Looking back on 2021, every day is a day to refresh cognition

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Looking back on 2021, every day is a day to refresh cognition

认知 Labs

2022-01-12 08:50

本文约20898字，阅读全文需要约84分钟

Blockchain is the latest product of the digital age. It has experienced rapid development and multiple changes in the past few years: from the bud in 2017, the smart contract in 2018, the change in 2019, to DeFi in 2020, and in 2021, NFTs are undoubtedly

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1. Sudden outbreak: the first year of NFT in 2021

2021 is the year when NFT will come into the public eye. Although the concept of NFT has appeared in 2014, it didn't start to shine until this year. This year alone, the NFT field has completed a transaction volume of more than 23 billion U.S. dollars. Randomly generated NFT collectibles, mainstream celebrity involvement in the space, and the rise of play-and-earn games are some of the main drivers behind the NFT boom. And the latest Metaverse craze is the icing on the cake.

At the beginning of the year, the celebrity effect in the sports circle suddenly pushed NFT from a niche market to a real mainstream market. The monthly transaction volume of NBA Top Shot on Dapper Labs alone exceeded $200 million in February and March, surpassing the total transaction volume of the entire NFT market in 2020.

Earlier this year, celebrities and artists also made waves in the NFT space, from Grimes to Rob Gronkowski to crypto creators like Pak and 3LAU. It is worth mentioning that digital artist Beeple sold an NFT for US$69.3 million at Christie's auction in early March, ranking third among the current single auction scale of living artists, which caused a sensation in the entire encryption industry and further Promoted the NFT boom.

However, from now on, this auction seems to have become the ceiling of the early stage of the NFT boom: the mania gradually faded, and the market began to become saturated. It's clear that Top Shot sales are starting to wind down, and more and more celebrities aren't getting the expected returns. Many are starting to wonder if the NFT boom is just a flash in the pan.

Overall, in the first half of 2021, the NFT field completed a record transaction volume of US$2.5 billion, and the average transaction volume per quarter was relatively balanced, breaking the previous achievements in this field. However, as the price of cryptocurrencies began to soar in July, the NFT market seemed to be injected with rocket fuel, and it soared to astonishing new heights in August. After several months of development in the NFT market, the community and team have gradually become stronger, and their utility has gradually expanded, establishing its "blue chip" status, and the transaction volume has reached 10.7 billion US dollars.

The value of NFT collections has been highly reflected in 2021. Collectibles are no longer simple NFT items, some have become exclusive brands, and as the metaverse becomes more mature, these brands will become more closely related to the metaverse. According to the statistics of the top 100 NFTs in terms of historical trading volume, at the time of writing this article, the market value of NFTs is about 16.7 billion US dollars.

OpenSea is currently the leading NFT platform in the industry. Its transaction volume on Ethereum in June was US$150 million, jumped to US$329 million in July, and soared to US$3.4 billion in August. It is not difficult to find that it is more original and fully encrypted native projects that are driving the surge this time, which also fully demonstrates the creativity of digital assets and the potential of community and functional utility.

In the next few months, socialite Paris Hilton, rap superstar Eminem and NBA star Stephen Curry also joined the NFT collection team, and headlines about NFT began to appear frequently in the mainstream media since then. This popularity of NFTs became even more evident as Beeple's artwork "Everydays: the First 5000 Days" sold for $69 million and NFTs debuted at the prestigious Christie's auction house. Over the next few months, several other art NFTs, as well as parts of CryptoPunks and BAYC collections, fetched sky-high prices at both Christie’s and Sotheby’s.

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2. Looking forward to 2021 NFT, what new use cases have been developed?

Looking forward to 2021, what new use cases have NFT developed, and which use cases may be taken to a higher level in 2022? Let's explore together.

NFT Function: Art

SuperRare

Often referred to as "Cryptoart," NFT art is one of the fastest growing NFT segments. Painters, designers, musicians, and more create NFTs through blockchain-based minting platforms to gain more control over their sales.

Rarible

SuperRare is a social networking platform for art creators and collectors powered by blockchain technology. Creators can create digital artwork and have it tokenized on the Ethereum blockchain. Thanks to smart contracts, collectors can buy and trade artworks, with royalties paid back to creators.

Pixlr Genesis

Rarible is an open-source, non-custodial platform for users to mint, sell and create collectibles. Any user can create and display their own artwork, and can also use Ethereum to purchase artwork for collection. Users own the ownership and intellectual property rights of NFT. Buyers and sellers can transact on Rarible at almost negligible cost.

