Where will the next bull market engine roar?

In addition to cycles, a bull market also requires hot spots, and some hot spots can form a wealth effect without being afraid of cycles.

I call this hot spot the bull market engine. What will be the next bull market engine?

To understand the present, let’s first sort out the historical context:

In 2017 , the ICO method of smart contracts (in simple terms, it is to automatically exchange new asset tokens into ETH smart contracts by depositing funds into ETH addresses) triggered a big bull market - a super bull market, with projects that increased by 100 times or 1,000 times. This bull market was strongly guided by the crypto narrative and claimed to Decentralize everything, igniting infinite expectations. Unfortunately, the result was a mess, with only the infrastructure such as TRON, ATOM and other public chains and extremely rare applications such as Bancor to prove that the bull market had been here.

In 2018 , after EOS went online, it set off a wave of DAPP mining with high TPS (mainly gambling projects, through continuous betting and mining platform coins, although the bet principal was lost, the mined platform coins could cover the loss and can be arbitrage more stably, and a small number of platform coins also rose gratifyingly) - a small market but with a good wealth-making effect, most of the active players at that time became senior players of this wave of DEFI. Due to the limitations of EOS itself, the user expansion ceiling could not be broken, and this wave of DAPP failed to spread like wildfire. Instead, it made everyone slowly despair of blockchain applications. The Ethereum tractor at that time could not drive these applications, and then it was a big bear market. In one word: miserable~

In addition, the exploration of blockchain games based on the EOS network has also been a hot topic this year. Yes, the blockchain games at that time are the current Gamefi. If you have played a blockchain game called "Yuzu Three Kingdoms", you will know that the gameplay of this game is actually very similar to AXIE. It cannot be said to be similar, but Axie should have borrowed the gameplay of EOS Three Kingdoms. This blockchain game has a strong vitality and users are still very active until 2019. Finally, but the most important point should be emphasized: this blockchain game was independently developed by Chinese people! ! ! Although the project party has made money, it still has to lament that it was born at the wrong time~

In 2018 , there was a hot topic in the second half of the year called transaction mining, which was originally created by Fcoin. The principle is also simple, very similar to DAPP mining on EOS. High-frequency transactions are used to mine platform coins, and the platform coins are sold to cover the transaction loss fees, and stable arbitrage is achieved. How powerful was this thing at the time? In less than half a month, the total transaction volume of the Fcoin platform exceeded the total transaction volume of the other six head exchanges. Punching Binance and kicking Huobi, OK sat in the corner and dared not say a word~ But in the end, Fcoin was insolvent and collapsed in 2019, leaving a sigh. It can be said that: taking drugs is fun for a while, taking drugs all the time is fun, and taking drugs until the end is the crematorium~

In 2018, both DAPP mining and transaction mining echoed the popular DEFI mining in 2020 and the most primitive BTC mining. DEFI mining completely inherited the essence of DAPP mining and transaction mining. In the limited life of the crypto market, it has been through bull and bear markets and has been enduring. In addition to the big cake, there is actually "mining", the sexiest word in the crypto circle. From miner to famer, it can create something out of nothing like magic, secretly, out of imagination, and out of thin air...

In 2019 , the market was very bearish. Exchanges actively saved themselves and promoted IEO. Project parties directly linked to exchanges, without middlemen to make a profit from the price difference. They did not need to find investment institutions to raise funds. They raised funds directly from retail investors on exchanges. After that, they quickly opened the market for trading. The standard opening price was 5 times or 10 times. In addition, some coins could continue to rise, creating a wealth effect. The leeks stared at the top exchanges to rush for new shares. This gameplay greatly promoted the flow of funds in the market and gave many exchanges a life in the bear market. At the beginning, it was easy to pull the market because there were few circulating shares, but the follow-up was weak. Most projects only had boring market-making skills and lacked the mentality of drawing pie narratives. The price of the currency still had to fall back later. After that, it was quickly played out. Many exchanges even started their own projects. In the later stage of IEO, some projects were too lazy to even make markets, and the leeks who were still rushing took over the market directly. Some exchanges even sold a lot of air and maliciously shorted certain projects, and eventually IEO withered, and the entire crypto community had infinite disgust with centralized exchanges; in 20 years, everyone is more familiar with it, DEX has risen, and small projects can be listed and traded at low cost without CEX. At the same time, lending, gun pools, and various liquidity mining have exploded, and various new things have continued to emerge. The tyrannical narrative of DEFI has swept the crypto community in constant doubt, opening up a new world, and the thunder and fire of heaven and earth have been triggered, starting a super bull market;

