OKX Ventures Investment Quarterly Report: Multi-field Layout, Supporting Industry Development

Author: OKX Ventures

With the milestone event of the U.S. SEC approving the BTC spot ETF in January 2024, the crypto industry is gradually emerging from the winter and entering a boom. We saw the total market capitalization of crypto reach $2.6 trillion in the first quarter of 2024, with the total supply of stablecoins exceeding $150 billion, and Bitcoin's market cap at one point surpassing that of silver. New narratives such as re-staking, the combination of Web3 and AI, and the programmability of Bitcoin have emerged and performed strongly, promoting further innovation and development in the crypto market.

As the capital market gradually warms up, the total financing scale for the quarter exceeded $1.8 billion, a 50% increase from the previous quarter. During this period, OKX Ventures continued to increase its investment, deeply participating and continuously exploring high-potential, innovative projects and teams in the crypto industry, actively investing in and empowering entrepreneurs, providing comprehensive support, and contributing to the advancement of the crypto industry.

Key Project Review of the Quarter

In the first quarter of 2024, OKX Ventures' investments covered multiple sectors including infrastructure, the Bitcoin ecosystem, AI + Depin, Gamefi, Defi, and Socialfi, with infrastructure projects accounting for 60% of the total investment. We believe that the completeness of infrastructure remains a cornerstone driving the development of the entire industry. A robust infrastructure can effectively enhance the efficiency and security of the entire industry, providing a solid foundation for rapid development.

1. Infra

Infrastructure is of utmost importance for industry development, including but not limited to L1/L2 public chains, development platforms, and wallets. These underlying products determine the speed of development for upper-layer applications, which is why blockchain infrastructure has always been a key focus for crypto investment institutions. Recently, with the explosive growth of the Bitcoin ecosystem and the emergence of Ethereum's Dencun upgrade, OKX Ventures has also made significant investments to promote the continuous improvement and upgrading of infrastructure.

• AltLayer is a highly scalable application-specific execution layer system built on Optimistic Rollups. It can connect with Ethereum, Solana, Polkadot, Cosmos, and even Layer 1 and Layer 2 solutions like Arbitrum and Optimism for scaling. To better serve developers, AltLayer created Rollups-as-a-Service (RaaS), a multifunctional, no-code custom Rollup creation platform. Additionally, AltLayer introduced the concept of instant Rollups, a highly optimized Rollup technology that allows dApp developers to quickly deploy specific Rollups while providing security through Layer 1 and easily settle when needed.
• Cysic is a zero-knowledge (ZK) hardware company aiming to provide efficient hardware acceleration solutions for ZK proof protocols to help reduce ZK proof generation time and power consumption. The Cysic team has developed FPGA and GPU low-level code libraries for multi-scalar multiplication (MSM), number-theoretic transforms (NTT), and Merkle hash computations, which are important components in ZK protocols, and is also developing ASIC solutions. Running computations like MSM on CPUs can be very power-hungry and time-consuming, which is why Cysic focuses on trying to accelerate these components using FPGAs, GPUs, and ASICs.
• DEXTools is the world's leading DEFI portfolio and cryptocurrency price tracking application. For enthusiasts and traders in the crypto world, DEXTools helps them stay updated with real-time cryptocurrency prices, price alerts, whale movements, blockchain statistics, and DEFI market trends. DEXTools averages 20 million users per month, serving as an important hub between users and Defi.
• Eclipse is an Ethereum Layer 2 solution supported by the Solana Virtual Machine (SVM) to enhance blockchain scalability and efficiency. It integrates Ethereum's secure settlement with SVM's high-performance execution, Celestia's data availability, and RISC Zero's zero-knowledge proofs, aiming for high throughput without sacrificing security.
• Lumoz is a decentralized ZK-RaaS network and a PoW network supporting ZKP mining. It employs a mechanism that combines PoS and PoW. Lumoz aims to simplify the use of ZK-Rollups and promote their widespread adoption, facilitating large-scale deployment of zkEVM-based application chains. Developers can deploy their ZK-Rollups (zkEVM) across multiple chains through Lumoz. For miners, Lumoz is a multi-chain PoW protocol that supports mining across various public chains and generating zero-knowledge proofs for ZK-Rollups.
• Taiko is a decentralized ZK-EVM and general ZK-Rollup. Its goal is to allow developers and users of dApps developed for Ethereum L1 to use Taiko without any changes. Through Taiko, developers can more easily deploy dApps to L2 while inheriting Ethereum's security and incurring lower transaction fees than L1. Taiko consists of three parts: zkEVM for generating proofs, L2 rollup nodes for management, and the Taiko Protocol for rollup validation.
• ZeroGravity (0G) is the first data availability system with a built-in universal storage layer, featuring strong scalability and decentralization. It achieves scalability by dividing the data availability workflow into data publishing channels and data storage channels. Its products include the data availability layer: 0G DA and the data storage layer: 0G Storage.
• zkMe is a zk Identity Oracle that provides anonymous user verification on-chain to enhance security and privacy. zkMe verifies user credentials without revealing any personal information to anyone. When a user (credential holder) creates a DID using zkMe, they receive a unique SBT, which is cryptographically bound to their public key and serves as identification, enabling users to verify their identity without disclosing any sensitive information through ZKP.

