OKX Ventures May-June 2024 Investment Bi-Monthly Report: Steady Improvement Across Multiple Sectors, Maintaining Optimism for Market Outlook

Author: OKX Ventures

The U.S. economy continues to show resilience, but the high interest rate environment continues to impact the economy, with many countries and regions facing signs of economic stagnation or mild recession. Although inflation shows signs of cooling according to the Federal Reserve's plans, the uncertain macroeconomic environment has further exacerbated volatility in the cryptocurrency market.

However, the Ethereum spot ETF, on-chain data, native application innovations across major public chain ecosystems, and innovations in the TON ecosystem are all providing sustained growth momentum for the industry, and OKX Ventures remains optimistic about the market outlook.

Continuous Efforts Across Multiple Fields

According to observations and research by OKX Ventures, the current cryptocurrency industry is showing a "stable and improving" development trend across multiple fields.

On the policy front, the industry has finally welcomed significant progress with the Ethereum ETF, as the U.S. Securities and Exchange Commission (SEC) approved all 19b-4 filings on May 23. If the Ethereum spot ETF begins trading in July 2024, considering that the asset management scale of Bitcoin ETFs has reached $50 billion, the scale and buying volume of the ETH spot ETF will likely be in the tens of billions of dollars.

On-chain data shows slight declines but stability, with Meme assets becoming a hot topic. In May and June, the on-chain transaction volumes for Ethereum and Bitcoin were $390 billion and $338 billion, respectively, still in a downward trend compared to March and April. The supply of stablecoins has increased to $142.6 billion, with Ethereum burning 26.7k and 26.3k tokens in May and June, and Ethereum Gas fees hitting a low of 1 gwei. Meme-type assets maintained high popularity in May and June, with a total market capitalization exceeding $60 billion at one point, especially on the Solana chain, where Meme trading volume accounted for over 50% of total trading volume. On-chain data indicates that the industry has reached a temporary bottom, and we remain optimistic about on-chain innovations in the second half of the year.

The industry infrastructure is improving, and ecological projects are becoming more diverse. The number of Bitcoin ecosystem Layer 2 solutions and total TVL is growing, driving the modular development of the Bitcoin ecosystem, such as Nubit inheriting Bitcoin's security as a DA, and Solv aggregating liquidity yield. OKX Ventures believes that a rich native infrastructure will be an important focus for the market in the near future, including various AI, GameFi, and social ecosystem applications.

The TON ecosystem continues to grow, with applications and data surging. Backed by Telegram's 900 million active users, TON's TVL has rapidly surpassed $700 million, with multiple applications having over ten million users. This presents a new entry point for further mass adoption in the industry, and OKX Ventures will continue to support innovative TON applications.

The security field remains a long-term focus, with on-chain security incidents resulting in losses of $688 million in Q2 2024, a 37% increase compared to Q1. DeFi and public chains are the main targets of hacker attacks, and there is still much work to be done on the C-end user side regarding on-chain security, with security tools like GoPlus still having a long way to go.

Latest Investment Trends from OKX Ventures

As a long-term value investor in the industry, OKX Ventures continues to seek and invest in innovative projects across multiple tracks, injecting more vitality from funding, technology, and ecological aspects.

Bedrock

According to the project's official website, Bedrock is the first protocol to support multi-asset liquidity re-collateralization, collaborating with RockX, which has long been engaged in blockchain infrastructure development, to provide a non-custodial solution that ensures the security of user assets. Bedrock supports staking and re-staking of various assets, such as uniBTC, uniETH, and uniIOTX, in collaboration with the Babylon, EigenLayer, and IoTeX blockchains, enhancing the security and yield of staked assets through these partnerships.