Pixlr Genesis is developed by the world's best online image editor Pixlr, aiming to build the world's largest decentralized virtual museum, with the goal of being comparable to the Louvre, MoMA and the National Gallery of Art. The Pixlr Genesis Ecosystem will consist of five modules: "Gallery", "Auction", "Foundry", "Masterpiece" and "Community". Since its launch, Pixlr Genesis has issued 2,000 out of 10,000 unique NFT "passes" generated by AI algorithms. From the perspective of art collections, each "pass" represents a unique artwork; From the perspective of art display, "passport" represents the right to display one's own NFT artwork in the virtual museum. In addition, Pixlr Genesis will also support art creators and build a bridge for artists to connect with the community by cooperating with well-known artists to issue NFT.

NFT Function: Collectibles

CryptoPunks

Physical collectibles may increasingly become a thing of the past as Ethereum provides an easy and viable way to produce high-quality digital collectibles, either native NFTs or NFTs related to real-world collectibles.

Bored Ape Yacht Club

Launched in the summer of 2017 as one of the earliest NFTs, CryptoPunks was the first NFT project released via Ethereum and paved the way for the ERC-721 token standard that has dominated the NFT ecosystem so far . There are only 10,000 of the punks, categorized as Alien, Ape, Zombie, Human, they are rare and beautiful collectibles. CryptoPunks is the originator of NFT and is recognized as the starting point of the "crypto art" movement. The known leading payment company Visa, Cai Wensheng, the chairman of Meitu, Hong Kong actor Shawn Yue, and Sun Chenyu, the founder of Tron public chain, are all holders of cryptopunk NFT.

Bored Ape Yacht Club (bored ape) is issued by Yuga Labs, an American Web3 company. The 10,000 bored apes generated by algorithms provide users with rich choices and diverse features. The characteristics of each ape are randomly generated, so each ape has a unique background style, clothing, earrings, eyes, mouth and fur. Known famous rapper Post Malone, well-known host Jimmy Fallon, famous investor Mark Cuban, legendary hip-hop music producer Timbaland, NBA legendary star Shaquille O'Neal, etc. are all holders of Boring Ape NFT.

NFT function: game

Axie Infinity

Blockchain games powered by Ethereum are moving towards a "Play-to-Earn" future. Players play games, earn more assets, and can trade in the process. NFT plays an important role as a form of ownership of game items.

Axie Infinity is a Pokemon-like NFT game that allows users to collect, breed and battle iconic Axie monsters for glory and profit through tradable and sellable NFT game assets. Axie Infinity is not only the biggest Ethereum game, but also one of the most used applications on Ethereum right now. As the pioneer of "gold-making" in the blockchain field, this summer fired the first shot of the NFT and GameFi frenzy, which also made blockchain games enter a stage of frantic development in the past few months. Sorare

Sorare is an emerging fantasy football game that has made significant strides through partnerships with some of the largest professional football franchises in the world. Players create fantasy teams using digital trading cards, then go head-to-head in matches to see who's the best football manager. The game runs on Ethereum, and each player card is an NFT. As of writing, Sorare has been officially authorized by 215 football clubs around the world, including Real Madrid, Juventus, Bayern Munich and other well-known teams.

NFT Function: Metaverse

Since Facebook announced last month that it will focus on the development of the metaverse and change its name to "Metaverse (Meta)", there has been a wave of "Metaverse" in the world, and many global giants including Microsoft and Disney have also announced Invest in the construction of the metaverse. It can be said that the metaverse is composed of NFT, which clarifies the ownership of items in the virtual world, ranging from land, houses, to clothing, as long as it can be privately owned by the user, it can be cast into an NFT. In turn, the metaverse has also created a new application scenario for NFT.

Decentraland

The virtual land/house, which is an important item in the encrypted metaverse, is formed in the form of NFT. Users can invite other players to help "develop" your land, or rent it out to creators for a profit.

Sandbox

Decentraland was originally created in 2015, first launched the Beta version in 2017, and gradually became one of the most powerful projects in the metaverse in the wave of NFT in 2021. Where users can buy land, visit buildings, move around or meet people. Decentraland has become a popular gathering place for the metaverse of the crypto world. Notably, the Ministry of Foreign Affairs and Foreign Trade of the Caribbean island nation of Barbados has signed an agreement with Decentraland to create a digital version of its embassy.