As the most important sector in crypto infrastructure, OKX Ventures has placed bets on popular projects like AltLayer and Taiko. The development of the DA layer supports projects like ZeroGravity. In other infrastructure aspects, we have also engaged in close cooperation with leading crypto price tracking applications like DEXTools.

2. Bitcoin Ecosystem

It can be said that the Bitcoin ecosystem is the starting point of this bull market. From the end of 2023 to the beginning of 2024, various protocols, infrastructures, token standards, cross-chain bridges, Rollups, and other innovative solutions have continuously emerged, activating the prosperous development of the Bitcoin ecosystem. OKX Ventures has also closely followed this trend, achieving significant progress in terms of funding, cooperation, and resource integration.

• Babylon is a Bitcoin staking protocol that allows Bitcoin holders to stake their idle Bitcoin to enhance the security of PoS (Proof-of-Stake) chains while earning rewards in the process. It is a PoS Cosmos zone blockchain that utilizes extractable one-time signature (EOTS) technology to introduce a PoS staking mechanism for Bitcoin without cross-chain or forks, using Bitcoin PoW as a timestamp and data availability layer to provide native security based on BTC.
• B² Network is an EVM-compatible Bitcoin Layer 2 network developed on ZK-Rollup, enabling EVM ecosystem developers to seamlessly deploy Dapps. B² anchors the zk-rollup's data Merkle tree root hash and proof on the Bitcoin network through tapscript, placing both the process and results on-chain for easy verification, achieving higher authenticity and availability for BTC layer 2.
• Merlin Chain, developed by the Bitmap Tech team, is a Layer 2 based on the BTC network and utilizing ZK-Rollup. By leveraging ZK technology, it compresses transactions and uploads the compressed transaction data and ZK proofs to Bitcoin L1's Taproot through a decentralized Oracle network for the entire network's use, ensuring transparency and security.
• UniSat Wallet is a leading BTC and inscription wallet that supports services such as inscribing BTC assets like BRC20 and trading, and serves as one of the indexing service providers, offering infrastructure services for assets like BRC20 in the crypto industry. Unisat continues to deepen its involvement in the BTC ecosystem, such as recently proposing to add the ability to mint and burn BRC20 autonomously to support the issuance of stablecoins on BRC20, and plans to launch the Bitcoin expansion solution Fractal.
• bitSmiley is the first native stablecoin project in the BTC ecosystem, established as a comprehensive financial protocol on the Bitcoin blockchain, as part of the Fintegra framework. Its core product, BitUSD, is an over-collateralized stablecoin based on BTC. Users can collateralize BTC to the BitSmiley DAO and mint BitUSD. Unlike Maker DAO, bitSmiley auctions the platform's future revenue as debt and repays creditors first. Additionally, BitUSD adopts a new bitRC20 inscription format compatible with BRC-20.
• Bounce Finance is a multi-chain decentralized auction protocol. Focusing on auction-as-a-service, it offers various auction products, including token and NFT auctions, real-world collectible auctions, advertising space auctions, as well as SDKs and plugins. Furthermore, Bounce Finance provides Private Launchpad services, an on-chain solution aimed at simplifying new project IDOs. Currently, Bounce Finance is focusing on the BTC ecosystem, concentrating on providing incubation and auction support.
• Link offers a range of applications through discreet log contracts (DLC), allowing application developers to easily integrate native Bitcoin. The platform locks Bitcoin on-chain, from where it can be utilized by Ethereum and other smart contract blockchains. This "trustless bridge" enables lending, trading, derivatives, and more. Meanwhile, the non-custodial wrapping of dlcBTC allows users to manage Bitcoin themselves without worrying about third-party risks, such as poor asset management or theft.

