralization will also show its side effects of "high threshold".
The Solana launched later is the ultimate of "Fast&Cheap" - if you have used Solana, you will find that its user experience is no different from that of centralized products. This is the narrative value of Solana and the architectural logic of the public chain. The frequent launch of hackathons has become a reflection of its background strength and an important reason for its rapid rise in ecology.
Mina is different from the narrative logic of the above-mentioned public chains. It focuses on the concept of "22KB lightweight blockchain". Mina pointed out that with the development of the public chain, the node data will become more and more bloated-this means that the threshold for becoming a node is getting higher and higher, and Mina uses recursive zero-knowledge proof technology to keep its size at 22KB. We can easily become a Mina node through any device, making it more decentralized. The small size also allows Mina to be easily embedded into any DApp. This novel narrative logic and the logical structure of the public chain will also become the value support of Mina.
Therefore, to sum up, when we explore whether a public chain is eligible to squeeze into the top ten TVL, we might as well look at the three aspects of "narrative value", "logical structure" and "background strength".
decentralized
In fact, we have already mentioned "decentralization" above, which is an important support for the value of Ethereum. Let's take the two largest airdrops ENS and dYdX recently to see "what is their value".
dYdX is a Layer 2-based DEX that supports perpetual contracts and leveraged transactions. Users can participate in Cryptocurrency transactions without permission and against censorship. ENS is a decentralized domain name system. We can decentralize the blockchain network through the combination of ENS and decentralized storage, decentralized web browsers, etc., without being affected by centralized entities. Their existence provides us with a "decentralized solution".
With the expansion of the influence of the encryption market around the world, various regulatory measures have been put on the agenda. The decentralized world does not require KYC features, allowing us to easily access every area of decentralized finance. dYdX and ENS are working on this.
The reason why we yearn for Web3.0 is because Web3.0 is an open source Internet world where everyone is equal and will not be exploited and plundered by centralized institutions. Decentralization is crucial in this process. And dYdX and ENS will also become one of the important territories of the future Web3.0 Internet world, which is where their value lies.
Low threshold cognition
Meme Token is a topic that can never be avoided in the development of the encryption market. Dogecoin and Shiba INU have become two behemoths in the encryption market.
In response to the rise of Meme Token, Wayne from Axia8 Ventures believes that for people in the non-encryption industry, they don’t understand smart contracts, so they only buy big cakes. But if you want to talk about Doge, it’s just an Internet meme, and Elon Musk is calling for orders, Tiktok people are calling for orders, and everyone is happily speculating. For a person, it is obviously easier to understand the value investment of ETH than to buy Doge for $100. Value is based on a person's perception. Intrinsic value is absolute, and extrinsic value is relative.
It can be considered that Meme Token is a product of community culture, and its origin determines that it does not require a cognitive threshold. A strong community system is fully capable of supporting the rise of encrypted unicorns. Since GameStop retail investors competed against institutions in the US stock market, this community atmosphere has become stronger, and the next encrypted unicorn representing community culture may be brewing in this atmosphere.
innovation
The rise of DeFi2.0 has benefited from early pioneers in this field, such as MakerDAO, Compound, Avae, Uniswap and other protocols, and Olympus DAO is their successor.
Olympus DAO did something that the protocols hadn't thought of or done before. In order to capture liquidity, protocols often provide LPs with protocol-native tokens as rewards, while Olympus DAO uses the concept of "Protocol Controlled Value" (Protocol Controlled Value) and its innovative binding mechanism to subvert the traditional DeFi liquidity model.
In the short term, liquidity mining rewards can quickly motivate LP miners to enter, and the protocol will achieve greater liquidity growth. However, in the long run, due to the selling pressure of miners and the reduction in production of native Tokens, this incentive is important for the continued growth of LP Not attractive enough. Therefore, Olympus DAO hopes to solve the unsustainable problem of liquidity mining through "protocol control value".
The bond model design of Olympus DAO is very simple, using the dynamic balance of the demand relationship in the market. Users only need to set the number of bonds they want to sell and the initial price to start. The bond price will be adjusted according to market demand. If no one buys, the price will drop until someone buys it. Once the bond is bought, the price goes up, and then when the market demand decreases due to the price increase, the bond price starts to fall again.
The advantage of "agreement control value" is that its liquidity is not provided by LPs, but by bond buyers. Bond sales funds will not flow to the Olympus team, but to the protocol's own liquidity. Olympus DAO earns income and liquidity while being its own market maker.
Although after the explosion of Olympus DAO, there have been many brainless imitation disks, some survived and some failed, but we still hope that developers can use the inspiration brought by the Olympus DAO model to further improve the DeFi field. capital efficiency. Perhaps, the next unicorn agreement will be born from this.
future
The protocol that represents the future is also gradually showing us its potential as the next generation of unicorn protocols. The recent Token Prices of Metaverse Protocol The Sandbox and Decentraland are confirming this.
However, it is worth noting that the metaverse concept has now become a recognized "bubble". This bubble is expanding rapidly, and bursting is an inevitable process, but this does not hinder the market's enthusiasm for the Metaverse. In the eyes of many people, the metaverse and outer space are the necessary development path for human beings, and even the metaverse is likely to become a part of our life.
Investing is an act of betting on the future, and a very "future" concept will become a favorite in the investment market. If an agreement represents the future, the market will remember to pour enthusiasm.
JinseFinance
TheBlock
Bitcoinist
Cointelegraph