Cryptovoxels

The Sandbox runs on the Ethereum blockchain, giving players the freedom to create their own virtual worlds, using their creativity and imagination to customize as they wish while collaborating with others. Sandbox has launched P2E activities, in the virtual world, players can spend time completing a series of tasks to earn assets. It’s worth noting that SandBox raised $93 million a month ago, led by Japan’s SoftBank’s Vision Fund.

Cryptovoxels is a virtual world built on the Ethereum chain. The website has built-in editing tools, and players can buy, sell and build virtual art galleries, shops and anything that players can imagine. In addition, Cryptovoxels also offers live avatars and text chat.

NFT Function: Streaming

Opensea

In March of this year, encrypted artist Beeple's digital artwork "Every Day: The First 5,000 Days" was auctioned at Christie's for more than 60 million US dollars, which made NFT instantly popular in the art circle, and some musicians and artists joined in.

OpenSea is the most popular NFT marketplace and NFT minting platform. Artists can mint on multiple chains, including Ethereum and Polygon. The file types supported by Opensea include MP3, MP4, WAV.

Async Art

“Music NFTs are changing the way fans connect with their favorite artists. From 3LAU to Imogen Heap, creators of all kinds are innovating on the blockchain, in an industry that underserves independent creators , the desire for change is palpable." - Opensea

Audius

Audius is a decentralized music sharing platform based on the Solana blockchain, which aims to remove the intermediate links and additional costs of music streaming services, allowing artists to directly receive their due revenue share. Specifically, users of the platform can use tokens to unlock music, or earn tokens by watching advertisements to unlock. When users listen to songs in this decentralized music library, the wallet automatically pays. Among them, about 85% of the proceeds belong to the artist. The remaining part is obtained by the song provider and the development team.

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3. The market value of encryption has repeatedly hit new highs, and the top ten rankings have frequently changed

In 2021, the market value of cryptocurrencies will hit new highs repeatedly.

At the beginning of the year, the total market capitalization of cryptocurrencies was only US$779.5 billion. In January and May, it crossed the US$1 trillion and US$2 trillion mark successively, and reached a record US$3 trillion on November 10 this year; On December 22, the total market value of encryption was tentatively reported at US$2,415.9 billion, an increase of 175% from the beginning of the year.

At the same time, Bitcoin's dominance in the encryption market has been weakened, and its market value has continued to decline from 70.66% at the beginning of the year to 38.8%. This is also the first time since mid-2018 that Bitcoin's market value has fallen below 50%.

The main reason behind this is that with the overall development and growth of the encryption ecology, more emerging projects have emerged, and various ecological sectors are blooming. It is worth noting that the market value of Ethereum has risen sharply this year, from 11% at the beginning of the year to 21% currently.

In terms of prices, mainstream assets such as Bitcoin and Ethereum broke new highs for the first time this year. Bitcoin rose to $69,000 (November 10), and the current price is about $49,000, which is nearly 70% higher than the price at the beginning of the year; Ethereum rose to $4,860 (November 10), and is currently at $4,050, which is higher than the price at the beginning of the year. Up 450%.

In 2021, the total transaction volume of Bitcoin and Ethereum will reach a record high of 7.5 trillion US dollars, an increase of 435% over the previous year.

Let’s look at stablecoins again. The stablecoin market will continue to grow in 2021, and the supply of US dollar stablecoins has soared by 388%, from US$29 billion at the beginning of the year to more than US$140 billion. Stablecoin usage is also at an all-time high. The adjusted annual transaction volume of stablecoins in 2021 exceeds $5 trillion, which is a year-on-year increase of more than 370% compared to the transaction volume in 2020.

The growth of stablecoins is mainly due to the following reasons:
As the stable currency is used as a market hedging tool and payment intermediary, it will naturally grow with the market size;
With the development of DeFi, people use stable coins for lossless mining;

Derivatives markets typically use stablecoins as settlement units.

The stablecoin market is ushering in more regulation and scrutiny. For non-compliant stablecoins, there may be further loss of living space in the future.

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4. Events in 2021

After an overview of the primary and secondary markets, we will review the most memorable events and achievements of the year by sector/track. (swipe up and down)

①Bitcoin ETF finally landed, the mining industry ushered in a big migration

No matter how encrypted finance evolves, Bitcoin, as the cornerstone and vane of the market, will always be the focus.

