Famous KOL knower: Which potential tracks and projects are worth paying attention to?

Original Title: “Coming at you live from goblin town”

Original Author: knower

Translated by: Eva, Chain Catcher (This article has been partially edited)

The recent market has not been optimistic. I feel that instead of studying why these cursed tokens are experiencing price hell, it’s better to observe some more promising roles of cryptocurrency. Many great things have happened in various fields of cryptocurrency, despite some nonsense and sell-offs. I tend to be a "glass half full" person, which makes it easier for me to see the positive side, even though our beloved tokens are being hit by a sea of red. Perhaps this is just my perspective, but I find it hard to be bearish on cryptocurrency for a long time.

I have been involved for a long time.

About a month ago, I wrote a similar article, and this is the link. Observing those published and upcoming promising projects not only helps to divert attention from price action but also gives you a bit of "aLpHa" when your net worth is plummeting in real-time, seven days a week, 24 hours a day.

As a brief disclaimer, I hold some of these tokens, which is not financial advice. I just like these tokens. Some of them may have low caps, and I do not endorse them; I generally try to avoid falling into Ponzi schemes, so please invest cautiously. This article is meant to serve as an explanation; I do not want you to go bankrupt chasing after them. If you are lazy and do not want to read the rest of this article, I will give a brief summary, omitting some topics, so you have the motivation to read the whole piece. If you don’t want to be spoiled, please cover your eyes and jump to the next section.

• Optimism is more likely to release a token soon, which will open the inevitable L2 season. If you are not prepared yet. If you want to continue reading, this will be expanded upon.
• Cross-chain bridges have become a very hot topic, with protocols like Synapse and LayerZero dominating discussions in this area. As more blockchain TVL and DAU continue to grow, bridging solutions are becoming increasingly important for separating cryptocurrency from its fragmented liquidity dilemma. New bridging and blockchain interoperability solutions are emerging weekly, so be prepared for slight oversaturation in the coming months.
• Sudoswap is the darling of cryptocurrency, providing utility for NFT trading (liquidity) and bridging DeFi and NFTs. Jpeg'd is also cool, and there’s even a new NFT-related token index on the market, which I think is thoughtful.
• Despite the absolute foolishness of the number of high FDV altcoins, DeFi on Solana looks more promising over time. Protocols like Drift and Zeta are leading the way.
• Alchemix V2 should be a fairly solid upgrade for DeFi blue chips. Although the token has experienced a brutal "only down" price trend since its inception, if you want to be a frustrated long-term winner, ALCX might be a good choice. There are a few others, like CVX, YFI, and AAVE, which I will discuss from different angles later.
• NFT trading volume has been increasing recently, with projects like Moonbirds and Miladys leading the way. I am still unsure about the final form of NFTs, but trading these digital pixels is enjoyable, and PFPs can sometimes be very appealing. Perhaps holding blue-chip NFTs for the rest of this year could be a safe bet; someone told me that people prefer art and collectibles over tokens.
• I am increasingly optimistic about the future of GameFi, but I am extremely dissatisfied with the current state of the industry. I want to write a GameFi paper for Substack at some point, proposing some engaging and interesting ideas and building more complex models for these protocols. Until then, we must wait and see who can win this crowded race.
• Cryptocurrency infrastructure may be a very easily overlooked industry, and this article from Zee Prime Capital provides a great introduction for anyone like me who has no clue about the topic.
• As you may know, I am a loyal fan of on-chain derivatives. A large number of new protocols have emerged, all trying to capture the largest piece of the derivatives pie. There is no conclusion yet on who will take it all; I fear the ultimate on-chain derivatives behemoth has not yet entered the room with us. If you want to dig deeper into this industry, be prepared for the number of protocols and the level of analysis you must undertake; don’t lose your mind.
• The Ethereum merge may be delayed, but it’s not surprising for those who have experienced at least one land grab. Many believed this revolutionary upgrade would be released in June, but it has now been confirmed that it may come later this year. If I had to bet with options, I would say the merge will be released in the first quarter of 2023, but I’m just guessing here.

Enough small talk; it’s time to examine everything that has happened in the cryptocurrency space over the past few weeks. I may have missed some important things, so if you want to hear my thoughts on anything else, feel free to message or comment.

Solana DeFi Cambrian Explosion

Solana has received a lot of attention due to network outages, price volatility, and the ridiculous FDV of many tokens in its ecosystem. Recently, I have noticed a large number of protocols working hard to legitimize the Solana DeFi space. I’ll name a few examples: Drift, Zeta, Jupiter, Katana, MarginFi, Fluidity, Xenon, Vovo, Atrix, and Friktion. As I write this article, I realize I may have missed some.