It is evident that OKX Ventures has made extensive investments in the Bitcoin ecosystem over the past few months, from the L2 technical infrastructure Bitmap to the DeFi protocol Bounce Finance, and to the inscription wallet Unisat. Through a comprehensive layout in the Bitcoin ecosystem, we have provided strong support for the development of the entire ecosystem and the crypto industry. At the same time, we are also actively engaging in collaborations related to the Bitcoin ecosystem, such as with Babylon, encouraging more participants to join and promoting the accelerated development of the industry.

3. Gamefi

In the second half of 2023, Gamefi began to regain its vitality with the development of major trends. Full-chain games, card games, and Web3 game-related marketplaces and infrastructures have received widespread attention from the capital market. During this period, OKX Ventures has also made early investments, making it one of our investment focuses.

• io is a Web3 identity company & game aggregation platform that has developed a solution to create a unique user web3 ID by combining web2 and web3 data. On this basis, Carv has established a series of on-chain data infrastructure for games, with the mission of building a player-owned game identity and realizing data monetization through game data sharing. Its main products include: the CARV Protocol underlying data solution and its first Dapp on the Protocol, CARV Play, which provides basic functions such as game issuance, game activities, and on-chain events.
• Mocaverse Platform is a decentralized version of an app store for web3 games & entertainment, integrating over 450 portfolios from Animoca Brands. Users can apply for a Moca ID, which will become their Web3 login (similar to Apple ID), allowing users to interact with Dapps on the platform.
• Lumiterra is a multiplayer open-world survival game where players can freely choose to cultivate combat skills, farming skills, or gathering skills. No longer limited to traditional professions, players can create unique characters based on their interests. At the same time, the Sodium wallet built by Lumiterra adopts ERC-4337, ZK, and MPC technologies, enabling users to easily log in and manage assets with high security.
• BLOCKLORDS is a 3A SLG multiplayer strategy game (MMO) launched by the game studio MetaKing Studios, based on a multi-chain network. Players can take on different medieval roles, managing their farms, recruiting teams, collecting resources, and assigning heroes to teams, upgrading buildings, and creating their own unique epic in a medieval universe.
• L3E7 is a pure 3D location-based service (LBS) game. Through map graphic rendering technology, it immerses players in a 3D metaverse world. The L3E7 metaverse is created based on cities in the real world, allowing players to experience what the real world looks like, presented through a cyberpunk art style.

It can be seen that OKX Ventures supports various aspects of Gamefi, from game identity solutions like Carv to large 3D games like L3E7, providing comprehensive support from infrastructure to upper-layer applications. At the same time, we are also actively conducting related collaborations, such as with Mocaverse, to engage more users through events and promote the vigorous development of the Gamefi field. In the future, the combination of game projects and DeFi projects will continue to improve, creating more attractive games and more sustainable business models.

