In 2020, I will only serve bitcoin, Ethereum and DFI

Disclaimer: This article is intended to convey more market information and does not constitute any investment advice. The article only represents the author’s point of view, not the official position of Mars finance and economics. Editor: remember to pay attention to Oh source: Babbitt in a twinkling of an eye, 2020 has passed. In this year, I was very impressed by four key words, which are “Mask”, “bitcoin”, “Ethereum” and “defi”. The first key word, needless to say, we all understand. The rest of the key words are actually related to money. In this year of deep recession, the performance of encryption assets such as bitcoin is really remarkable. So far, the overall market value of bitcoin has reached 540 billion US dollars, which has surpassed the Berkshire Hathaway company led by Warren Buffett, which is enough to attract everyone’s attention. (Figure 1: data from and in this article, I’ll talk about the words “bitcoin,” “Ethereum,” and “defi.”. 1、 When is the hodl of the famous bitcoin institution cow? In September of 19, the author re sorted out his understanding of the special coin. He thought that it had regular cycle like a fungus, while the counterfeit coin (or altcoin) was the soil for cultivating speculation. Finally, he drew an irresponsible conclusion that: (1) the rich have a valuable storage demand for it; (2) storing it can become a rich man. Although this is indeed a correct prediction today, I was totally unprepared for the black swan incident on March 12. On the day of the global asset crash caused by the epidemic panic, bitcoin plummeted to the minimum of more than 3000 US dollars. At that time, some friends asked me what to do? I awkwardly replied, “pretend to be dead” With the global water release situation becoming more and more serious, and after the output of bitcoin has been halved, the consensus of “digital gold” has become stronger and stronger. We have seen a large number of institutional funds pouring into this digital asset through gray scale. We have seen new and old financial service institutions such as PayPal and DBS Bank actively embracing bitcoin, and we have also seen a global top stream such as a certain P station The website only accepts encrypted assets such as bitcoin as payment method. The fundamentals of bitcoin have never been so dazzling. (Figure 1: the release of US dollars) finally, on December 16, bitcoin broke through the important threshold of $20000. Since then, bitcoin has been on the rise. In this process, retail investors have less and less coins, while institutions have more and more coins. The pricing power of bitcoin has completely fallen into the hands of the rich on Wall Street. Different from our ordinary class, the rich don’t choose to retreat because the unit price is tens of thousands of dollars or hundreds of thousands of dollars (such as Berkshire Hathaway stock). As long as they think it is worth investing, they will throw in a lot of real gold and silver. Looking back on the past, “institutional bull” has gradually become a reality from the imagination put forward by a few people. The remaining question is: how high can it fly in this cycle? Although human greed is hard to measure mathematically, we still have some useful data for reference: Historically, bitcoin reached the peak of the cycle about a year after the halving; many big money holders expected the market value of bitcoin to reach $1 trillion in this cycle, which shows that this is a very important psychological threshold; Google’s search for “bitcoin” is hot The higher the heat, the more likely it is to indicate “top”. It can be compared with the keyword “gold”. In the last cycle, when the search heat of “bitcoin” exceeded “gold”, bitcoin entered the period of cycle top breaking; (Figure 2: comparison of Google search popularity between bitcoin and gold) 1. The GBTC premium of gray scale; as for the data such as “S2F prediction model”, I think we need to be cautious. In general, bitcoin is the most deterministic encryption asset and the real Holy Grail of investment. 2、 Besides rollup expansion, what else can we focus on? In October this year, messari, a cryptocurrency data provider, reported that Ethereum is expected to become the first public chain with an annual settlement of more than $1 trillion, while the data of bitcoin network is expected to be $800 billion. This development trend is inseparable from the rise of decentralized finance. Liquidity mining (also known as yield farming) and governance token set off the first speculative fever of difi this summer, and a large number of users flocked to Dei projects such as uniswap, compound and AAVE, which caused long-term congestion of Ethereum network, and the highest network gas cost reached 1000 Gwei, a simple DEX transaction costs traders hundreds of yuan, while more complex transactions cost thousands of yuan. In addition, nearly 20 billion US dollars of stable currency assets (including usdt, usdc, Dai, etc.) have been issued on the Ethereum platform, while the total stable currency assets of all the other public chains are not enough to be half of the TaiFang platform. According to the 2020 encryption project developer report, Ethereum has attracted the most developers to contribute to its ecology this year. We can see that Ethereum far exceeds many so-called “Ethereum killers” in terms of the amount of assets on the chain, the amount of settlement, the number of users and the number of developers. Even the big brother bitcoin is somewhat eclipsed. Of course, Ethereum is currently facing severe capacity expansion problems (far more urgent than BTC). Unfortunately, the development progress of Ethereum 2.0 obviously can not meet the market demand (Note: Although Ethereum 2.0 beacon chain has been online, but the expansion stage is still far from landing). Therefore, the medium and short-term expansion hope of Ethereum is placed on layer 2 technology. How to choose rollup scheme, side chain and competitive chain? According to the medium and short-term expansion roadmap proposed by vitalik buterin, the co-founder of Ethereum, rollup (including “optimal rollups” and “ZK rollups”) is the next major expansion play of Ethereum. If we say that the first outbreak of defi is only suitable for large-scale participation, then in the coming layer 2 era, the threshold for retail participation will be greatly reduced, and a better user experience means that more people will use defi products, which will bring more liquidity. This will generate a positive cycle, and eventually trigger the second explosion of defi. Before that, we still need to wait patiently for the development and improvement of infrastructure. Among them, the optimal rollup scheme developed by optimism and ZK rollup scheme developed by matter labs are currently the most concerned (reason: both schemes have head defi project partners), while L2 such as looping and devorifi are of great concern Cooperation is also worth our close observation (reason: interoperability between different rollups is the most important problem for layer 2). At present, an Ethereum layer 2 competition station will break out in the first half of next year, and it is difficult to determine who will win this market in the short term. (Note: from the perspective of experience, the time taken by ZK rollup to exit from the Ethereum main network is far less than that of optimal rollup, so individuals prefer ZK rollup). Of course, in addition to the rollup solution recommended by vitalik, users may also choose the side chain or competitive chain, which may happen in the case of network congestion. The competitive ones include smart link, Polkadot, xdai, etc. these side chains or competitive chains can serve as overflow devices by compatible with the Ethereum execution environment, and even serve as a supplement to the main network of Ethereum in the short term to realize some consuming applications (such as the recently popular dark forest game). For example, rollup scheme is equivalent to building some parallel spaces above the big city of Ethereum, so that residents can still enjoy the urban life of Ethereum. The POA side chain is the countryside close to the big city of Ethereum (it will be included in the big city of Ethereum in the future), while the competition chain is a relatively small city far away from Ethereum Households need to choose their own options according to their own trade-offs. What is the impact of eip-1559? In addition to capacity expansion, Ethereum will face community disputes over the implementation of the eip-1559 scheme in the coming year. In short, the scheme aims to change the current “first bidding” fee mechanism of Ethereum into two kinds of fees, one is the basic fee which will burn, and the other is the tip fee (back to bidding) for miners when the network is congested. However, there are great differences between Chinese and Western views on what kind of impact the scheme will bring. In short, researchers represented by vitalik tend to agree to implement the scheme, while domestic miners think that eip-1559 is meaningless and will only bring worse experience. In addition, miners tend to “Ethereum should operate based on pow consensus mechanism”, Ethereum Another bifurcation of may be on the way. If the community fails to reach a consensus and there is a bifurcation, then we will have two different Ethereum roadmaps: rollup scheme supported by vitalik et al. + EIP 1559 scheme + POS roadmap of Ethereum 2.0; rollup scheme supported by miners + eth 1.0 Of course, this does not mean that Ethereum will encounter great problems. These two routes can be carried out at the same time, and investors only need to hold their tokens at the same time to ensure that they enjoy the ecological dividend. Summary: in addition to the above concerns, another very important point of eth is that the SEC has determined that it does not belong to securities, which means that eth, like BTC, is the encryption asset with the least regulatory impact. However, the recent experience of XRP is not just an example. It is expected that more regulatory actions will be taken in the future, which is hidden from other crypto asset projects that have conducted token sales Land mines. In general, BTC and eth are the most deterministic encryption assets of the “institutional bull” this time, and they are also the assets that I think are most suitable for all encryptors to hold. This does not require too much research and luck. 3、 Defi will be the best hope of Shanzhai season, but it is difficult to avoid jumping into the pit. Nevertheless, users who have new contact with encrypted assets generally think that the prices of BTC and eth are too high. This fear of heights may force them to choose some small market value counterfeit coins or competitive currencies. Whether this will lead to a new “alteason” is not very certain. At present, a more recognized view is that there will be no general upward trend in this bull market, that is, the good will be better, and the bad will be worse. Among them, altcoin, the most promising one, currently belongs to the defi token with cash flow income. Since April this year, the author began to take the application of profi seriously, and experienced some of its interesting products, such as AAVE, compound, uniswap, synthetix, sushiswap, curve, balancer, year, Bancor, nexus mutual, dydx, set protocol, looping, zksync, mstable, xdai, Mellon, keeperdao, 1inch, moonishap, perpetual Protocol, Hakka, pooltogether, dhedge, furucombo, etc. In addition to dealing with all kinds of new agreements, we will also encounter various kinds of pits, such as: entering pool 2, which shows high annualisation, which is a huge pit; copycat’s probability rate pit (except sushiswap); taking non mean return asset pairs (especially negative correlation assets) to market and arbitrage loss( (also known as impermanent loss) will make many people despair; the project contract is not reviewed, or the audit is not careful enough, leading to hackers’ attack; the project side does not talk about martial ethics, and uses the management key to do evil; what they do is insurance projects, but they do not have insurance; they do not adjust the prediction machine (feeding price), which leads to hacker arbitrage attack; I believe that there will be different pits waiting for us, as long as one does not Be aware that participating in defi can cost you money, or even zero. Of course, there are many opportunities to participate in defi in the early stage. For example, uniswap and 1inch gave two big surprises this year, which tells us that it is rewarding to prepare more addresses and interact with interesting defi projects. Generally speaking, this summer’s DFI belongs to the spot DEX and lending applications, while the derivative complex defi applications have not been widely used, which may be waiting for an opportunity: the explosion of layer 2. Another problem is that the utilization of miner extractable value (MeV) has begun to threaten the existence significance of arbitrage applications (such as keeperdao), which is a headache. The research on MeV has become more and more, which will have a significant impact on the ecology of Ethereum and the whole public chain. At present, aiming at this problem, an organization named flashbots has emerged. Researchers believe that MeV problem is inevitable, so it is necessary to build an extraction tool in an open environment. 4、 To sum up, for the next 2021, the most deterministic encryption asset opportunities will be BTC with the largest market value and eth the second, while the layer 2 protocol serving Ethereum, a large ecological competition chain, and leading DFI projects (i.e., the so-called blue chips) may also have some opportunities. We always think that we can beat most people, and that’s the very idea that most people hold. So, slow down and treat yourself as an ordinary person. Refer to the link: HTTPS: / / / /

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