At the beginning of 2021, Bitcoin continued its upward trend, rising from $29,000 at the beginning of the year, breaking through the $30,000, $40,000, $50,000, and $60,000 barriers, and finally hitting a new high of $65,000 in the first half of the year (April 14). Record; In May, with the tightening of policies and the exit of market profit taking, Bitcoin ushered in a sharp correction. On May 19, Bitcoin fell to a minimum of 30,000 US dollars.

In the next two months, Bitcoin has been consolidating around $30,000, and began to rebound in August, starting to "slow bull", and finally hit a historical record of $69,020 on November 10-this also made its market value reach 1.3 at one point. Trillion US dollars, surpassing Meta and Tencent, and squeezed into the top five in the world in terms of "company market capitalization". At present, the price of Bitcoin is temporarily reported at 49,000 US dollars, which is nearly 70% higher than the price at the beginning of the year.

Since the beginning of this year, the price of Bitcoin has always been above $30,000, which has also made many people full of confidence in the market outlook. The argument that "the market has entered a long bull" has emerged endlessly. Optimists believe that Bitcoin will break through $100,000 in 2022.

As the price of bitcoin rises, mainstream institutions pay more attention to it, and some listed companies have also begun to accept bitcoin as payment or use it as an asset reserve.

In February, Tesla submitted a report to the U.S. SEC stating that the company plans to purchase bitcoin worth US$1.5 billion; in March, Tesla’s official website announced that it supports bitcoin payments; A plan to suspend payments for his car in bitcoin was announced on Twitter, citing “not being environmentally friendly.”

Musk, who has repeated attitudes and has real market influence, has also made many crypto investors "love and hate" him.

Another representative of a listed company that continues to increase its position in Bitcoin is MicroStrategy, which has started the "crazy buying, buying, buying" mode. In addition, the global payment platform Visa has opened cryptocurrency payments; the asset management company Grayscale published an advertisement for the Bitcoin Trust Fund (GBTC) in the "New York Times" newspaper, promoting Bitcoin... The running admission of institutions successfully raised the Bitcoin price. The recognition of the value of the currency increases.

In addition to institutional purchases, the legalization of Bitcoin in some regions has also become a major positive for its fundamentals.

In June, President Nayib Bukele of El Salvador submitted a draft bill to the country's legislature, requiring Bitcoin to become the country's legal tender; on September 7, the bill came into effect and Bitcoin finally became legal tender. Although this plan has caused controversy at home and abroad, it is of great significance to the development of the entire encrypted finance. Bitcoin entered social life in a legal capacity for the first time. El Salvador has also set an example, and more Latin American countries are trying to follow suit and legalize Bitcoin.

In terms of structured products, the long-awaited ETF (Exchange Traded Fund) in the encryption market will finally be realized in 2021. In October of this year, the first Bitcoin futures ProShares Bitcoin Strategy ETF was officially launched and landed on the NYSE Arca exchange. After that, the SEC successively approved several futures ETFs.

Although from the perspective of price feedback, the impact of ETFs on the encryption market has not met expectations. But in any case, with the emergence of such compliant products, the confidence of traditional institutional investors and ordinary users in encryption will continue to increase.

At the technical level, this year Bitcoin ushered in an important soft fork to upgrade Taproot, which was approved by more than 90% of miners. This upgrade includes three items: Schnorr signature (BIP 340), Taproot (BIP 341) and TapScript (BIP 342). The upgrade ultimately reduces transaction fees on the Bitcoin network and improves the anonymity and efficiency of transactions.

In addition, before the end of the year, the number of Bitcoin non-zero addresses exceeded 40 million, a record high.

For miners, important participants in the Bitcoin ecosystem, 2021 is a year of migration.

In May of this year, the Financial Stability and Development Committee of the State Council proposed "cracking down on bitcoin mining and trading activities" in a meeting, setting off a new wave of supervision; Xinjiang, Qinghai, Inner Mongolia and other provinces and cities across the country have successively issued bans on virtual currency Mining was rectified and cleaned up, and a large number of mines were shut down or went to sea. In the end, some miners found new mines in Kazakhstan, Texas, and other places in the United States to continue their mining business.

Affected by the shutdown of mines, the computing power of Bitcoin is also changing drastically. In April of this year, the computing power reached its peak, but it fell by nearly 50% between May and July; so far this year, Bitcoin computing power has risen by nearly 20%.

