Detailed Explanation of the Encrypted Header Structure: Paradigm's Latest Focus on the Top Ten Areas

Author: defioasis, Wu Says Real

Note: This article is for information sharing only and does not endorse the projects mentioned, nor does it have any financial interest in them.

Recently, Paradigm released a call for heroes, hoping to collaborate with outstanding teams and talents in the crypto space to solve important business and research problems. Paradigm was founded in 2018 and raised $2.5 billion in venture capital in November 2021. As a research-oriented technology investment firm, Paradigm has contributed many excellent projects to the industry, with investments in Uniswap, Lido, Blur, and others becoming pillars in their respective fields.

In the latest call for heroes, Paradigm stated that its important areas of exploration include: "intention"-centered protocols and infrastructure, Hooks built on Uniswap v4 (especially focusing on LP profitability and loss and rebalancing), infrastructure for a Rollup-centered multi-chain world, shared sequencers, on-chain gaming, crypto-native social applications, prediction markets (creating real liquidity markets), stablecoin payments/fintech, on-chain government bonds, and ZKP apps.

This article will review the projects in Paradigm's focus areas from multiple dimensions, including project progress, financing, on-chain data, and social attention.

Intention-Centered Protocols and Infrastructure

In the past, developers designed protocols that met certain specifications or standards, with clear regulations on functionality, performance, and security, but often overlooked the actual needs and intentions of end users. Intention-centered design starts from the user's perspective, guiding the design of protocols and infrastructure that provide a better user experience and match user needs based on their goals or intentions.

Anoma

Anoma may be the first protocol in history explicitly designed around the concept of "intention" as its core architecture. With intention at its core, Anoma introduces new primitives (the basic components or operations that make up a system or program), allowing existing Web 2.5 dAPPs to achieve complete decentralization, such as Optimism and ZK rollups, DEXs, NFT marketplaces, or Gitcoin and other public goods platforms. Additionally, Anoma's architecture was designed from the outset for applications involving infinite users and an infinite number of intentions, making it easier to build new applications that may be tricky, limited, or impossible to construct on existing protocol architectures. These new applications include real-time Rollups, multi-party and multi-asset swaps, second-price sealed auctions, privacy-preserving DAOs, and gaming B economic systems, such as multiple currencies, collaborative finance, and heterotopias.

The Anoma Foundation completed a third round of financing led by CMCC Global in May this year, with participants including Delphi Digital and Electric Capital. The Anoma Foundation previously completed two rounds of financing led by Polychain Capital in 2020 and 2021, with participants including Coinbase Ventures. Currently, Anoma has raised a total of $25 million across three rounds.

Conduit

Conduit is an infrastructure platform aimed at enhancing and accelerating the capabilities of crypto developers, with its first product allowing startup teams to launch product-grade Rollups built on the OP Stack in a short time. Rollups focused on specific apps on Conduit are initiated, maintained, and expanded by infrastructure architecture experts, allowing startup teams to focus on building products that users love. Conduit deployments come with a built-in block explorer, auto-scaling RPC, address tagging, and a transaction tracker developed by Paradigm researcher Sam Szun, meaning deployments will run the same technology as the Optimism mainnet and are protected by Ethereum.

Conduit completed a $7 million seed round financing led by Paradigm in March this year, with participants including Flashbots product lead Robert Miller and former OpenAI designer Ludwig Pettersson.

Hooks Built on Uniswap v4

The Hooks feature is one of the important updates in Uniswap v4, enabling customizable liquidity pools.

Panoptic

Panoptic is a permanent, oracle-free options protocol built on the Ethereum chain, constructing options on top of Uniswap v3 liquidity pools. Providing liquidity to the Uniswap v3 pool is akin to shorting options, and reversing liquidity positions creates theoretical long option gains; however, since each Uniswap position is unique and non-fungible, implementing a structure for borrowing from LP positions is not feasible. Panoptic leverages the moving liquidity among ecosystem participants while charging commissions to facilitate trades, thereby creating option-like yields. That is, if a token owns a Uniswap v3 pool, Panoptic can create an options market on that token pair using this method. Since Panoptic's options are built on LP tokens, pricing is path-dependent and does not rely on oracle-based Black-Scholes models, thus completely avoiding the need for oracles. After the announcement of Uniswap v4, Panoptic also emphasized that Uniswap v4 will be an important part of its roadmap.