All of these are collectively creating a more cohesive, practical, and innovative DeFi ecosystem for Solana. Whether it’s perps, automated investment strategies, structured products, or lending, I believe all of these offer something valuable. Since diving deep into these protocols, I have concluded that the top three chains in DeFi are Ethereum, Solana, and Avalanche. If more people catch on to these protocols and join in for the tokens, I think we could see a revival of Solana. Stay diligent.

Hackz

Unfortunately, last week the Beanstalk protocol was hacked, resulting in losses of over $180 million if the numbers I saw are accurate. As for the perpetrators, they should have made $80 million, quite a bounty. Hacks are always hard to talk about, and I hope the protocols and those affected can recover from this event in some way. I support you.

Assorted Bangers

I decided to add this section to help categorize some projects that don’t fit into specific sections. I have been researching protocols like UXD, Gearbox, Axelar, Yeti, Psyoptions, and Mars, but there’s still some work to be done regarding their backgrounds.

Overall, I am optimistic about cryptocurrency. The market looks strange, the Nasdaq index continues to be slaughtered, inflation is rampant, NFTs are on the rise, and you must be a madman to be obsessed with this and try to guess where it’s headed.

For more understanding of crypto infrastructure, @ZeePrimeCap’s recent article won’t steer you wrong. As blockchain continues to evolve, infrastructure becomes increasingly important. While the value of infrastructure tokens may not rise as much as we hope (assuming web2 dynamics play out), I believe they are a safe bet. The worst-case scenario is that you learn more about infrastructure without making money, so doing a bit of reading really doesn’t hurt.

Aura Finance is another cool protocol that has had a brief moment of glory, boosting the price of the DeFi blue chip BAL. Aura aims to provide a protocol built on Balancer that can offer additional incentives for Balancer LPs and BAL stakers. Old Ponzi economics. As far as I know, no announcements have been made yet, but I have been closely watching when it will be released. It may have already appeared in the "blue-chip" section of DeFi, but it remains quite speculative and more like a new development. I don’t want to talk about Moonbirds, so we won’t discuss that. Congratulations to all holders; unfortunately, I am not one of them.

Cross-Chain Bridge Season

Protocols like Synapse and LayerZero are the two most well-known in the cross-chain communication space, each with its unique value proposition. Personally, I am a loyal fan of Synapse and use it frequently. Over the past few months, I have seen a lot of discussions about cross-chain bridges, with new protocols and dApps based on LayerZero increasing.

Some of these include Interswap, which describes itself as a "fully composable native asset cross-chain AMM" built on LayerZero. Stargate Finance is another dApp built on LayerZero, as we may all be familiar with the STG token and its price trajectory since inception. Nomad is another promising newcomer that utilizes optimistic solutions for cheaper cross-chain communication. With all the discussions about L2 and scaling, I believe similar dynamics will play out in cross-chain bridges in the near future.

As for SYN, the token has been holding up well. Synapse has been developing like crazy, and I have been impressed with the team. Since its launch, Synapse has surpassed $9 billion in trading volume, making it the current leader in this interesting crypto space. When I think of the tokens for these protocols, there is indeed a voice in my head that keeps telling me that a "cross-chain bridge season" may emerge, although I have no reason to believe it will happen before L2 season. As I mentioned earlier, with the implementation of scaling solutions for cross-chain communication, only similar narratives will make sense; we just need to give it some time for developers to work.

Near and Aurora

If you’ve been following some of my tweets over the past month, you might know that I am unimpressed with NEAR’s price action. Despite having a massive ecosystem fund of around $800 million, rumors about algorithmic stablecoins (USN), and NEAR seeming undervalued compared to competitors like AVAX, LUNA, and SOL, the token has not performed as well as many hoped.

With the Rainbow Bridge and its next-level user experience, bridging to Near and its EVM-compatible counterpart Aurora is very easy. If you don’t believe me, try it for yourself. It’s not just a very simple funding bridging solution; the native gas token on Aurora is ETH, which is very helpful for those who are more familiar and funded on Ethereum. Bastion Protocol has been making some noise since its lock-up, accumulating over $580 million in TVL. That’s huge. In their own words, Bastion is an "algorithmic DeFi lending protocol" aiming to become the liquidity hub for Near. In terms of the Aurora ecosystem, Bastion seems to be the clear winner in my view. I’m sure more protocols will start to emerge (hopefully derivatives platforms), but for now, it’s hard to compete with Bastion and its native token BSTN.