②Meme: It started as a joke and became popular in the community

If you bought $100 of BTC at the beginning of the year, it will be worth $167.4 now; if you bought SHIB, guess how much it is worth now? The answer is $62 million. This is the ultimate embodiment of the wealth effect of Meme coins."A new sector was born in the encryption market this year: Meme currency, representative projects include various animal coins such as Doge and SHIB. Meme culture can be commonly understood as

Play meme", any item with the attribute of "joke" can be called Meme currency.

The rise of Meme culture originated from a major event in the traditional financial market at the beginning of this year-the GME defense battle. In a nutshell, Wall Street retail investors joined hands to buy GME shares on Robinhood, resulting in short-selling by institutions and causing losses, which once reversed the status of retail investors and institutions.

The anti-traditional and anti-Wall Street movement sang in the mainstream society. This trend of thought spread to the encryption market and was shaped into a more rebellious Meme culture. Market prospects, business models, technological advantages, product highlights, etc. that were once valued by investors have become interesting marketing and consensus building in the Meme era.

The "Chief Magnification Officer" of Meme Coin is Musk, who tweets every once in a while, "Tucao" Dogecoin, and "reversely attracts" many people outside the circle. Even in the eyes of many overseas "leeks", Dogecoin is the real Bitcoin. As Musk "shouted orders" again and again, Dogecoin made great strides, and its market value squeezed into the top ten, surpassing Uniswap, the leading DEX project. to the loop.

①Bitcoin ETF finally landed, the mining industry ushered in a big migration

No matter how encrypted finance evolves, Bitcoin, as the cornerstone and vane of the market, will always be the focus.

As the price of bitcoin rises, mainstream institutions pay more attention to it, and some listed companies have also begun to accept bitcoin as payment or use it as an asset reserve.

Musk, who has repeated attitudes and has real market influence, has also made many crypto investors "love and hate" him.

In addition to institutional purchases, the legalization of Bitcoin in some regions has also become a major positive for its fundamentals.

(Bitcoin Legalization Act)

In addition, before the end of the year, the number of Bitcoin non-zero addresses exceeded 40 million, a record high.

For miners, important participants in the Bitcoin ecosystem, 2021 is a year of migration.

②Meme: It started as a joke and became popular in the community

Play meme", any item with the attribute of "joke" can be called Meme currency.

At the same time, the meme currency represented by DOGE has gradually become part of the multiculturalism of the encryption community. From March to May, various altcoins such as AKITA, Pig Coin (PIG), Dog Coin (DOG), Loser Coin (LowB) etc. were born in batches; It quickly collapses or returns to zero.

In the end, only Dogecoin's "imitation disk" Shiba Inu (SHIB) really survived and "became bigger and stronger". SHIB continued to rise steadily in the second half of the year, and finally hit a record high of $0.00008845 in October; compared to the beginning of the year, SHIB's highest increase exceeded 1.25 million times. An important reason for the rise of SHIB is also inseparable from Musk's many "joking comments" and the successive launch of many mainstream platforms such as Coinbase.

The rise of SHIB led to the revival of Meme culture and inspired GM (Good Morning), People and other representatives of emerging Meme coins.

Among them, GM's market value rose from zero to 200 million US dollars in just 3 days after it was released (the highest reached 400 million US dollars, and it is still maintained at 100 million US dollars). In the name of DAO, People Coin crowdfunded a bid for a copy of the U.S. Constitution, and after the auction failed, it was converted into Meme Coin, and the price soared more than 50 times at one point.

Generally speaking, Meme culture has been fully integrated into the encryption community, and it has a strong communication influence by virtue of the subcultural consensus. But we should also clearly realize that in order to promote the maturity and development of encrypted finance, marketing and FOMO alone are not enough. Technology and products are the primary productivity of change. As a result, Meme coins can be a "seasoning" blindly, but it is difficult to become a "main course".

③The continuously evolving DeFi

Compared with the ups and downs of the Meme coin, the DeFi sector is a little deserted, but if you look at the performance of DeFi throughout the year from a higher perspective and more dimensions, it is not difficult to find that the evolution of DeFi has never stopped.

At the macro data level, DeFi has always maintained a positive growth trend.

According to DeFi Pulse data, as of December 21, the total value (TVL) of assets locked in major ecological DeFi agreements has reached 2.432 billion US dollars. Looking closely at the change curve of TVL, the "519" level black swan event is only a small twist in the upward trend.