Panoptic announced a $4.5 million financing round led by Gumi Cryptos Capital in December 2022, with participants including Uniswap Labs Ventures and Coinbase Ventures.

Arrakis Finance

Arrakis Finance is a trustless market-making infrastructure protocol that operates algorithmic strategies on Uniswap v3. LPs can manage liquidity using Arrakis's Trustless Vaults, Managed Vaults, and Self Managed Vaults; professional market makers can provide management of other LPs' liquidity in exchange for a share of commission income. Currently, Arrakis Finance has a TVL of nearly $190 million. On July 21, Arrakis held a brainstorming marathon with Uniswap Foundation on building and thinking about v4 hooks.

Arrakis Finance raised $4.5 million in a seed round in December 2022 through a SAFT (Simple Agreement for Future Tokens), with participants including Uniswap Labs Ventures and Polygon Ventures.

Infrastructure for a Rollup-Centered Multi-Chain World

Blockchain infrastructure supporting Rollup scaling technology and multi-chain interactions.

Connext Network

Connext Network is a modular protocol for securely transferring funds and data between chains. Developers can use Connext to build cross-chain applications (xAPPs) that can interact with multiple domains (blockchains/Rollups). Connext considers three core design principles: modularity, security, and simplification. Connext Network core contributor Arjun has stated that the best way to reduce hacking is to leverage existing, battle-tested infrastructure as much as possible while promoting a Rollup-centered future; Connext utilizes existing Rollup Bridges as message verification tracks to achieve this.

Connext completed a $7.5 million financing round at a $250 million valuation in June this year, with a historical cumulative financing amount of $23.5 million, and participants including Coinbase Ventures, IOSG, Polygon Ventures, and Fenbushi Capital.

AltLayer

AltLayer is a decentralized and elastic Rollup-as-a-Service (RaaS) protocol. AltLayer adopts a modular design across the stack, allowing end users to choose Rollups based on their needs: preferred runtimes, such as EVM, WASM, etc., data availability layers, such as underlying L1, Celestia, etc., and settlement layers, such as Ethereum, Arbitrum One, etc. In addition to modularity, AltLayer's core features also include elasticity that scales with applications, multi-VM support, fraud proofs, decentralized sequencers, layered finality, and no-code Rollup launches.

AltLayer completed a $7.2 million seed round in July 2022, co-led by Polychain Capital, Jump Crypto, and Breyer Capital, with participants including Ethereum co-founder and Polkadot founder Gavin Wood and Circle co-founder Sean Neville.

Shared Sequencers

Sequencers are crucial for some Rollup scaling solutions. The sequencer's responsibility is to collect user transactions and sort them in a predictable manner. The order of sorting will determine the processing order of transactions on-chain, thus affecting the execution and validation of transactions.

Radius

Radius is a trustless shared sequencer designed to eliminate harmful MEV and censorship while creating economic value for Rollups. Based on a ZK cryptographic scheme, Radius implements an encrypted memory pool created by practical verifiable delay encryption (PVDE). Through PVDE, trustless transaction sorting can be ensured, preventing centralized sequencers from front-running, sandwiching, or censoring user transactions.

Radius completed a $1.7 million seed pre-round financing led by Hashed in June this year, with participants including Crypto.com.

Astria

Astria's shared sequencer is a middleware blockchain with its own decentralized sequencer set that can accept transactions from multiple Rollups. These transactions are sorted into a single block and written to the underlying layer without execution. Rollups can immediately retrieve from Astria after block creation.

Astria completed a $5.5 million seed round led by Maven 11 in April this year, with participants including 1kx, Delphi Ventures, and Figment Capital.

On-Chain Gaming

Games that run entirely on the blockchain.

Realms: Eternum

Eternum is a fully on-chain open-source strategy game running on StarkNet, with state changes recorded on Ethereum. It is a game of management and conquest, where players must build and defend their realms to thrive. The game is governed by a set of rules enforced by smart contracts, but these rules can also be changed through community voting.

