Bankless: What has cryptocurrency built in a bear market?

Author: Arjun CHAND, Bankless; Compilation: Deng Tong, Bitchain Vision World

Cryptocurrencies are lively again.All signs of the bull market are here.Tokens have twice increased overnight.The CT timeline is full of “I gave you X before it completed 1000 times at a price of $ 69”.

However, before so excited, there is usually a quiet time.This is when the real bull market happened.This time is no exception.

As early as November 2021, Bitcoin reached $ 69,000, and Ethereum reached $ 4,800.The total value of cryptocurrencies exceeded $ 3 trillion.Everyone thinks that cryptocurrencies are the future of finance, and their growth seems unstoppable.But unfortunately, it was the small top of the bull market.In the next two years, the market has been falling.We entered the bear market and bottomed out in November 2022, marking the collapse of FTX.

The bear market may seem frustrating, but it is not all bad news.Yes, the price has fallen very hard. The voice of “cryptocurrency is dead” is still echoed, but what did you say?

The bear market has attracted the builders. The builders have created projects suitable for the product market. Products with PMF have attracted new users and investors. The use of people to speculate that cryptocurrencies are the future of finance. The new bull market has begun.

People strongly feel that we are now before the real bull market takes off.If you listen to the anonymous of Penguin PFP on X, they will tell you that the past few months are just a preview, and we are in a crazy journey.

However, this article is not about the upcoming bull market and how you should prepare.This is to celebrate the builders who stayed and built a solid project in the winter of cryptocurrencies.Today, we will focus on some key sectors of the development of the bear market.

Solana’s glory returns

There are usually many ways to achieve goals.The return story of Solana strongly reminds us that we can use different methods to achieve large -scale adoption.

Do you remember that we mentioned that the bottom of the bear market is marked by the FTX crash?Our builders’ shouts to the ecosystem seem to be appropriate, and many people are worried that the ecosystem will collapse.

Solana’s regression story is simply a miracle, and the entire industry is celebrating.

Solana virtual machine (SVM) is attracting attention, which is sufficient.As the local cost market mechanism keeps the GAS price at a low level, the only “only possible” tag on “Solana” is not just a Meme.SVM’s influence is expanding from Solana.The modular Rollup like Eclipse is adopting it. Ethereum heavyweights like MakerDao are considering using it for their own local chain. Innovative projects like ROME protocol are using it to solve Ethereum expansion challenges.

In terms of applications, Solana has rich features such as Jupiter and Tensor, which are redefining the user experience of Defi.The excellent user experience of Solana applications is still the low cost and fast transaction execution of the network.

In addition to a variety of application ecosystems, Solana also cultivated a loyal community with unique culture.From NFT and other NFTs such as MAD LADS and Tensoria to Memecoin such as BONK and Dogwifhat, the ecosystem is transformed into a live -action casino -don’t forget all the qualities of the outstanding participants in the cow market in the cow city of the ox market.

Layer2 value -added

The Ethereum community has a dream, a dream that expands through L2 so that users can conduct cheap transactions.Now, as L2 is expanding Ethereum about 5 times, this dream is becoming a reality.

L2 is the key to the success of Ethereum and scalability.Many projects were launched in 2021. Some people speculated that with the implementation of Rollup’s centered on Rollup, it showed a clear road to expansion. Their launch promoted ETH and several ETH ecosystem tokenThe rise.Since then, L2 has experienced remarkable growth.Here are some statistics, showing that L2 is a major successful case of a bear market:

As of January 2024, the daily transaction volume processed by L2 was 5 times that of Ethereum.

On February 21, 2023, Arbitrum became the first Rollup to surpass the Ethereum main network in daily activities. Later, it reached 2.5 times the transaction volume of Ethereum after the $ ARB airdrop.
In December 2023, ZKSYNC Era became the first Rollup that traded in 30 days that surpassed Ethereum within 30 days.
By April 2023, the total TVL of all L2 exceeded $ 10 billion for the first time to double to $ 20 billion by January 2024.
At present, 4 L2 has more than $ 1 billion of TVL, one of which (BLAST) has not even been launched.There are currently 12 rollups, and each Rollup TVL is more than $ 100 million.ARBITRUM is a leading position, its TVL exceeds $ 10 billion (50% of the market share), while Optimism ranks second with more than $ 5 billion (25%) market share.