Data from Dune Analytics shows that towards the end of the year, the number of independent addresses that have interacted with DeFi protocols exceeded the 4 million mark for the first time, and a large number of fresh blood is constantly pouring in.

At the level of individual projects, most of the "blue chip" DeFi will complete their major iterations in 2021.

Uniswap v3 brings the new possibility of "active market making" to AMM; Aavev3 begins the exploration of cross-chain lending; The impact of Uniswap v3 on its stablecoin market status, and its long-term occupation of the top spot in individual protocol TVL by virtue of its multi-chain strategy... Among the many "blue chips", the slightly disappointing performance may be Compound and SushiSwap, the former appears A contract loophole with a relatively large impact caused tens of millions of dollars of COMP to be misdistributed, and the latter was exposed to infighting. It is still unknown whether the long-awaited next-generation Trident can be launched smoothly.

At the track trend level, as the market structure of basic subdivisions such as stablecoins, lending, and DEX is becoming more and more stable, the focus of DeFi is gradually shifting.

The first is the explosion of derivatives. Here I have to mention dYdX’s token issuance and airdrop. As the most concerned project under the concept of derivatives, the market has placed quite high expectations on the value of dYdX. Coupled with the generous amount of the project party (the airdrop ratio is 7.5%), the vast majority of users who have interacted with dYdX have received tens of thousands The airdrop income of US dollars has also set off a new round of fleece frenzy in the market.

However, from an industry perspective, although dYdX once surpassed the sum of all other DEXs under the support of the transaction mining strategy, such stimulation is obviously difficult to last for a long time, accompanied by the decline of dYdX’s daily trading volume and currency prices. , The voice of "derivatives explosion" is gradually weakening. We firmly believe that derivatives will explode in the DeFi field like spot products, but it seems that such an explosion cannot be ignited by a single project issuing coins.

The second trend worthy of attention is the embrace of traditional finance (TradFi). The three lenders who have done a better job in this regard are MakerDAO, Aave, and Compound. The former has been actively exploring how to introduce real-world asset collateral. In the summer, the two announced new services for traditional financial institutions, Aave Pro (now renamed Aave Arc) and Compound Treasury.

At the end of the year, the DeFi 2.0 narrative aimed at reconstructing liquidity relationships and optimizing capital utilization efficiency emerged rapidly, and a number of emerging projects represented by Olympus DAO, TokeMak, Abracadabra, etc. also emerged. Although there is still a lot of controversy about the naming of "DeFi 2.0", regardless of the title, the core efforts made by similar projects-making liquidity services more sustainable are still worthy of recognition.

In addition to the above trends, the multi-chain layout is also a major trend in the current DeFi track (see the "Cross-chain" section below for details).

④ NFT that attracts crazy fans × everything

The blockchain industry has spent ten years looking for a killer application direction that is enough to "out of the circle". Last year's DeFi did not fully realize this dream, and this year's NFT is doing its part.

In 2021, the annual landmark event in the NFT field should be: In March, artist Beeple's NFT work "Everydays: The First 5000 Days" was auctioned at Christie's for US$69.346 million, successfully attracting the attention of people in various fields such as traditional art.

①Bitcoin ETF finally landed, the mining industry ushered in a big migration

No matter how encrypted finance evolves, Bitcoin, as the cornerstone and vane of the market, will always be the focus.

As the price of bitcoin rises, mainstream institutions pay more attention to it, and some listed companies have also begun to accept bitcoin as payment or use it as an asset reserve.

Musk, who has repeated attitudes and has real market influence, has also made many crypto investors "love and hate" him.

In addition to institutional purchases, the legalization of Bitcoin in some regions has also become a major positive for its fundamentals.

(Bitcoin Legalization Act)

In addition, before the end of the year, the number of Bitcoin non-zero addresses exceeded 40 million, a record high.

For miners, important participants in the Bitcoin ecosystem, 2021 is a year of migration.

②Meme: It started as a joke and became popular in the community

Play meme", any item with the attribute of "joke" can be called Meme currency.

The rise of Meme culture originated from a major event in the traditional financial market at the beginning of this year-the GME defense battle. In a nutshell, Wall Street retail investors joined forces to buy GME shares on Robinhood, resulting in short-selling by institutions and causing losses, which once reversed the status of retail investors and institutions.

