10K Quarterly Report: How to Find Definition in the Uncertainty Crypto Industry

Source: 10K Ventures

Starting from 2025, since Trump/Melania/Libra issued coins and drained market liquidity, the blockchain industry has continued to face the challenges of overall market sentiment and liquidity tightening, but we believe that the quantitative tightening of the market has gradually entered the bottoming stage.The potential quantitative easing in the second half of this year may bring stronger liquidity to the market. We are particularly concerned about some high-quality altcoin projects with real application scenarios and revenue. We believe that these projects will be the first to highlight their value in the process of market recovery, and it is worth continuing to maintain patience and confidence.Meanwhile, 10K FundⅠ 1The fundraising of US$0 million mixed strategy fund has been successfully completed and will be officially launched soon.

The transaction volume of the entire network in March was about 1.5T, which is half of the transaction volume in December.The trading volume was almost approaching the bad market in the middle of last year, which shows that the market sentiment has begun to be pessimistic and has a deep bearish situation.The market rise brought about by this Trump trading atmosphere lasted only 3 months.In the future, the increase in altcoins and mainstream currencies will still depend on interest rate cuts and quantitative easing.

Now we have summarized the industries that still have highly healthy cash flow in the blockchain industry:

Exchange

We won’t elaborate on centralized exchanges, and everyone knows that this is a money-making industry.Although the competitive landscape of spot exchanges is basically established, the market for contract exchanges still has opportunities.This is because, as a “private domain” industry, a considerable number of traders follow KOLs. The KOL market is highly fragmented, and each community leader has his own private domain traffic.This leads to the fact that after a small perp cex/dex handles many KOLs in a small country, the exchange is still highly profitable, but the ceiling is relatively low and the height is long-tail.

During the changes in the first quarter of this year, Binance and Bitget’s market share have significantly improved, while the market share of Bybit and Upbit has declined.This is also highly related to the business of the company – Binance is frequent in the first quarter. In addition to frequent Launchpool, Binance Alpha+Pancake IDO+Cex can buy dex tokens through funds, causing Binance’s market share to return from the lowest point of 42% to 50%; the wealth effect of BG’s launchpool+launchx still exists.

Due to the 1.5 billion yuan of Bybit was hacked by North Korean hackers this year and the suspected corruption of Upbit in South Korea and the suspension of currency listing, Bybit and Upbit’s market share declined significantly in Q1 – Bybit’s market share fell to 7%, less than half of last year’s high; Upbit’s market share was 7.36%, with a market share dropping by about 30%.

Broker

The brokerage here is more similar to trading tools such as Moonshot and Gmgn.They combine token recommendation + trading bot, and do not make maker liquidity, only taker liquidity.The company’s business model is more similar to the commission drawing model of brokers. Users are usually meme traders. They don’t care about the transaction fee of 1%, but they care more about the transaction speed and whether they can capture tokens with wealth effects earlier.Benefiting from the Trump coin issuance boom, the first software for many new users to enter the market is no longer Binance or Bybit, but Moonshot, because Moonshot has better meme trading and fiat currency deposit and withdrawal functions.Users can transfer silky US dollars to U, then gas free to trade, and then silky OTC withdrawal, which has a high sense of experience and Futu.

Asset Management

We will not elaborate on centralized asset management.But it is worth mentioning that Amber listed on Nasdaq through SPEC, with a current market value of US$1.1 billion, which is still a major adjustment compared to the last round of US$3 billion in early 2022; Matrixport currently has AUM reaching 10 billion, becoming the largest asset management company in Asia.

Stable Coin

Upstream and downstream payment + deposit and withdrawal

Stablecoins are nothing more than the hottest topics in 24-25 years.A set of data is shown – the market size of fiat-collateralized stablecoin in 25 years has reached US$230 billion, an increase of 15% in the first quarter of this year.Even in the environment of poor market conditions, stablecoin companies still maintain high growth.

In the traditional financial industry, the ceiling of payment is much larger than that of exchanges.For example, Visa’s net profit in 24 was US$19.7 billion, more than 10 times that of the Nasdaq or the Hong Kong Stock Exchange.In 24 years, Binance’s net profit was about $1 billion; Tether’s net profit in 24 was about $13 billion, of which the net profit in Q4 was 6 billion – in fact, it is better to understand that most of the money in the world is paying, medium money is investing, and small part of the money is gambling.

If Tether Circle does not make mistakes in the future and is well-regulated, it will not be a big problem for Tether’s net profit to exceed Visa and Mastercard in the next one or two years.

The upstream and downstream of stablecoins mainly include deposit and withdrawal companies + payment companies, etc.

Among the deposit and withdrawal companies, the main leading players include moonpay, etc.Moonopay is a deposit and withdrawal company established in 2019. Its last round of financing is valued at US$3.5 billion, and its net profit in 24 years increased by 112% year-on-year, and its cash flow began to turn positive.The entry and exit track is the eternal theme of blockchain. As stablecoins become more and more compliant, the downstream entry and exit of stablecoins/OTC distribution of stablecoins has begun to grow rapidly.

In addition to deposit and withdrawal companies, we are also currently looking at the growth potential of payment companies.Payment companies can be divided into B2B and B2C categories.The application scenarios of B2B mainly include helping cross-border/surface enterprises to handle collection and payment and sorting cross-border entity funds; the application scenarios of B2C are mainly similar to U-card payment and financial management.

