Continue Capital Horse: Let's talk about the disputes of the new public chain, is a new king likely to ascend the throne?
The battle of the five kings in the new public chain has begun.Author: Pima, Founder of Continue Capital
Perhaps everything should start with Coinbase's Q2 report.
If you pay attention to the trading volume of projects on Coinbase, you will notice a subtle change since May: the daily trading volume of ETH has nearly caught up with BTC and even occasionally surpassed it. After the Q2 report was released, ETH's trading volume surpassed BTC for the first time in history.
Trading volume serves as a signature representing the trend of capital and the direction of incremental funds. Regardless of how we elaborate on the technical and grand narrative logic, trading volume straightforwardly tells you: a new trend may be slowly taking shape, and a new king may be about to ascend the throne.
Like the tragedy of Ned in A Song of Ice and Fire, this opens the curtain on the battle of the five kings of new public chains (ICP DOT SOL AVAX NEAR - Editor's note). If the trend of increasing ETH trading volume continues into Q3 and possibly for a long time in the future, then as time goes on, the loss of trading volume will surely strike like a thunderclap, greatly shaking the entire Crypto field's principles: nobles and commoners, is there really a difference?
The history of investment development in the Crypto field is a history of ETH expansion.
Looking at the development path after ETH's birth and even the previous BTC block size debate, whether it is the "revolutionaries" of ETH killers or the recently popular "royalists" of L2, they are all focused on the scalability of blockchain, striving to make large-scale collaboration among one billion people possible. We must clearly recognize the main roadmap of the industry's royal conflicts. Our obsession with public chains and scalability remains unchanged. Let's simply start looking at the market capitalization rankings on Coingecko: Dot Algo Icp File Avax Atom Near Eos Tezos Hbar Stx Harmony Iost Qtum Zil Nervos Kda. We have invested in all these public chains. I often think while jogging, why did Sol, which I had the opportunity to invest in but didn't, end up at the forefront? (People often dwell on their missed opportunities, like pnk, Sol)
Incremental growth is king. Whoever can seize the new market can achieve excess growth. The arrival of Axie has undoubtedly brought a strong impact on the entire industry's development, allowing the once ETH killers to find a strong sense of presence. I personally believe that there is a decentralized node law in the crypto circle: the number of decentralized nodes is proportional to the project's market value. You can check the number of nodes for BTC, ETH, DOT, AVAX, SOL (of course, I know this is not an absolute law; I am just providing an example). When doing DeFi, the primary consideration is security. New public chains cannot compete with ETH in the short term, but GameFi and NFT do not require high decentralization. The new generation does not carry the burdens of the BTC/ETH cult, so there is naturally no so-called loyalty.
Experience is paramount. The new generation has a relatively low perception of security and decentralization and does not delve into the significance of both. As long as the experience is smooth and the operation is convenient, a large portion of new users can be captured. This is also an important starting point for us to think about Web3 with some Internet thinking. If you have used music platforms like Audio—typical representatives of Web3 applications, with monthly active users of five to six million, you will know how seamless the Internet-like experience is, with no need for private key management, gas fees, or waiting for transaction confirmations.
As we build more and more Lego blocks and nesting dolls, it means the threshold is getting higher, which is definitely abnormal. Our original intention must be to let one billion people experience the revolutionary benefits of blockchain technology. The road may be winding, but the direction must be clear. We need blockchain services that are acceptable, enjoyable, and easy to use for the public.
Ecological diversity. The chicken-and-egg problem of developers/community leans towards the idea that development determines ecology rather than users. Therefore, continuous ecological iteration is crucial. You need to think clearly about what users will engage with after the ultimate completion of ETH 2.0. In the past decade, trading has been the absolute king of our industry. In the next decade, as the entire industry's infrastructure is built and improved, it will definitely not be just trading, which is so dull (though prices can continue to rise). It will be a prosperous scene where a new generation of native coins blooms and competes. Many ecosystems lack capable development teams; they either fork or remain anonymous. Check the leaderboard; how many of the Top 100 projects are anonymous?
Bridging the old and the new. Our market has already reached a market size of $200 billion, which is no small market. Gold is $8 trillion, A-shares are $11 trillion, and U.S. stocks are $50 trillion. We need to clearly recognize what stage we are at. Although the crypto circle continuously attracts more and more funds and talents with its innovative, free, inclusive, and decentralized characteristics, we should also turn our attention to using cryptographic technology to solve many problems in the real world. We also need key hubs that can connect the old and the new.
Without going beyond the circle, one cannot clarify their ambitions; without compliance, one cannot go far. If the lake is not enough, the sea will come to fill it. Projects that excel at going beyond the circle and bringing fresh funds into the crypto space should receive extra attention.
5. Team strength. Most capable public chain development teams were formed in 2017-2018, and after two to three years of development, they all basically launched on the mainnet last year, such as Dot, File, Avax, Sol, Near (Atom in 2019, Icp in 2021). Just like the explosive year of Internet development in 1998, when well-known companies like Sohu, Sina, Tencent, and Google were established simultaneously, we may find that 2020 was definitely the year of the multi-chain ecological explosion a decade later. Now, if you want to enter the public chain space, without five years of effort, you won't be able to create any ecology. The ingredients are limited; how to cook depends on you all.
Only with the great development of infrastructure can ecological projects spread their wings; only with the prosperity of smart platforms can Web3 applications become widely adopted.
Finally:
The spring light is just right; seize the time with poetry and wine.
With dreams as horses, wielding swords to roam the world.