Among them, uniBTC is a re-staking protocol supported by the Babylon chain, accepting wrapped BTC tokens (such as wBTC), allowing BTC token holders to enjoy the security of the Ethereum network while earning yields from staking BTC tokens. uniETH is designed for local re-staking to earn additional rewards from EigenLayer as a Liquid Restaking Token (LRT), combining institutional-grade security with increased yields. uniIOTX is a liquid staking solution on the IoTeX blockchain, addressing issues present in existing Delegated Proof of Stake (DPoS) systems. Bedrock aims to unlock the liquidity and value of PoS tokens through its universal (uni) standard, providing secure liquid staking tokens and enhanced yield opportunities.

In terms of technological innovation and security, Bedrock employs end-to-end contract and node management integration, providing an oracle-free technical architecture that avoids centralization and security risks. Bedrock's non-custodial smart contracts ensure the highest level of protection for user assets, allowing users to stake and withdraw at any time without any restrictions on funds.

In terms of multi-asset support and yield strategies, Bedrock offers high staking yields through tokens like uniETH and uniBTC, while users can also expect various airdrop rewards. For example, uniETH users can anticipate ETH staking yields, EIGEN rewards, AVS airdrops, and $ARB, while uniBTC users can receive BTC staking yields based on Babylon and other BTC L2 rewards.

In terms of cross-chain deployment and compatibility, Bedrock's uni assets have been deployed across multiple ecosystems, including Arbitrum, Linea, Scroll, zklink, and manta, further broadening its compatibility and market coverage. This provides users with the flexibility to stake and re-stake across multiple blockchain platforms.

Codatta

According to the project's official website, Codatta is the first decentralized data protocol built for developers, protocols, and artificial intelligence, characterized by its scientific approach to generating data confidence. The platform enhances data transparency and integrity within the crypto ecosystem by providing metadata annotation capabilities for blockchain addresses. Codatta leverages advanced AI technology and economic incentive mechanisms, integrating community participation to ensure the accuracy and trustworthiness of data, thus providing a solid and reliable data service foundation for developers and various applications.

In terms of flexible scalability, Codatta ensures high quality and trustworthiness by integrating and managing data from various sources, achieving this through collaborative and automated mechanisms. The protocol's infrastructure is highly flexible and can adapt to new data categories.

In terms of data reliability and security, Codatta employs a decentralized approach to annotate metadata, relying on community contributions to verify and confirm metadata labels. It utilizes AI, algorithms, and economic mechanisms to ensure high confidence and accuracy of data, while blockchain technology guarantees the immutability and integrity of data, thereby enhancing the platform's security.

In terms of public accessibility and privacy protection, Codatta is a permissionless platform that allows developers, individuals, and protocols to freely access data. At the same time, to prevent malicious use, minimum access restrictions are set for certain risky datasets, protecting user information and preventing unauthorized access.

GoPlus

According to the project's official website, GoPlus is an open, permissionless, and user-driven modular user security layer for Web3. It is designed to seamlessly integrate with any blockchain platform, providing comprehensive protection that covers every stage of the user transaction lifecycle, significantly enhancing user security. GoPlus conducts thorough risk analysis by leveraging a decentralized user security network and cutting-edge AI-driven security solutions, providing users with intelligent and efficient security services. GoPlus aims to fill the gap in user security layers within existing blockchain architectures, offering users more effective and user-friendly on-chain security protection, thereby creating a safer and more user-friendly Web3 on-chain interaction environment.

In terms of comprehensive security lifecycle protection, GoPlus provides all-around protection from the initiation of a transaction to its final settlement, ensuring security for every interaction and transaction step in the blockchain environment.

In terms of multi-chain security centers, in response to the current fragmentation of security services, GoPlus has created a unified security center that provides cross-chain security policy management, allowing users to manage and monitor the security of multiple blockchains on a single platform. Currently, the number of interactive wallets has reached 11 million, with over 60k paying users and daily active users reaching 2 million.

In terms of seamless on-chain firewalls, GoPlus has introduced an innovative on-chain firewall that is directly integrated into the blockchain, capable of real-time blocking of risky transactions, ensuring uninterrupted security for user transactions.

