Decoding possible hype hotspots after DEFI

From June to August, the hype of DEFI has lasted for nearly two months. This is a period of staged outbreak. However, as we all know, DEFI projects have a characteristic, that is, they release products first and then hype. This is completely different from the previous 1CO and IEO, which first release coins for hype and then release products.

Most of the hype about DEFI is about existing projects that existed before this period of time, or some projects that originally planned to follow the DEFI model but temporarily changed their direction. The main reason is that code writing and auditing are actually time-consuming, so there will be a lack of new and interesting projects.

In fact, there are already some signs. Most of the newly launched DEFI projects are projects with close or similar functions, and do not actually play a big role in promoting the industry. Therefore, it can be predicted that the DEFI sector may face a short cooling-off period in the later stage to facilitate the continuous efforts of various project parties after innovation. There is also a point of view in the previous article that DEFI may become a normal development in the future rather than a short-lived craze. This is also a gradual improvement way of decentralized finance.

So what will be the direction of the hype after DEFI? From the perspective of most media and investors, it may develop into the following aspects:

1. Cross-chain field

Cross-chain has attracted the attention of the market since last year. Among them, the more well-known one is Cosmos. Of course, many exchanges later began to develop their own public chains based on CosmosSDK, such as Binance Chain and OK Chain. In addition, there are IRIS and Kava, etc. Its ecology is still quite rich.

In fact, the cross-chain theme has also benefited from the DEFI trend to a certain extent during this period. For example, the interaction between Kava and Binance public chain has attracted a lot of attention. Cross-chain staking of BNB or stablecoin USDX has also attracted a lot of participation, while Cosmos, IRIS, etc. have all seen large increases.

Cosmos is not the only cross-chain project in the market. Cross-chain technology has changed from last year’s “high-end” to this year’s practical applications. For example, the previously introduced BTC cross-chain to the Ethereum platform became WBTC. Decentralized exchanges also often perform cross-chain operations of some tokens, such as the Binance public chain. In addition, for other public chains, such as some domestic projects, cross-chain operations are also involved.

Of course, the Polkadot parachain, which has attracted much attention recently, was actually known as the "cross-chain duo" together with Cosmos last year.

The role of cross-chain in the market is actually quite large. DEFI is currently developing rapidly and also needs to be integrated with cross-chain technology. For example, the simplest BTC financial management and lending actually requires transferring Bitcoin to Ethereum, and then going to the DEFI platform for financial management or lending. Similarly, digital currencies on other public chains actually have cross-chain needs.

Cross-chain can also solve the island effect faced by blockchain. Simply put, the data between various public chains are difficult to communicate with each other, thus forming data islands. This is very inefficient. However, cross-chain technology can effectively break through this barrier and allow different blockchains to exchange data and asset information, and finally form a large digital asset exchange network, which has very high application value.

2. NFT collectibles

Since the birth of CryptoKitties in 2017, NFT collectibles have basically gone through three years. During this period, some NFT collectibles have appeared one after another. Of course, they were called ERC721 tokens before, and some have tended to be chain-gamed and integrated with blockchain games.

After several years of development, NFT collectibles currently mainly cover several categories, including game characters, art paintings, virtual cards, game props, virtual medals, ENS domain names, etc. Among them, art paintings, as a relatively new direction, have attracted the attention of some traditional art lovers.

Game collectibles, such as props, cards and game characters, have gradually formed their own dex trading market, and the transaction volume is steadily increasing.

Starting this year, commemorative medals have gradually become popular. Some teams also specially issue commemorative medals to attract users, such as the Maizi Wallet Medal, MyKey Medal, Binance Anniversary Medal, etc., and have formed an over-the-counter trading trend. Some have been hyped up to a value of more than 100 yuan.

There are actually a lot of teams in the blockchain market at present. After years of polishing, many teams have a certain "history". Teams that have been working in the blockchain industry in the early days may have the need to issue NFT commemorative medals in the future in order to consolidate and give back to their early users. Therefore, based on this aspect, NFT commemorative medals may become a hot topic in the future.