4. Defi

DEFI is an important innovation in the crypto market, providing financial services to a broad user base in a decentralized manner through smart contracts. OKX Ventures has observed that since Defi Summer, projects in this field have been continuously innovating, offering various high-potential use cases for Web3 users, especially with the liquidity staking boom since Ethereum transitioned to PoS chains, providing Web3 users with options that yield returns and increase asset utilization, as well as the re-staking that derives from this, which brings both returns to users and security to projects. Both have become the two most focused directions in the Defi field, stimulating continuous project innovation and ecosystem improvement.

• Navi is one of the top DEFI protocols on the SUI ecosystem with the highest TVL, currently around $500 million. Navi provides lending services for long-tail on-chain assets while collaborating with multiple protocols such as HeroSwap, Ondo Finance, and Cetus to unlock and improve various Defi use cases. Additionally, by acquiring the LSD protocol Volo, it offers users a fully decentralized liquidity staking service and further builds a one-stop Defi platform.
• fi offers a completely decentralized liquidity staking service, with staked tokens rapidly growing since the beginning of 2024, currently exceeding $2.9 billion in total value. Ether.fi allows stakers to maintain control over their keys while staking ETH to Etherfi, which is naturally placed into EigenLayer for re-staking, thus providing users with multiple rewards including staking, re-staking, and platform rewards while ensuring a higher degree of decentralization, promoting rapid growth of the protocol.
• Renzo is also a leading project focused on the new liquidity staking field, allowing users to stake native Ethereum for liquidity staking and re-staking rewards, while also supporting the use of more LSD tokens for re-staking. Currently, Renzo has over $500 million in assets staked on its platform.

OKX Ventures focuses on innovation and high-potential projects in the DEFI field and is optimistic about the vitality that emerging narratives can bring to the DEFI sector, helping projects provide comprehensive and high-quality products and services for Web3 users.

5. AI

We have seen the explosive growth of the AI sector, with the crypto industry exploring integration with AI. Both Web3 and AI are rapidly developing, and new points of integration are continuously emerging. OKX Ventures is focused on projects and teams that can bring innovation to the crypto field during this process, capable of creating potential application scenarios and opportunities.

• net is a decentralized GPU network based on Solana, aiming to build a distributed computing power network by aggregating idle GPU resources from around the world, providing low-cost and efficient computing resources for artificial intelligence (AI) and machine learning (ML). It offers a user-friendly UI interface and integrates platforms and data management programs and architectures to provide a higher-performance and more complete computing power platform.
• Myshell focuses on building an interactive AI robot creation platform that can generate an AI that interacts with users based on the information input by users, adding voice templates to shape an AI with unique "personality," interaction methods, and voice based on user settings. In addition to chatting with users, it can also cover use cases such as translation and text generation.
• 0xScope aims to build an open data layer for Web3 data analysis and provides a range of tools and services to help users understand and utilize Web3 data. Through a clear and direct interface, it can generate data analysis reports for the Web3 industry or conduct comprehensive on-chain behavior analysis for specific addresses, similar to ChatGPT.
• FLock is an AI co-creation platform that builds a decentralized platform to incentivize users to contribute computing power, AI models, and private data, promoting the generation of community-driven AI models. Through collaboration among various parties, it fosters AI innovation.
• Meson Network aims to build a decentralized bandwidth network, using user-friendly nodes to gather loans contributed by users worldwide and redistribute them, linking both ends of supply to form a sustainable economic cycle. Meson Network has currently attracted over 250,000 nodes globally, supporting bandwidth needs around the world.

AI and Web3 can mutually enhance each other in many ways. From empowering Web3's infrastructure with AI to using AI to support Web3's application platforms, we are optimistic about the ability of quality teams to promote better integration of the two. OKX Ventures believes that as the two fields of Web3 and AI continue to develop and merge, the points of integration will become more refined, which will also stimulate further development in both Web3 and AI.

Conclusion:

OKX Ventures believes that with the innovative breakthroughs in the Bitcoin ecosystem, the acceleration of L2, the transition of quality game content from testing to official release, and the continuous micro-innovations in Defi alongside infrastructure development, 2024 will be a year full of expectations. At the same time, OKX Ventures looks forward to actively collaborating with quality project parties, providing deep support, offering quality services to users, and contributing to the industry.