The rise of SHIB led to the revival of Meme culture and inspired GM (Good Morning), People and other representatives of emerging Meme coins.

③The continuously evolving DeFi

At the macro data level, DeFi has always maintained a positive growth trend.

At the level of individual projects, most of the "blue chip" DeFi will complete their major iterations in 2021.

At the track trend level, as the market structure of basic subdivisions such as stablecoins, lending, and DEX is becoming more and more stable, the focus of DeFi is gradually shifting.

However, from an industry perspective, although dYdX once surpassed the sum of all other DEXs under the support of the trading mining strategy, such stimulation is obviously difficult to last for a long time, accompanied by the decline of dYdX’s daily trading volume and currency prices. , The voice of "derivatives explosion" is gradually weakening. We firmly believe that derivatives will explode in the DeFi field like spot products, but it seems that such an explosion cannot be ignited by a single project issuing coins.

In addition to the above trends, the multi-chain layout is also a major trend in the current DeFi track (see the "Cross-chain" section below for details).

④ NFT that attracts crazy fans × everything

In December, artist Pak's project "Merge" was publicly sold on the NFT trading platform Nifty Gateway. The final total turnover was nearly 91.81 million US dollars, making it the most expensive NFT in history, and ranked third among the world's living artists.

Like many young and niche "FT", the high price of NFT will also be questioned by hype, marketing, and bubbles, but the high price will "increase" a group of people and attract more funds (the total transaction volume of NFT this year broke through $23 billion), traffic, and entrepreneurs pushing the industry to maturity.

This year, many technology giants (Tencent, Alipay, Mega, Microsoft, Twitter, etc.), media platforms (Time Magazine, CNN, Vogue, etc.), many consumer brands and big IP parties (Nike, L’Oreal, Coca-Cola, McDonald’s) , Disney, Sony, etc.), cultural and sports stars (Jay-Z, Whitney Houston, Wong Kar Wai, Jordan Chan, Bailey, Curry, etc.), political and business people (Jack Dorsey, Musk, Snowden, Melanie Ya Trump, etc.) have purchased, issued or deployed NFT.

From the initial small-scale influence of NFT to the field of collections, to the economic empowerment of creators, and then to the wider consumer level to transform the fan economy and brand market relations, and gradually expand the radius of radiation.

While NFT projects are flourishing, its infrastructure (trading market, data analysis platform and search navigation tools, financial services such as lending/leasing/spin-off/crowdfunding) is on the rise.

In July, Opensea, the leading NFT trading market with a US$100 million round of investment led by a16z, has seen exponential growth in monthly turnover. The total number of current users has exceeded 750,000. In December, the market share of ETH trading volume reached 98.2%. The amount is at least 16 billion U.S. dollars, and the total revenue is estimated to reach 400 million U.S. dollars.

The total transaction volume of Art Blocks, an NFT generative art platform, exceeded US$1.1 billion, and its current market value is nearly US$130 million.

This year, Sotheby's, an art auction house that has undertaken auctions of Pak NFT works, World Wide Web source code NFTs, CryptoPunks, BAYC, etc., earned $100 million from NFT sales.

Finally, we would like to mention a separate segment - NFT crowdfunding DAO. In August, CryptoPunk #173 was sold at 99.9 ETH through community crowdfunding, and People's Punk issued token DDDD thereafter. PleasrDAO, the originator of crowdfunding and buying NFT gameplay, has collected 11 NFT works this year, including Uniswap V3 official announcement video clip NFT, Snowden's first NFT, Dogecoin original photo NFT, Wu-Tang Clan's orphan album "Once Upon A Time In Shaolin" and so on.

This type of NFTFi × DAO innovative product often splits the rights and interests in the form of bundling or collection methods and funds in practice. It does lower the entry threshold for some high-priced NFTs and improve their liquidity, but it also corresponds to custody and display. New risks such as unclear rights, difficulty in exiting or reselling, and imperfect buyout mechanism.

⑤Chain games and GameFi make great strides forward

In 2021, NFT will also consolidate its position in the gaming industry. First look at the chain games in the circle: Dapper Labs’ explosive collection NFT game NBA Top Shot’s annual sales exceeded 750 million U.S. dollars, and the number of transactions exceeded 11.41 million; Axie Infinity, a Southeast Asian chain game that led the “Play to Earn” trend Sales exceeded US$3.8 billion, daily active players were nearly 2.8 million, and the most expensive "Axie" sold for US$820,000; the PFP (personal profile picture) NFT representative of CryptoPunks, which was originally just a niche avatar IP but derived many gameplays On December 19, the market value was about 2.64 billion US dollars, and the floor price exceeded 240,000 US dollars.