21 years , the most lively

Multi-chain universe ; DEFI continues to evolve and build blocks, expanding from the ETH ecosystem to the multi-chain universe. The battle between Ethereum killer, EVM & layer2 is so lively. The grand blueprint of the multi-chain universe is very exciting, and the market value of public chain coins continues to reach new highs!

The rise of Gamefi is equivalent to the upgrade of DEFI, which greatly extends the project cycle. Unlike DEFI's simple mortgage liquidity mining, Gamefi not only requires players to inject funds, but also spend a lot of time to make gold. The derived professional gold-making guilds have also emerged, attracting a lot of traffic outside the circle and rekindling the dream of the crypto circle. Even now, everyone has understood that Gamefi cannot escape the ponzi mode, and the narrative banner of Gamefi is still attracting people inside and outside the circle to rush in~

NFTS rises , the summer of 21 is called NFT Summer, PFP small pictures have detonated the NFT market, which is a more vital crypto asset. Unlike the previous Tokeon, most of which are for speculation and arbitrage, NFT also has a certain collection and consumption nature. It softens traditional art and current encryption technology, making encrypted assets closer to entities, and making the implementation of encryption technology a big step forward. At the same time, it has attracted a large number of new forces to enter the market, many celebrities, stars bring goods, and several native encryption luxury IPs such as BAYC and Punks are easier for non-circle players to accept than BTC.

Gmefi and NFT are very popular and intertwined with each other. With the popularity of the concept of the metaverse, NFT is regarded as an important production factor of the future metaverse. Gamefi makes people see the possibility of making money in the future metaverse. The interweaving rendering of NFT, Gamefi and the metaverse is depicting a wonderful future. Coupled with the hot discussion of the concept of Web3, the leeks and the money of traditional finance are very excited, and funds are crazy poured into the primary market. Unfortunately, the metaverse and Web3 have not been able to show more practical support like DEFI. It can only be attributed to the fact that hope is beautiful, but the road is tortuous~

meme is crazy ; at the same time, meme coins have performed a fanatical movement in 2021. Many old investors expressed that they could not understand but were greatly shocked. Why did the crypto market, which is constantly approaching the landing, finally return to speculating in the air and the most mindless shouting and cutting each other? Because there is DEX, we are not afraid of CEX making trouble? Because popularity and traffic are the current essence of the crypto market? Big V shouting + speculative funds + market fanatical popularity, meme has turned the bull market in 2021 into a dog market. Now reviewing it again, perhaps the extremely boiling funds in the market need such an outlet. Playing DEFI and Gamefi is too troublesome. Just speculate and just rush. Only CX is the most down-to-earth. In the frenzy, the market ushered in the peak of this bull market, and then it declined from prosperity to decline~ The waves of DEFI2.0 were stubborn for a while, but were eventually buried in the tide of the bear market~

For 22 years, the bear market continued, the world situation was turbulent, the bear market turned into a monkey market, jumping up and down, but everyone was still not satisfied with the feast of the bull market, and the leeks began to find narratives to hype.

The DAO narrative was hyped up, and Assange severely cut off a wave of people who had participated in the FOM, which sounded the death knell for the DAO.

Then Stepn’s X2E made everyone excited, but the latecomers couldn’t catch up, and everyone saw through the ponzi model.

