Regan Bozman, co-founder of encryption venture capital Lattice, believes that projects that will guide the development of the encryption field in the future will mostly be driven by applications for general users rather than infrastructure, and the market will transform into a user-centered development strategy.
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Consumer products are bigger than infrastructure protocols
Bozman believes that the biggest winners in this cycle will be applications that vertically integrate and build on-chain business models, that is, products such as Blast, Galxe, Zora, etc. that target general users, rather than the mainstream products of the past. Infrastructure projects such as public chains or general-purpose Rollups.
As Web3 infrastructure becomes increasingly commoditized and mature, sales and distribution become critical.
Rather than technology, brand and attention are the key points
Due to the following three points, the future development focus of the encryption field will gradually shift from technology-oriented infrastructure projects to consumer-centric products:
The technology stack has matured: for example, using OP Stack or ZK Stack, most developers can easily launch their own blockchain.
First-line consumer applications have reached a certain scale: such as Uniswap, Aave, and Blur.
Infrastructure has emerged as a red ocean market: the market may lack interest in fifth data availability layer projects, and capital is looking for new opportunities.
In the future, consumer applications will dominate the growth of the encryption industry. These applications will be commercialized through existing technology stacks and vertically integrated to attract the market to join their ecosystem by capturing market attention, distribution strategies, and brand value.
Blur and Manta set precedent
For example, after establishing a successful NFT market, the NFT exchange Blur team deployed its own Layer 2 to support new products such as NFT perpetual contract trading, thus creating the Blast Network.
(Detailed explanation of Blur’s income-based L2 network Blast: on-chain native interest rate, NFT perpetual contract, etc.)
Blast's biggest innovation isn't technical. It integrated Lido and Maker to increase revenue, which is a financial innovation; on the other hand, it also successfully used Blur's brand advantages to attract traffic, which is an industry marketing innovation. These advantages are different innovation directions from the previous cycle of Layer 2 (such as Arbitrum or zkSync).
Eventually Blast managed to become the fourth largest Rollups.
Manta Network also followed a similar route, by allowing users to pledge ETH and USDC to obtain Stone to increase revenue efficiency, and combined with the market-attracting marketing campaign New Paradigm, it successfully promoted its Layer 2 to the seventh major project.
Layer2 ranked by TVL (source)
How will the privacy encryption Layer2 project Manta Pacific break through the competition of zk rollups as a late entrant?
Technology is not the main innovation in the next market cycle, but branding and sales.
More other application-oriented projects begin to build network infrastructure
More cases include Aave, Frax, Zora, CyberConnect, Swell, Galxe, DODO, etc., all of which are planning or have launched their own Rollups infrastructure to expand their ecosystem and reach the market.
(Aave’s latest roadmap Aave 2030: V4, Aave Network, liquidity integration)
Number of monthly active addresses on the Zora network. Centralized exchanges have already begun building Layer 2.
On the other hand, centralized exchanges actually started this model earlier. Kraken, Binance, Coinbase, and OKX have all built or are building their own Rollups to expand their ecological influence based on existing user groups.
(Kraken will launch its own zk Layer2 to expand into the Web3 ecosystem?)
The crypto market will be driven by consumers in the future
Now that the infrastructure narrative is coming to an end, market capital is still looking for new investment targets. Perhaps the application-driven ecosystem meets its needs. On the other hand, as front-line encryption applications reach a certain level of scale.
Therefore, it is expected that we will see more projects in the future, launching their own Layer 2 networks or public chains to attract market participation, which will be more powerful than technology-driven infrastructure.
This article Is technology not important anymore? In the future, user-oriented products will be more important than infrastructure. First appeared on Chain News ABMedia.