With Danksharding (EIP-4844), data availability solutions (CELESTIA, EIGENDA, Avail), ROLLUP frameworks (OP Stack, Arbitrum ORBIT, ZK Stack, Polygon CDK), and Rollup, the service provider (CALDERA, C. ONDUIT) and other progress, altlayer), We may see thousands of Rollup deployed in 2024.

The simplicity of rollup deployment means that the team will try to stand out.We have seen this in Rollups such as Blast and Manta Pacific, and they provide native return for holding funds on their chain.

Modularization, not extremely complexism

In the era of modular blockchain, the cost of high GAS is no longer an obstacle to building cool things on ROLLUPS.Rollups can now expand by storing data from different layers outside Ethereum.

The modular blockchain has deconstructed the various layers of the blockchain (execution, settlement, and data availability) as a special chain. It has made significant progress during the bear market and is now adopted in the early days.

There are innovations at all levels.For example, at the execution level, teams such as Monad and SEI are committed to parallelization EVM to improve throughput.At the same time, teams such as Aptos, SUI and Movement Labs are developing new programming languages for blockchain and smart contract development, such as MOVE.

Today, data availability (DA) layers are particularly interesting.Celestia was online in October 2023, officially kicked off the prelude to the DA war.Main ecosystems such as StarkNet, Eclipse and Manta, as well as L3 and other L3 such as Lyra and AEVO have begun to integrate Celestia to DA, which marks that as more chains are launched with the support of Celestia, this trend may shape the future.

It is expected that other DA solutions (such as EIGENDA and Avail) launched in 2024 will provide a variety of DA options for chain stores.Coupled with Ethereum’s own prototype Danksharding (EIP-4844) (expected to be launched in 2024 to reduce the cost of DA in L2), see if the chain insists on using Ethereum for DA or shifting to a dedicated DA layer.Piece is very interesting.

The future is multi -chain and cross -chain

Bridge in cryptocurrencies:It is a legend that connects different chains.We may prefer the world without them, but the fact is that they are indispensable for the multi -chain ecosystem.

In 2022, Vitalik Buterin shared his point of view, that is, the future will be a multi -chain but not necessarily a cross -chain. The reason is the security issue of the bridge.However, as we see again and again, users and capital have turned to the most favorable opportunities.With the increase of different chains, users and capital have inherent needs in these ecosystems, which leads to major development of interoperable solutions (such as message protocols and liquid networks that support data and asset movement).

The key innovations developed to support this cross -chain function during the bear market include:

Message transmission protocol -these protocols enable data on a chain to receive data from other chains.The main participants in this field include Layerzero, Axlar, Wormhole, Chainlink CCIP, and Circle CCTP.
Liquidity network -now is also known as a bridge -based bridge, these networks have promoted asset transfer between chains.The leading solutions include ACross, Stargate, and Thorchain, as well as interfaces such as polymer and Jumper such as li.fi to help users find the best route for cross -chain transactions.
Cross -chain applications -These are applications that are unrelated to the blockchain on the message transmission protocol.Popular examples include liquidity networks, such as Squid of Axlar, Stargate with Layerzero, and various applications such as Radiant Capital Market on Layerzero or PRIME protocol borrowing platforms on Axlar.
Cross -chain token standards -these standards ensure the exchangeability of tokens across blockchain, and seamless cross -chain transmission through the destruction and coin -supported by the message protocol.The famous standards include Layerzero’s OFT, XERC20, Wormhole’s XASSETS and Axlar’s IST.
Multilateral compatibility tools -multi -chain reality requires the development of ecosystem tools.This includes applications and wallets built -in cross -chain transactions, as well as multi -chain instrument panels, analysis platforms and blockchain browsers to enhance the DEFI user experience in the multi -chain environment.

The demand for cross -chain governance such as Uniswap, the cross -chain expansion of the LIDO on WSTTH, and the billions of transaction volumes of liquidity network processing highlight the importance of message transmission protocols and liquidity networks in the multi -chain ecosystem.With the development of concepts such as the concepts such as the concepts such as the concepts such as the super chain and the polygon aggregate blockchain and the Polygon CDK using OP Stack, the role of these interoperability solutions will be worthy of attention.In addition, with the convenience of deploying Rollups, we are moving towards the future with thousands of chains.With the continuous expansion of the ecosystem, observing how these solutions are adapted and executed on a large scale will become a key area for people’s attention.