Then there is DID , domain name speculation, which is the favorite of Chinese people, and then say something~

Socialfi is constantly agitated but nothing real can be seen; NFTs have also cooled down; in the face of the big cycle, without solid practical support, it is ultimately difficult to reverse the decline by relying solely on narratives~ This year, Luna and the three arrows have successively exploded, making the already bleak situation even worse~

Looking back to the past and present, although the hot spots are different each time, there are still some commonalities:

Every hotspot promotes the flow of assets.

Every hot spot must be accompanied by new assets.

Every hot narrative is important.

The ICO in 2017 and the NFTS in 2021 were driven by strong narratives, hyping up future expectations, and the spreads generated by the excess returns from issuing new assets leveraged the flow of assets;

The DAPP mining and transaction mining in 2018, as well as IEO, are driven by mechanism innovation, which creates wealth and leverages asset flows;

DEFI in 2020 is also a mechanism innovation, but later on, a grand narrative was derived based on the mechanism innovation, which is beyond the reach of DAPP mining and transaction mining. The wonderful DEFI grand narrative coupled with visible support - growing TVL, expanding multi-chain universe, and surging users, makes this wave of bull market in 2020-21 crazy and lasting! Gamefi and X2E are both enhanced versions of this model~

The narratives of the 2017 bull market and the 2020-21 bull market are equally grand, but the difference is that the narrative of the latter has more practical support. This wave of bull market is confirmed by various product data, making this wave of bull market crazy and lasting~

To further summarize, the bull market engine needs to meet three elements: accelerated asset flow, new assets, and narrative .

So the question is, what will be the next hot spot?

The first principle of Web2 is traffic

I think the first principle of Web3 should be digital assets

The hot spots of the future will definitely be new ways of playing and narrative innovations around digital assets!

If capital is compared to water, these new ways of playing are like hydroelectric power stations, sluice gates, and water pumps that guide capital, chains are like infrastructure such as rivers and streams that carry capital, and new projects are like farmland that irrigates water and farms new assets. The cross-chain bridge is like the Beijing-Hangzhou Grand Canal, connecting the multi-chain universe and further promoting capital circulation.

It is too difficult to make an accurate prediction, but a fuzzy prediction can still give us a rough idea of ​​the direction:

NFT , a new asset, is likely to generate new narratives and new ways of playing. It is almost inevitable that this general direction will take off. The new form of NFT (different from PFP), new trading models, new NFTfi, etc. are all worth spending a lot of energy to explore and innovate. The consensus in this direction is also relatively common, and many funds and senior players are working hard.

Another direction I think is to explore the DEFi potential of BTC . After communicating with many people in this direction, only a few people agree. Less than 2% of BTC's huge capital volume has participated in DEFI (refer to my previous article https://mirror.xyz/dunyi.eth/SeJYm34yVvhgUQM9McWMzfa1v5B-g7PXkqoZ_wESJ94) Due to the imperfect infrastructure of BTC, the demand for arbitrage of BTC entering DEFI is limited, but it is precisely because of this that there is room for development~ Like DID, data analysis, Socialfi, these are tools to assist asset speculation, and network effects are needed to generate a large consensus. There will be several heads, but the ceiling is limited and it is difficult to achieve great success. Only those who can grow against the trend in a bear market can form a real network effect. I have not seen such a product. If you find it, can you send me a private message~

I sincerely suggest that many domestic builders should not put too much energy on DID and Socialfi. It is difficult for us to compete with foreign countries at the infrastructure and public chain levels, but there is still hope at the application layer. We have the genes of the application layer. As long as the direction is not wrong, spend more energy on the two directions of NFT and BTC defi! Of course, the future hot spots will not be limited to these two directions, but these two directions seem to me to be more certain. This is just one opinion and we welcome different opinions to discuss and verify. I hope that like-minded people can come together to do something fun. We are happy to provide early ideas, funds and other support within our capacity~ Written at the time of the 119 bloodbath in 2022, FTX's thunderbolt caught quite a few people off guard. The fundamentals of the entire industry are changing. The money from traditional capital will be sharply reduced, and the primary market will usher in a real winter, but this is also the time to test the real Builder. The spirit of blockchain will never die. May we all have a bright future~