Realms completed a community private placement in February this year, oversubscribed by 6.35 times, raising $625,000.

Parallel: Colony

Parallel Colony is an AI-driven simulation strategy game where all simulation projects run on-chain. Virtual avatars will be deployed in mining colonies to explore. Each virtual avatar in the game is an ERC-6551 wallet, meaning avatars can own their own digital assets (ERC-20 and ERC-1155) and trade with other AI avatars. Additionally, not only can users command avatars, but the game also allows AI avatars to act based on their own decisions or requests from other AIs.

Parallel completed a $50 million financing round at a $500 million valuation in October 2021, with participants including Paradigm and YouTube co-founder Chad Hurley.

Crypto-Native Social Applications

Social applications designed and implemented with full consideration of blockchain and cryptocurrency characteristics.

Jambo

Jambo is building Web3 applications aimed at the African community to promote cryptocurrency education, banking, and entertainment, striving to become a one-stop shop for cryptocurrency, including games like Axie Infinity. It has launched Jambo Academy in collaboration with local partners and community leaders to provide crypto education to African users. Jambo Academy is a 10-week learning program with income and rewards.

Jambo completed a $30 million Series A financing round led by Paradigm in May 2022, with participants including ParaFi Capital, Pantera Capital, and Delphi Ventures. Seed round investors also include Tiger Global and Coinbase Ventures. Jambo is Paradigm's first investment project in Africa.

Lens Protocol

Lens is a Web3 community graph built on the Polygon chain and is one of the most well-known crypto-native social protocols. Lens aims to empower creators to own their connections with the community, forming a fully composable, user-owned community network. The Lens protocol is supported by NFTs, allowing for monetization while ensuring that users retain ownership of their content and social relationships.

Lens Protocol completed a $15 million financing round led by IDEO CoLab Ventures in June this year, with participants including Blockchain Capital and Uniswap CEO Hayden Adams.

Prediction Markets

Prediction markets are markets that aggregate public predictions on various matters, from weather conditions to election results. Notably, this sector has received little attention previously, and project development has been relatively limited, making it one of the most niche areas of Paradigm's focus.

Polymarket

Polymarket claims to be the largest decentralized crypto prediction market, covering predictions in politics, sports, crypto, culture, and economics. A user named Severe-Watch: 0x64…6f1f earned over $910,000 through predictions, making them the highest-earning user on the Polymarket platform; another user named Slava-Ukraini: 0x9d…1344 contributed the highest trading volume on the platform, exceeding $1 million, with profits of about $19,000. @richardchen39's data dashboard shows that Polymarket has around 1,000 monthly active users.

Polymarket completed a $4 million financing round led by Polychain Capital in October 2020, with participants including ParaFi and 1confirmation.

Zeitgeist

Zeitgeist is a prediction market built on Polkadot, supported by Web3 Foundation and ConsenSys alumni. Similar to Polymarket, it offers predictions covering politics, crypto, technology, science, news, sports, and esports, but differs in that Zeitgeist also provides some fun predictions within the Polkadot ecosystem, such as those related to Dotsama and the Zeitgeist platform itself. Additionally, the subjects used for predictions in Zeitgeist are more diverse and support DOT betting.

Zeitgeist completed a $14 million financing round in November 2021, with participants including Longhash Capital and Icon Plus Capital.

Stablecoin Payments/Fintech

FDUSD

FDUSD is a programmable dollar stablecoin issued by Hong Kong company FD121 Limited (First Digital Labs). The auditing agency for FDUSD is Prescient Assurance, and the contract audit is by PAI Shield, but the cooperating bank has not been disclosed; the reserve account for FDUSD is associated with a public trust company registered in Hong Kong and serves as the custodian. This custodian has deposited the dollars held on behalf of the company into different accounts at various institutions, including a Swiss financial institution and an affiliated Hong Kong trust company. FDUSD recently launched on Binance.

First Digital completed a $20 million financing round in May 2022, with participants including Nogle and Kenetic Capital. Currently, First Digital has completed a total of $25.15 million across three rounds.