Intent to illuminate the DEFI Dark Forest

The intentions are here.Today’s intent system and its price limit orders, aggregation, batches, and solving device have laid the foundation.They laid the foundation for future advanced intentions and promised to provide MEV protection, advanced aggregation, meaning standards and privacy, which will simplify everyone’s use of DEFI.

The concept of “intention” was introduced to the mainstream through a speech and became a popular word in 2023.

Simply put, intention is the result of users who want to achieve through interaction with the application.This is not a new concept. The intention has always been part of the user experience, although the form is relatively elementary.For example:

UNISWAP promotes the intention of exchange asset X to asset Y.
Opensea cater to the intention of buying NFT.
1Inch solves the intention of exchange assets with the best interest rate.

These examples represent the intention of basic levels, focusing on satisfying the user’s wishes, but still requires users to respond to the complexity of the transaction execution.

In the desire -based examples, users convey the results they expect, without detailed explanation of the execution process or restrictions on potential income settings.The third -party agent called the solution device executes these intentions and competes in the intention agreement.They are influenced by auction and gaming theory to provide the best results as possible to win the order flow generated by users.

This method has significantly enhanced the DEFI user experience, provided greater flexibility and customization, while abstracting the complex execution process.In the environment of thousands of chain stores, the importance of this point has become more obvious. This user -centric flexibility can make the life of users easier.

Although the concept of intention began to be popular in 2023, projects such as COWSWAP, 1Inch Fusion, and Across have laid basic work.As intended applications are becoming more and more popular, the role of solving device will become crucial.They are architects that realize user intentions.

In addition, agreements such as Suave, Anoma, and Essential have been developed for many years and are about to be launched.These protocols are exploring the intention of large -scale scale, in -depth research on order flow, solution, MEV, specific field language, block construction, decentralization and value extraction, and break through the concepts in the blockchain stack more deeply in the blockchain stacklimit.

The evolution of intentional landscapes is a development that deserves close attention in the next few years.For those who are interested in exploring more deeply, the Flashbots team has created a comprehensive instrument board on the OrderFlow.art, which provides valuable insights for this emerging field.

Other key development in emerging industries

When we ended this article, it is important to realize several other industries that have experienced a significant growth in the past two years and are expected to have a significant impact on the future pattern:

Pure again -Following the merger of Ethereum in 2022, the liquidity pledge of ETH and other assets has become the cornerstone of DEFI.ETH’s LIDO (STETH) and Rocket Pool (RETH) and SOL’s JITO have received billions of dollars.Before 2023, mobile pledge has always been a trend, but now the re -pledge has become a new field of DEFI.The ecosystem led by Eigenlayer is continuously developing around pledged. The projects include Ether.Fi, Kelpdao and Swell.These measures enable users to pledge their tokens by using Eigenlayer and other protocols to obtain additional rewards. The agreement uses these assets to protect various DEFI infrastructure parts, such as the DA layer with EIGENDA.
Real World Assets (RWA) -the idea of token and putting everything on the chain may be a Meme, but this field has made significant progress.The efforts of tokenization of tangible assets such as real estate and the US treasury coupon are underway.ONDO, Parcel, LANDX and other projects are leading.
Blockchain game -the game industry on the chain is trying some novel concepts, such as playing games to make money and the ownership of assets in the game.Early early success in “Axie Infinity” indicates the future of light. After years of development and investment, this breakthrough game may attract a wave of new users.Ecosystems such as Avalanche and Polygon are strategically positioning themselves as the preferred platform for game deployment.Pay close attention to IMMUTable and Beam and other projects in this vertical field.
Artificial Intelligence (AI) -This in this field aims to integrate two most radical innovations in recent decades: cryptocurrencies and artificial intelligence.Although it is still in its infancy, as the project begins to enter the market, we can foresee the event will surge.Projects such as Bittensor and Olas pioneered the spirit of artificial intelligence with the decentralized spirit of cryptocurrencies.
Decentralized physical infrastructure (DEPIN) -the potential in this field attracts mainstream attention to cryptocurrencies.Through the application of transparency and community governance principles, the DEPIN project aims to create a fair system for physical infrastructure cases.For example, to imagine a Google map substitute with a community.The DEPIN protocol like HiveMapper is turning this concept into reality, connecting the real -world driver to an encrypted map infrastructure to compensate for their global drawing roads.

That’s how today’s content is!

The bear market has always been a hotbed of innovation. Although we have introduced a lot, there are no doubt that there are more things to be discovered.