In terms of decentralized security services, the security services provided by GoPlus are fully decentralized, ensuring the openness, permissionlessness, and user-driven characteristics of the services, in line with the core values of Web3.

Nubit

According to the project's official website, Nubit is a secure and scalable Bitcoin data availability layer designed to expand Bitcoin's data capacity, thereby supporting applications such as ordinals, second-layer solutions, and price oracles, enhancing the scope and efficiency of the Bitcoin ecosystem. Nubit aims to address bottleneck issues arising from data throughput limitations within the Bitcoin ecosystem. Nubit has four core components: validation nodes, full storage nodes, light clients, and an inter-node consensus mechanism. Nubit implements a secure and efficient data validation and storage mechanism, allowing participants to verify the authenticity and availability of data without downloading the complete data.

In terms of inheriting Bitcoin's security, Nubit's security is directly derived from Bitcoin, and its consensus mechanism is strengthened through Bitcoin's own collateralization methods to enhance economic security, anti-tampering, and anti-censorship capabilities.

In terms of data availability sampling (DAS), Nubit ensures data integrity and availability through data availability sampling technology (DAS). This technology allows nodes to verify the existence of data by randomly sampling data blocks, thus eliminating the need to download entire data blocks.

In terms of efficiency improvements, compared to traditional Merkle proofs, the combination of KZG commitments and Reed-Solomon error correction coding significantly enhances data retrieval speed, especially in complex or large data scenarios, with retrieval speeds potentially increasing by up to 100 times.

In terms of test networks and community participation, Nubit has launched an Alpha test network and encourages community members to participate and test various features to drive technological improvement and optimization.

In terms of adapting to Bitcoin's native environment and scalability, the Nubit project and the Nubit DA chain built on the Cosmos SDK are specifically optimized for the Bitcoin ecosystem, supporting native Bitcoin staking, enhancing economic security, and having the potential to promote broader Bitcoin applications and services.

Market Outlook Remains Optimistic

Driven by technological innovation, increased institutional investment, macroeconomic influences, user and adoption growth, and improvements in the regulatory environment, these factors are collectively propelling the cryptocurrency industry forward. Currently, more and more enterprises and institutions are adopting blockchain technology, developing decentralized applications (DApps), smart contracts, decentralized finance (DeFi), etc. These technologies not only enhance efficiency and transparency but also provide new business models and opportunities. For example, Ethereum's upgrades and expansion plans (such as the "Dencun" upgrade) have significantly reduced data costs and improved network performance, attracting more developers and users.

In particular, the decentralized, secure, and transparent characteristics of blockchain make it a powerful tool for addressing issues present in traditional financial systems, such as trust issues, high transaction costs, and slow transaction processing. Additionally, it helps improve financial inclusion, allowing people worldwide, especially those without access to traditional banking systems, to more easily access financial services, thereby driving innovation and reform in social and economic systems.

Overall, the continuous growth of the cryptocurrency industry is driven by both technological innovation and financial inclusion, as well as investment opportunities and decentralized potential. As technology and the market continue to evolve, the cryptocurrency industry may continue to play an important role in shaping the evolution of the global economy and financial system. Through multiple cycles of bull and bear markets, OKX Ventures remains steadfast in supporting innovation, investing in innovation, and nurturing innovation, and is optimistic about the vast development space of the cryptocurrency market in the future.

"We remain optimistic about the prospects of the cryptocurrency market."

Risk Warning and Disclaimer:
This article is for reference only. The views expressed in this article are solely those of the author and do not represent the position of OKX. This article is not intended to provide (i) investment advice or recommendations; (ii) offers or solicitations to buy, sell, or hold digital assets; (iii) financial, accounting, legal, or tax advice. Holding digital assets (including stablecoins and NFTs) involves high risks and may experience significant volatility. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. Please consult your legal/tax/investment professionals regarding your specific circumstances. You are solely responsible for understanding and complying with applicable local laws and regulations.