Lightspark

Lightspark is a payment company based on the Bitcoin Lightning Network, created by former Facebook crypto chief David Marcus, building enterprise-level infrastructure. Bitcoin custodian bank Xapo Bank and the largest crypto asset platform in the Middle East and North Africa, Rain, have integrated into the Lightspark ecosystem through the Lightspark Wallet SDK. In April this year, Lightspark announced the launch of the first enterprise-level entry platform for the Lightning Network.

Lightspark completed undisclosed financing led by a16z and Paradigm in May 2022, with participants including Matrix Partners and Thrive Capital. The Block reported that this round raised $173 million at a valuation of $1 billion.

On-Chain Government Bonds

Bringing real assets, led by U.S. government bonds, on-chain. RWA is one of the hottest areas in crypto this year, with MakerDAO being the biggest beneficiary. Compared to some DeFi protocols, tokenized government bonds offer higher yields and lower risks.

Ondo Finance

Ondo Finance has the second-largest tokenized market share after Franklin Templeton. Currently, Ondo Finance has four RWA products, providing investors with a range of cash management products and bond funds, including short-term U.S. government bonds (OUSG) and an upcoming tokenized money market fund (OMMF), with OUSG's TVL reaching $160 million, offering a 5.13% APY.

Ondo Finance completed a $20 million Series A financing round led by Founders Fund and Pantera Capital in April 2022, with participants including Coinbase Ventures, Wintermute, and Tiger Global, and raised $10 million through a public sale on Coinlist in July of the same year.

Maple Finance

Maple Finance was originally an unsecured lending protocol on the Ethereum chain but was severely impacted by the collapse of major client Alameda. In April this year, Maple launched cash management pools for USDC and USDT, primarily catering to the conservative risk and daily liquidity needs of DAOs, offshore companies, and Web3 treasuries, supported by U.S. short-term treasury bills and reverse repurchase agreements. Currently, the Maple USDC and USDT cash management pools have approximately $21 million in deposits, offering 4.64% and 4.28% APY, respectively.

Maple Finance completed a $1.4 million financing round led by Framework Ventures and Polychain Capital in March 2021 and raised $10.33 million through an IDO in May of the same year. In December last year, due to the spillover effects of the FTX collapse, crypto fund Orthogonal Trading defaulted on a $36 million loan from Maple Finance, accounting for 30% of active loans; Maple Finance expects to recover at least $2.5 million to mitigate losses.

ZKP Apps

Applications using zero-knowledge proofs. Zero-knowledge proofs allow one party (the prover) to prove to another party (the verifier) that they know a secret value without revealing the value or providing any additional information about it.

Ulvetanna

Ulvetanna provides fast, cost-effective, and straightforward zero-knowledge proof computation, operating FPGA clusters tailored for large-scale ZKP computations, aimed at supporting L1 and L2 blockchain protocols. Ulvetanna has assembled a multidisciplinary team covering applied cryptographers, software and hardware engineers, data center and cloud architects, and crypto-native investors, working together to design the hardware and software stack from cryptographic algorithms to data center topologies.

Ulvetanna completed a $15 million seed round co-led by Bain Capital Crypto and Paradigm in December 2022, with participants including Jump Crypto.

Dark Forest

Dark Forest is the first MMORTS fully on-chain game built using zk-SNARKs on Gnosis Chain and Ethereum, launched by Argus Labs. Dark Forest has been active since the first beta released on the Ethereum Ropsten testnet in August 2020, making it the most popular and active application of ZKP in the gaming field.

Dark Forest developer Argus Labs completed a $10 million seed round led by Haun Ventures in June this year, with participants including Alchemy and Robot Ventures.

Reference Links:

https://www.paradigm.xyz/2023/07/collaborate-with-paradigm

https://blog.anoma.net/the-anoma-foundation-announces-the-3rd-fundraise-for-anoma/

https://conduit.xyz/blog/introducing-conduit

https://blog.panoptic.xyz/panoptic-483c6de77a0e

https://blog.astria.org/introducing-astria/