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Author: Charles Source: HFARESEARCH Translation: Shan Ouba, Bitchain Vision Realm We are in an era when many people call the “cause coin cycle”, and some people even boldly call it “aluminum super cycle”.We have witnessed the market value of emerging coins like WIF in just a few months from zero to billions of dollars.Along with the hotness of the phenomenon of coins, products such as pump.fun have emerged.Regardless of whether you like or not, the cause coins are a force that cannot be ignored. For most active cryptocurrency participants, so far, the overall performance of the coin is shocking, and its increase as a sector far exceeds any other plates.When we see the transactions obtaining huge returns through a certain coin, a question is always lingering: “How do they identify this specific cause coin?” Of course, there is a certain survivor deviationBut in addition, are there any other factors playing a role? In HFARESEARCH, we usually focus on fundamental investment, trading and mining concepts.This makes it difficult for us to cover the foundation of the factors -similar to NFT. The investment logic of the coin is often more blurred, and it depends on the “atmosphere” and the mold itself, which makes fundamental analysis more difficult.At least before we discovered what we said “the theory of soaring currency TVL”, we have always thought so. The theory of soaring currency tvl believes that the top aluminum or a basket of top -level aluminum coins will be bet on the leverage of the blockchain TVL.Before we list the various examples we have seen in the past, let’s first understand why this is like this. We know that with the growth of the blockchain TVL, some funds will flow to some applications or “destinations” on the chain … X% will enter the currency market, Y% will go to the head DEX to provide liquidity, etc.EssenceTherefore, it can be logically assumed that a small part of the funds (although the proportion is small) will find the most risk exposure to bet on the discussed blockchain.What do they do?Well, it can be achieved by purchasing leading coins or a basket of lead.Perhaps for some of you, this seems obvious, and it does not need to be specifically pointed out, but we believe it provides a way to participate in the value and may reduce the risk, because it provides it providedA fundamental method of evaluating future coin performance (rising or falling). Let’s take a look at several examples in history: The above example depicts an unquestionable picture: TVL inflow = top -level coin performance.If the growth of TVL can be predicted, then the TVL prediction can be predicted by holding the leading model on the chain. Critics of this strategy will say that because the strategy needs to know which is the leading factors to identify where the TVL flows can be identified, the return rate will be lower.This is a reasonable criticism. This strategy will definitely not allow you to buy a coin at the market value of 100,000 US dollars, and then soar 1,000 times to $ 100 million all the way.However, for some projects with a small market value and mature market value, and then from there to accumulate income, this strategy can be very effective.For example, while the parabolic TV -tvL growth experienced by Base at the end of February to early April, Toshi soared from a market value of $ 40 million to more than 300 million US dollars, and made such a bright return in less than 2 months. The growth of TVL can be divided into two ways: long -term and short -term.Long -term prediction is actually where TVL will flow in the next few months.For example, we may point out that Base has Coinbase as a channel to guide retail users as a reason for TVL growth.We may study the close relationship between TON and Telegram to understand all 900 million Telegram monthly active users that may bring to the TVL impact of the blockchain.We may also point out that Solana has excellent chain user experience and mobile wallets as a reason for TVL to flow there.Do you understand?Long -term predictions will pay attention to the deeper distribution fundamentals of the blockchain, in order to predict TVL growth within a longer period of time.Then you will study the main factors on the chain and bet on the accordingly. Short -term strategies pay attention to recent catalysts, such as points planning or airdrops, as the reasons for TVL growth.For example, after announcing its Surge Points program, $ Foxy, a leading model on Linea, performed very well during the tvL flow in with it. Short -term strategies need to be more active in the market and capital where the market may flow according to the incentive plan.This is relatively similar to the games played by some of us in the last round; the liquidity pool 2 of the main DEX on the new chain is used as a way to increase TVL by the incentive plan. A more operable example may be SCROLL. Since they have recently launched the “MARKS” (understandable as a point) plan, we have seen TVL’s parabolic growth.Will Scroll become the next main hunting ground for short -term strategies?
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