In the past two years, everyone thought that the potential track would be popular but it has not yet become popular

Speaking of blockchain investment concepts, everyone can probably come up with a set of theories. If it’s not K-line or contract flow, then everyone is familiar with the four words " value investment ". What is the most important thing about value investment, or what is the way to maximize profits?

Of course, it is the operation method of " planning in advance before others understand it, and leaving the market gracefully when everyone understands it "!

But therein lies the problem - "planning ahead" is really too difficult.

In addition to being able to see it, you also have to be able to endure it . Otherwise, look at how many big guys have arranged BTC in advance, leading many people by several years. However, many people left the market sadly halfway, and many did make a lot of money, but when they look at the number of BTC they had N years ago and then look at the number now, according to the token standard, they have actually lost a lot.

This article will talk about several pitfalls that have occurred in the past few years, those tracks that many players with a keen sense of smell thought would be popular, but in the end they never became popular. Let's take a look at the dawn that may appear this year .

Decentralized Derivatives

Derivatives may be one of the tracks that many people were particularly optimistic about last year.

The reason is not difficult to understand. We have Uniswap, Curve, Pancakeswap and other Dex in the spot market. The proportion of Dex data relative to Cex is constantly rising . Many old players have basically completely got rid of their dependence on Cex and become Degen (fallen) who only survive on Dex.

Then we naturally deduce the next trend - decentralized derivatives .

Coupled with the launch of DYDX, the popularity of trading and mining, and the continuous surge in DYDX token price and market value, everything seems so good.

But it only seems so.

In the past few months, whether it is the leading DYDX, the second dragon Perp, or the third dragon Mcdex, the token prices have plummeted. On the contrary, only GMX stands out, rising steadily and falling slowly.

Most of my friends who do contract trading still trade in mainstream CEXs. To be frank, if the rewards of DYDX, the only competitive exchange, are cancelled, how much real trading volume do you think will be there?

The reasons are as follows:

• Although in a mature trading market, the trading volume of derivatives is much larger than that of spot trading, the market itself is still a nascent market and is still far from mature. Compared with spot trading players, the number of players who play derivatives is still small.

• The current decentralized derivatives cannot provide the experience provided by centralized derivatives , which may be the most fatal.

In other words, the current Dex derivatives are more like simply moving derivatives from Cex to the chain.

You should know that the rise of Uniswap is not because of its better trading experience than Cex, but because of its AMM, LP, liquidity mining, and no-threshold listing of FCrypto Native innovations that are completely absent on Cex. In the derivatives field, at least so far, there has not been such large-scale innovation relative to Cex.

In 2022, there are some promising directions, all of which are exclusive to DEX and unlikely to be realized on CEX :

• Opyn's Squeeze makes options into a power + perpetual form ;

• GMX is a model where liquidity is shared and LPs and all players are counterparties .

• Dopex is a derivative product that allows betting on the results of Curve War, exclusive to Dex;

• Projects that provide services for NFT liquidity and pricing mechanisms can be classified as "NFT derivatives". Some of the projects we have seen so far include NFTX+FloorDAO, Jpegd, Abacus, Fractional.art, etc.

The projects mentioned above are all very innovative. Due to limited space, I will not elaborate on them one by one. If you are interested, you can search for their information. I guarantee that you will not be disappointed.

privacy

Privacy is an issue that has been discussed for who knows how many years. It always makes people feel full of hope, but also always disappoints people.

This can even be traced back to the ancient Zcash, which opened at thousands of BTC. If you stretch the K-line of Zcash/BTC to the maximum, you can clearly see that this is an eternally downward curve.

Let’s take a look at the two MimbleWimble projects, Grin and Beam, that emerged in the past few years and are now in a state of disgrace. The new generation of privacy representatives is undoubtedly Torn based on ETH . If you open the K-line of Torn/ETH, it is basically the same disappointment.

So what’s wrong with privacy? Is it that we don’t need it? Or is there something else going on?

I feel there are two reasons:

• For the time being, at least for most users, it is really not necessary. If you don’t believe me, ask the people around you, how many of them have really used Torn or Zcash (not mining, but really using it for use), for the time being, I can’t think of anyone who really has to use these privacy tokens or private transactions except for a few whales or hackers.

• I remember Vitalik mentioned before that privacy should be a function, not a token or a chain. We should make it an option that users can turn on in future public chains or DeFi projects , rather than just issuing a token or building a chain for the sake of privacy. At least for now, there is no demand for such strong privacy among a large number of people.

However, having said that, the privacy track is still overcrowded . If you count them randomly, there are dozens of projects working on chains and Dapps. Some of the financing and valuations are still sky-high, with major capitals behind them. Maybe I don’t have enough knowledge, I really can’t imagine myself using these privacy tokens/chains/Dapps.

In my opinion, the most appropriate form of privacy should be Link or Graph.

It is a middleware that is imperceptible to users and that various chains or other project parties can choose to access or cooperate with.

By then, we may have an additional "privacy" option or switch in many applications or public chains. However, the difficulty of implementing this thing seems to be much higher than the oracle. A privacy middleware that is compatible with all chains does not seem to be something we can see in the next one or two years.

At present, there are two main technical directions for privacy:

• TEE, represented by Secret Network and Oasis;

• ZKP, represented by Torn and Aztec .

As for non-smart contract-based pure privacy tokens such as Monero's ring signature, Dash's coin mixing, and Grin's Mimblewimble, basically no one is interested in them.

Socialfi+DAO

These two are put together because they are essentially related to the relationship between people in the Web3 era, one is social and the other is cooperation.

These are also tracks that have been hyped up a lot in the past two years, but are in a mess.

One claimed to revolutionize Web2 social media, but now Twitter is the hottest in the circle ; the other claimed to revolutionize companies, but more and more VCs and companies have entered the web3 market , and few DAOs are really powerful. The two most famous ones are gold mining guilds like YGG and BitDAO, which is a shell of a centralized organization like Byebit . PeopleDao and CityDAO are really eye-catching because of their purchase of the constitution and land, but unfortunately one failed in the auction and temporarily became a meme coin , and the other seems to be struggling to expand in the real world. As for Aragon, which was once known as the first DAO coin, you can roughly guess what the DAO situation is by looking at its price performance in the past two years.

Socialfi and DAO have been praised but not implemented, and the most important reason may be that these two tracks are not profitable at present. You see, whether it is Defi or Gamefi, everyone's intention is to make money, but in your track, there is no oil.

But having said that, these two are still quite promising in 2022 to a certain extent.

On the Socialfi side, projects like Project Galaxy, Cyber ​​Connect, RSS3, etc. have begun to focus on depicting the social graph of user on-chain portraits and on-chain behaviors . Although it is still very simple at present, it feels that it has finally taken the right path of Crypto Native, rather than the previous imitation of "making a decentralized version of Twitter or WeChat" .

The Lens Protocol endorsed by AAVE feels even more closely connected with Defi, and even begins to lay the foundation for future on-chain unsecured credit loans .

DAO has actually made a lot of progress in 2021. At present, there are protocol DAOs, service DAOs, collection DAOs, investment DAOs, gift DAOs, media DAOs, and game union DAOs in terms of classification. Each DAO category has relatively good leading players. Whether it makes money or not is another matter. The number and number of DAOs are indeed steadily increasing. This is a good start! How does the saying go? You have to eat one bite at a time and walk one step at a time. To revolutionize Web2 and the corporate system, you have to be prepared for a long-term battle and plan for ten years.