Across the Near ecosystem, there are several projects that impress me, mainly due to the general scarcity currently occupying the chain. Here are some quality projects (note that I’m not talking about tokens, as tokens are messy and low caps can easily explode): Trisolaris, Ref Finance, Flux Protocol, Spin, and Paras. In terms of utility, Near could still use a more refined product suite, but isn’t that the purpose of Aurora? Assuming the market doesn’t crash, I expect NEAR to perform well in Q3 2022. While I currently have no position, I would be happy to re-enter bullish once it’s clear that NEAR has shaken off its toxic and demonic price behavior.

Rekt "Blue Chips"

If you know me, you know I love DeFi. No other area in the crypto space compares to the level of innovation and entertainment that DeFi brings me daily. The tricky part of loving DeFi is that the performance of tokens doesn’t really execute as you would like. Essentially, DeFi has been in a bear market since its inception. Of course, individual tokens can rise on their own, whether it’s CRV, SUSHI, OHM, or any other hot token this month, but when it comes to the industry, you’re better off putting your money elsewhere.

But hear me out.

I discussed the possibility of a DeFi revival in my last two articles and cited a tweet from @divdotvc as a glimmer of hope, trying to resurrect my dead positions. The fact is, this won’t happen for a while, but when it does, the upward momentum will hit the market hard.

Think about it.

If you are a well-known institution managing a large amount of capital, where would you look to store that cryptocurrency? Would it be GameFi or Metaverse coins? Probably not. Would it be "blue chips" like Yearn, Aave, or Curve? That’s more likely. I could go on and on about this, but the fact is we have a long way to go before that point. Until then, the tokens of new DeFi protocols will always dominate, as we continue to iterate towards the inevitable "DeFi season" and cash out on countless Olympus forks with 12 worthless positions.

If you want to capitalize on these oversold tokens, I will be closely watching the developments of Tribe Turbo, Alchemix V2, and OlympusDAO’s new range stabilization mechanism. These tokens are likely to not rebound and break out of their poor downtrends, but if the crypto community is good at one thing, it’s definitely going higher. So before Blackrock beats you to it, find the next Apple or Microsoft product on-chain.

P2E and M2E

While I do not hold tokens from either of these platforms, it would be a lie to say there are no opportunities among them. We all saw the rapid rise of GMT (Stepn), which reached around $3.6 just a few days ago. The scale of M2E could be massive, especially considering how many people have entered the fitness space worldwide in recent years. While I don’t think tokenized walking apps are sustainable, what do I know?

Many call it P2E, but I think it’s better to describe this industry as GameFi. Video games are fun. People of all ages from around the world play video games every day, representing a wide variety of genres, systems, and communities. Who says we can’t apply Ponzi economics to gaming? I believe we will see NFTs and cryptocurrencies integrated into traditional structures before we see the first successful crypto-native GameFi application. Unless something very cool and genuinely interesting comes along, I’ll stick to my guns.

One of the more interesting aspects of GameFi for me is implementing DeFi tokenomics into games. This could be a very cool way to capture two massive communities and bring them into the crypto world, while also being an interesting thought exercise. If you want to learn more about GameFi, I recommend @chng_raymond.

Rooftop Collective

Traders fighting for financial freedom, awe-inspiring.

My good friend @brentsketit pressured me to add a section on Rooftop. If you don’t know who Rooftop is, you might want to skip this part.

All jokes aside, Rooftop is a relatively "elite" trading group in CT, with members including @saliencexbt, @Sathematical, @AwawatTrades, and @badquant1. While they are all better traders than I am, perhaps this could help me get accepted. Until then, I’m shouting at them from below with a megaphone.

It’s well-known that Rooftop hates trade frontrunners. Rooftop also despises NEAR’s price action, making us direct allies. The clever wolf @HsakaTrades even stated that he would no longer view this collective as magical internet currency traders - you don’t mess with the boys on Rooftop.

I still don’t know what they are doing.

Options

Where do I even start talking about on-chain options? We all know how much retail investors love these leveraged financial products, and I can’t wait for the day we can play with them on-chain, fully capable of losing all our funds (and then some). Protocols like Dopex, Opyn, Zeta, and Opium are among the leaders, but as I mentioned in the TLDR (if you read it, I know I said to skip it), I still believe the timing for disruption in this industry is ripe. Many know that DeFi’s TVL is around $200 billion, but the TVL of on-chain derivatives protocols is only 0.5% of that. These numbers are worlds apart compared to TradFi derivatives.

The natural evolution of any market is to evolve into a behemoth of rampant institutional speculation, and I believe cryptocurrency is heading in that direction. Structured products are a good start, but if we want to introduce large products, we need a liquidity options market with optimal pricing.

But I think the current options vaults are sufficient for now.

