I have a feeling that something big is going to happen in the cryptocurrency industry. I don’t know what exactly it will be, but it should be some very positive news.
Interest rate cuts begin, Ethereum spot ETF approved, Bitcoin spot ETF capital inflow increases, Stripe launches stablecoin payment...
Like an army positioning itself before a decisive battle, major cryptocurrency firms and TradFi are preparing for the coming bull run.
Meanwhile, the internal machinery of cryptocurrencies has not stopped turning. Despite the dips, new narratives and trends will continue to emerge, and the market will continue to change with them. Just as MakerDAO was launched before the term "DeFi" was coined, new trends are emerging in the market, but they are too small to form a narrative yet.
Here are 7 emerging trends that could have a significant impact on the market.
1. Repackaging
Old coins are boring, but new coins are always refreshing. What if the project could change the brand, change the token code, and start over with a new chart?
This is exactly what Fantom is doing with the Sonic upgrade. Sonic is a brand new L1 that crosses to Ethereum via a native L2. Sonic features a new Sonic Foundation, Sonic Labs, and a new visual identity. More importantly, the new S token is compatible with FTM and can be redeemed 1:1.
This is a smart move by Fantom, which will generate more market hype than simply calling it "Fantom 2.0" and allow it to put Multichain's past behind it and start anew.
Similarly, Connext is changing its name to Everclear.
Rebranding is nothing new in the cryptocurrency space, but the emerging trend is to repackage major upgrades as new products, which can send a stronger signal to the market than a simple v2 or v3 upgrade. After all, people won’t be too excited about another “V4” upgrade.
The switch from Connext to Everclear is not just a rebranding, but a major technological advancement. Connext has transformed into a clearing layer, built in the form of Arbitrum Orbit Rollup, connecting other chains, aiming to achieve a modular cryptocurrency future. After the announcement, the price of NEXT tokens rose by about 38%, and Fantom's FTM transactions were hot and the number of mentions increased. In the future, more protocols will rebrand or merge, such as IOTA creating RWA's L2, F ET, etc. to complete the merger.
Crypto regulation is a big problem, and the US SEC is targeting major players. Things have changed. Trump's support forced the Democratic Party to change its strategy, Biden accepted cryptocurrency donations, and the SEC ended the lawsuit against Consensys. The short-term prospects of the cryptocurrency industry depend on the election. If Gensler steps down or his power is checked, cryptocurrency assets may rebound sharply and a bull market will emerge; if he continues to be in power, the market may be depressed for a long time. Clear regulation will bring the biggest bull market and change the digital asset market: shift from narrative to product-market fit, clarify the success measurement criteria, improve the financing environment, and prosper the M&A market.
Leverage exists in new ways, such as ETH ena's Delta neutral strategy, re-staking, and Bitcoin spot ETF buyers. Bitcoin spot ETFs have seen net inflows for 19 consecutive days, accounting for 5.2% of the total Bitcoin in circulation, but Bitcoin has not soared because hedge funds are shorting through CME futures, and may adopt a strategy of buying and shorting spot ETFs.
This strategy is the same as ETH ena. But as Kamikaz ETH points out, "What if massive leverage with low funding is leverage for this cycle and already exists?" What happens when funding turns negative (investors are no longer bullish and close long positions)? When these positions need to be closed, will Ethena (led by retail investors) and spot BTC + CME futures shorts (led by institutions) cause a big crash?
That’s scary. But perhaps the lighter answer is that institutions are arbitrage trading Bitcoin spot and futures.
Regardless, we need to keep a close eye on these new developments with Bitcoin spot ETFs, as “risk-free” arbitrage often ends up being “riskier” than initially imagined.
4. Gamification of Points
The protocol can use points to attract the initial user group to increase adoption and valuation. Points addiction is serious, and point gamification can add elements. For example, Sanctum launched the Wonderland game, where users collect pets to earn experience points to upgrade their levels and form a community team to complete tasks. It is not much different from other point projects, but the community likes it. It only took one month to complete the first season of promotional activities.
I hope to see innovation from 0 to 1 in the airdrop mechanism. We are tired of points. I hope more projects will try to gamify points and bring some fun to airdrops.
5. Resist the issuance of low circulation and high FDV
Except for venture capitalists, teams and airdrop hunters, almost everyone hates the token issuance mechanism with low circulation and high FDV.
Binance, which used to buy hot new tokens, recently adjusted its listing strategy due to user resistance to the issuance of low-circulation, high-FDV tokens. It decided to list tokens with moderate valuations and prioritize community rewards over internal distribution.
We still have some work to do on this, but at least we’ve taken a step in the right direction.
Venture capital firms are also to blame for the low circulation and high FDV token issuance mechanism. Venture capital was once seen as a positive signal, but the cryptocurrency community now sees it as a value extraction. The concern is that venture capital firms aim to profit by selling large allocations of tokens that they obtained at minimal cost.
In addition, the project team must also take action to avoid a situation where the token continues to fall in value.
Projects can and should have more attempts. For example, Ekubo on Starknet distributed tokens equally to users, teams, and DAOs within two months. Nostra (also on Starknet) launched NSTR with 100% FDV, of which 25% was allocated through airdrops and 12% was sold in liquidity bootstrap pool activities. In addition, there are experiments with 100% airdrops by FriendTech, and the community minting Bitcoin Runes for free (although runes also allow pre-mining), etc.
The impact of these token issuance methods is still uncertain, but keep an eye on new token issuance models. A new successful issuance method may become a new primitive in this bull market.
6. The McKinsey of DeFi
The emergence of DeFi helps achieve self-sovereignty, where people can own and effectively use their assets without being restricted by national borders. However, as we hope to squeeze every penny of profit, DeFi strategies are becoming more and more complex. Therefore, consulting companies like TradFi have emerged to help protocols deal with security, governance, and optimization issues. For example, Gauntlet can charge clients millions of dollars in fees each year.
More importantly, DeFi protocols are also being adjusted to allow the "McKinsey" in DeFi to manage user assets and externalize risk management. For example, Morpho Blue's permissionless lending allows the "McKinsey" in DeFi to create markets with any assets and risk parameters without relying on governance. Among them, the most popular treasuries are managed by Gauntlet, Steakhouse, RE7 Labs, etc.
Similarly, Mellow protocol launched LRT, which is managed by “curators”, giving “depositors more flexibility in how they want their risk exposure while benefiting from the liquidity of the staked assets.”
I believe that as DeFi becomes more complex, this trend will become more and more obvious, further pushing "DeFi" to "on-chain finance", transferring power from token holders to professional companies. As for whether this will make tokens more popular, I don't know yet.
7. Web2-like DeFi entry barriers
While Friend Tech may have had its issues, it successfully popularized Privy, enabling people to create and manage wallets using Web2 accounts.
To be honest, during the NFT craze, I would rather help my friends buy NFTs directly on OpenSea than teach them how to use MetaMask, because it is really troublesome. Now, with Privy, we can create a wallet on OpenSea with an email and 2FA code, and the whole process only takes one minute.
And this trend isn’t limited to Privy. Infinex, developed by Synthetix, allows wallets to be created using Passkeys, so users only need to use a password manager for their wallets. Coinbase has also launched Smart Wallet, which can pay gas fees on behalf of users, supports batch transactions, and allows wallets to be created using Web2 tools.
Complex user onboarding is no longer an excuse for crypto’s lack of adoption. What we need are unique consumer apps.
Again, at this stage, we are planning some good currencies
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I won't let my fans miss out on this bull market! This is the truth