The payment company of web3 will be similar to the scenario of web2 payment company. The competition is highly fragmented, and players can easily gain a certain share in the market, but due to localization and compliance factors, it is difficult to achieve monopoly players in the market, which will cause certain difficulties for investment, but for business.The payment scenario of simple stablecoins is a low-gross profit and fierce competition.But now it is in the early stage of land grabbing. Finding customers + improving automation + using the funds retained by customers to do asset management are some of the key competitive points that we can see now.

BSCThe ecology of

Meme

BSC Ecology has undertaken the outflow of funds from the Solana and Base Ecological Meme tracks.Although TVL has not made any substantial breakthroughs overall, it is still high.In terms of handling fees and on-chain transaction revenue, the transaction fee revenue and transaction number have exceeded 1.2MUSD and 8M TXs respectively.

Blue is TVL, yellow is Revenue, green is the number of transactions; Data source: DefiLlama

From the perspective of origin, the main ecological projects that contribute to the entire BNB Chain are Pancake(DEX) and Venus(Lending).

Pancake, as a hub of on-chain ecosystem, contributes handling fees and revenue to the entire BNB Chain; Venus’ positive growth has become the second growth pole of BNB Chain, mainly due to short-term lending demand caused by IDO.

The main boost of the BNB ecosystem comes from the founder’s direct support for meme and the frequent launch of IDOs on Pancake chain.The Solana and Base ecosystems have been in a slump after the celebrity currency effect, and users have lost confidence in the Solana ecosystem.BSC becomes the center for the lost traffic of meme.But BSC still has its shortcomings. The highest ceiling of the head sign in BSC meme season was about 180 million, far lower than the ceiling of Solana meme season 3-4 billion in the same period.Therefore, finding on-chain alpha in the BSC ecosystem has higher risks and lower returns.Choosing the right β target is a relatively safe choice.

CAKE

In addition to BNB, DEX Pancake’s platform token CAKE is both relevant and cost-effective.

At present, the meme market of BNB ecosystem is still in its early stages.It is still in the early stage of hype, with pure meme hype such as dogs, cats, avatars, and CZ/Yi He shouting as the main line.Similar to the Ethereum main network meme market in 23-24 when Musk changed avatars and shouted orders.What can be expected in the future is the meme phenomenon of natural market conditions (similar to Solana’s Bome), which changed from the founder’s call to the market spontaneous pmup, to on-chain products such as AI, and ushered in a climax when mass entrepreneurship and returning to ICO.It can be said that the market of BNB ecosystem is a macro replica of the Solana market and a concrete reflection of the market’s pursuit of certain opportunities.With Raydium’s market value of up to 2 billion, Pancake still has the potential to hit the previous high.The average monthly handling fee of Pancake AMM V3 is around 10 million. Since the last bull market, the transaction fee of Pancake Stable Swap has been close to zero. The average monthly handling fee is 200K (it can reach 160 million at its peak)

In terms of token economics, according to bscscan, 1.685 billion CAKE has been destroyed, with a total release of about 2.058 billion, and currently circulating about 290 million CAKE.Pancake’s proposal in December 23 controlled the total supply to 450 million, ending the previous unlimited supply.

The other side of CAKE is worth Bullish because CAKE has extremely strong shovel properties.There has been news in the market that Pancake can use its own platform tokens to replace BNB to realize on-chain IDO.

All DEXs are ecological “leverage”, and PancakeSwap has the highest cost-effectiveness among the package “leverage”.Among them, Uniswap and Raydium represent Ethereum and Solana ecosystems respectively, and are both DEX “leverage” of the ecosystem, but both are expensive.Among them, UNI and RAY’s FDV/fees 7d are 17 times and 7 times that of CAKE respectively.While the BSC ecosystem still has the potential to continue to grow, CAKE is the “cheapest” DEX platform coin.

How to be incorrectA fixed additionSecret industries seek certainty

With the right fit

In terms of financing amount, the market in March has seen a very significant increase compared with the previous year; but in terms of the number of financing companies, it is a new low within a year – this is because there have been many large-scale mergers and acquisitions and Binance invested by MGX this month.Before there is no major innovation in the entire large crypto market at present, the market will hover in “garbage time”.Mergers and acquisitions will be frequent, and companies with sufficient cash flow will continue to improve their business territory. The great certainty comes from markets such as exchanges, securities companies, asset management, and stablecoins that have determined application scenarios. Everyone needs to accept the fact that the business cycle of the crypto market is close to that of the traditional industry and realize PMF and revenue as soon as possible.

Win with a strange

The best time to start a business is in 2025. When the positive financing cycle of the primary market is broken and the counterfeit bear market caused by the excessive supply of garbage assets is in the process of cruel clearance, the entire process may last until 26 years. When the negative cycle reaches the extreme, we will have the opportunity to see high-multiple primary opportunities, and high-quality start-up projects opportunities are also born. We can see that in this cycle, many high-quality entrepreneurs have entered the market during this period and face the ups and downs. We hope to always maintain admiration for such entrepreneurs and provide support within our ability. When consensus is no longer unified, opportunities will arise from the gap.

Everyone is asking how to find certainty in the uncertain crypto industry. The answer to 10K is to find and accompany those who have already begun to move forward.