NFT + DeFi

Don’t even get me started on the potential of protocols like Sudoswap and JPEG'd. While most people hate NFTs, which is a harsh reality, you cannot deny the future possibility that NFTs will be as ubiquitous as online payments for coffee. Sure, the apes are ugly. Sure, the punks are old. But who cares about these projects? Considering how many blatant cash grabs, rug pulls, and low-quality 10k generated PFP collections are released daily, it’s impossible to keep track of every new NFT project released. Does Fiverr have stocks? You might want to look into that instead of listening to anything I’ve mentioned so far.

The combination of DeFi and NFTs has been accelerating, with the upcoming issuance of JPEG bonds through Olympus and Sudoswap (coming soon). I think NFTs have a bad reputation in many people’s mouths, but I think they are cool. Would you rather lose money on a token with no utility or lose money on a pretty picture? I know what I would choose nine times out of ten.

Just as DeFi will integrate with GameFi, the same will happen with NFTs. Beyond the intersection of NFTs and DeFi, there are a plethora of new projects like Flip Metrics, LooksRare, and Gem that consistently provide what this space needs. What am I asking right now? I’m glad you asked.

When will the tokens be issued?

The Eternal Showdown

We all love contract trading. On-chain options are still a year or two away from complete efficiency and optimization, so contracts are where cryptocurrency can truly relax and lose money. Whether you’re using 5x leverage or 50x leverage, there’s nothing better than betting your entire net worth on some perpetual swaps. In terms of decentralized contract platforms, here are some outstanding ones: GMX, dYdX, Drift, and Rage Trade. Yes, I may have missed many, but don’t blame me. There are too many protocols creating contracts, and I’d rather stick to what I know. Some recent developments include GMX’s X4 plan, Drift’s continued dominance on Solana, and dYdX’s 100% decentralized plan (whatever that means). I also like Rage Trade because it’s overlooked, so there’s no commitment.

Network Spirituality

If you don’t know what Milady is by now, you must be living under a rock. In the eyes of some, this is one of the more "outrageous" NFT projects, partly due to the unique art style of these Milady. FloorDAO, "a decentralized NFT market-making protocol," recently held a competition for users to vote on which NFT project the DAO would bid on. Naturally, Miladys won.

After briefly soaring to a low price of 2 ETH, Miladys have returned to floor price, for better or worse. Personally, I wouldn’t sell my Milady for less than 50 ETH. I not only love the art, but the Milady community is one of the most unique and engaging niches on Crypto Twitter. If you don’t understand now, you may never.

L2 Tokens

I have written about L2 in the past, and while not much has changed, we have been fortunate to receive amazing news about the "next chapter" of Optimism. I believe everyone can guess what this means. I didn’t expect it to happen so soon, although it has been almost a year since L2 airdrop rumors first appeared on my TL. Faced with the almost imminent token from one of the more well-known L2s, we are confronted with an urgent question: who will release their token next?

Just as we saw Sushiswap create a very interesting vampire attack dynamic against Uniswap in the summer of 2020, I, along with everyone else, believe the same thing will happen. Imagine a scenario where Optimism releases a token, the ecosystem explodes, people make a lot of money, TVL increases, and developers are happy. Why wouldn’t other L2s seize this opportunity? By issuing tokens and stealing users from other L2s, this would trigger a vampire war, which I am very much looking forward to.

If I had to guess, I would say Arbitrum is next, followed closely by zkSync and Starkware. However, when I say Arbitrum will follow in Optimism’s footsteps, I am biased because I might receive a larger airdrop from them than from Optimism. For more information on the potential "L2 season," check out the clever @Crypto_McKenna on this topic.

Structured Products

In terms of on-chain derivatives, structured products are currently king. AMMs, liquidity pools, and ridiculous levels of composability have opened the door for structured products to enter the crypto market, and it will only get better. These protocols are relatively outstanding: Pendle, Primitive, Ribbon, and Element.

Whether it’s options vaults, principal-protected notes, yield-enhancing products, or cooler things like interest rate leveraged longs or shorts, everyone can find something that suits them. I hope to see more capital flow into structured products, as these products are often more sustainable than traditional LPs, and while they are volatile, they can provide stable returns under the right conditions.

Let’s keep pushing forward.

Summary

If this has taught you anything, I hope it serves as a wake-up call to get out there and read more. The market will continue to be the market; it’s not going anywhere. If you want to take a break, go out and start making a Twitter list of high-quality accounts to help better understand yourself. The goal of cryptocurrency is never to be left behind by old, rotten bags. If you don’t stay diligent and strive to improve continuously, you will fall behind.