The ENS domain name is an early project on Ethereum. After a series of rule changes by the team, the current ENS domain name has a certain usage fee, and is also included in the NFT and can be transferred freely between users.

Of course, it is worth noting that NFT assets currently still have certain shortcomings in terms of speculation. The pricing of assets, the development of related exchanges, the value support of issuance, etc. may make NFT difficult to speculate, which is an important factor for NFT to enter the ranks of unpopular collectibles.

3. IPFS and decentralized storage Filecoin

As a new data transmission protocol, IPFS actually has important significance in the construction of the future Internet. Many people even believe that IPFS is a very important link in web3.0.

Of course, as a value application of IPFS, FILCOIN has always attracted the attention of most people, and some exchanges have also started to speculate on FILECOIN's futures products early on.

Not only that, some scam teams also used the fame of IPFS to promote their mining machines to the masses who were unaware of the truth. As a result, the coins were not even launched yet, but there were a lot of mining machines, which eventually caused many people to lose their fortunes.

Of course, these negative news have actually aroused the market's vigilance to a certain extent. In the current filecoin test mining process, many teams have also appeared to sell filecoin cloud computing products. In fact, this has made many leeks reluctant to pay for it to a certain extent (some of the early scams under the guise of mining have consumed the public's trust to a certain extent).

But no matter what, FILECOIN, as a very valuable project, is still favored by many teams in the industry. Many teams currently selling cloud computing power are also well-known in the industry, which to a certain extent endorses it.

In addition, there is an interesting phenomenon in the industry, that is, the projects that are highly favored by ordinary investors (leeks) in the early stage are often in a mess, while the projects that are criticized and not favored by the public are able to obtain financial support and rise to the point of doubting life. For example, the views on EOS blockchain 3.0 and DEFI code vulnerabilities have been confirmed in practice.

But no matter what, we still need to maintain a certain rationality regarding the views on FILCOIN, because the majority of teams participating in filecoin mining are still in China, which is somewhat similar to the initial hype of EOS.

4. DAO and on-chain governance

DAO was actually born quite early. In the early days of Ethereum’s development, the DAO suffered huge losses due to a code vulnerability, which ultimately dealt a heavy blow to the DAO ecosystem. However, this did not prevent the DAO idea from continuing to be popular.

The idea of ​​DAO is still of great significance to blockchain. The later smart contracts and DAPP are actually a process of decentralization. Of course, the current DEFI is actually more broadly speaking, and many DEFI projects can also be regarded as a type of DAO.

After attracting a wave of attention last year, on-chain governance has gradually gained recognition from many project parties. The essence of decentralized on-chain governance is actually a fusion process between the development team and the community. The future development direction of the project is generally determined by voting, rather than the team working behind closed doors and ignoring market demand. Therefore, on-chain governance and voting as a means may become an essential part of blockchain projects in the future.

5. Ethereum 2.0

Ethereum 2.0 has been attracting a lot of attention since the beginning of this year. As the next leader in blockchain technology and the target of competition for many public chain projects, Ethereum is now leading the trend of blockchain development. Therefore, the 2.0 industry will develop rapidly in the next 5-10 years.

At the same time, we need to pay attention to the integration of external industries such as artificial intelligence, Internet of Things, and 5G. In fact, there are many opportunities for industrial integration with high-speed TPS transactions. In other words, in the next few years, Ethereum may bring about great industrial changes.

From this perspective, Ethereum 2.0 will become a new landmark project, which has made many people look forward to it. Of course, the launch of the 2.0 test network some time ago also caused a wave of increases in the price of Ethereum, which also shows the market's expectations for 2.0.

However, we need to note that Ethereum 2.0 is a relatively long-term development hotspot, not a short-term hype of a few months or half a year. Therefore, if a layout is required here, the timeline should also be extended, rather than rushing to participate in the short term.

In addition, Ethereum 2.0 is currently too ambitious, so there are code loopholes or constant delays due to audits, etc. In terms of speculation, it will continue to wear out investors' patience, which is not good. Therefore, in the short term, there may be such a risk that once an unexpected event occurs in the short term, it is very likely that the price of the currency will fall, so this needs attention.