This year, there are still many NFT projects that have gained sufficient attention and repeatedly set sales records: the BAYC series of "children and grandchildren", the card game Parallel Alpha, the TXT text version of NFT with randomly generated equipment names representing Loot...

Let’s look at the increase of traditional games to NFT: Ubisoft (Ubisoft) will launch the NFT platform; NetEase’s game “Infinity” IP authorized the release of NFT blind boxes; Epic Games’ digital game platform Epic Games Store will provide blockchain and NFT games open……

This year, chain games have surpassed the positioning of traditional games as "leisure, entertainment, and competition", adding attributes of finance, collection, and display, and broadening people's definition and cognition of games.

In addition, under the strong "play and earn effect" of Axie Infinity, game guilds represented by YGG and others are also based on the main business of "playing gold", and have derived scholarship (scholarship), game asset leasing, investment incubation, etc. business line, and triggered a financing boom in Q4.

⑥Web 3.0: the day of victory is not far away

For the next encrypted narrative - Web 3.0, the definition with the highest consensus in the industry is "read, write, own" proposed by a16z partner Chris Dixon.

On December 8, the House Committee on Financial Services held a hearing on Capitol Hill entitled "Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States".

At the meeting, Bitfury CEO Brian P. Brooks also quoted Chris' theory when answering Representative Patrick McHenry's question about Web 3.0. Brooks explained that in Web 1.0, users only read specifically, so this is a "read-only Internet"; in Web 2.0, in addition to reading content, users can also publish content themselves, but these content do not belong to users All, so it is just "the Internet that can only be written"; in Web 3.0, in addition to being able to read and publish content, users will also really own all the rights and interests of the content, realizing the real "readable, writable, and ownable" the Internet".

After the meeting, the edited video of Brooks’ answer was forwarded and disseminated by people in the industry, like a shot in the arm to help people who are still confused strengthen their beliefs.

In 2021, we have seen the irreversible development of the Web 3.0 trend, various infrastructures have become more mature, and upper-layer applications have gradually spread. MetaMask, the preferred entrance to the decentralized world, has achieved a blowout explosion in business volume. After its developer ConsenSys completed a financing of 200 million US dollars, its valuation has risen to 3 billion US dollars (although this does not seem very Web 3.0); Arweave, as a permanent decentralized content storage layer, also completed value discovery in the second half of the year; ENS continued to be popular after the issuance of coins and airdrops, and also triggered in-depth discussions on the imagination of domain names in the market; Mirror has become a popular topic for everyone to read One of the regular channels for premium content in the industry...

Maybe we should go back to that Chris quote: first they ignore you, then they laugh at you, then they fight you (where we are), and then it's your day of victory.

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5. The encryption industry is moving towards compliance and embracing regulation

In the past year, with the diversified development of the encrypted world, global policies have been tightened and regulations have become stricter.

① China clears digital asset mining and trading industry

As early as 2017, seven ministries and commissions jointly issued the "September 4th Notice", prohibiting the operation and trading of cryptocurrencies in China, but there is no clear restriction on cryptocurrency mining. This year, my country explicitly banned the continued existence of the encryption mining industry in the country.

On May 21, the Financial Affairs Commission of the State Council proposed to "crack down on Bitcoin mining and trading activities" in a meeting. Since then, Xinjiang, Qinghai, Inner Mongolia, Yunnan, and Sichuan have introduced relevant policies to rectify and clean up virtual currency mining.

On September 24, ten ministries and commissions including the People's Bank of China jointly issued the "Notice on Further Preventing and Dealing with the Risk of Hype in Virtual Currency Transactions", clearly emphasizing that the exchange of fiat currencies for virtual currencies, currency transactions, and currency issuance are illegal financial activities. The provision of services by virtual currency exchanges to residents in my country through the Internet is also an illegal financial activity.

Since then, many trading platforms, including Binance, Huobi, OKEx, etc., have announced the withdrawal of mainland Chinese users and withdrawal from the Chinese market.

②The United States has increased penalties and expanded the borders of encryption supervision

In 2021, US encryption regulatory incidents will become more frequent.

From the perspective of law enforcement, the number of times SEC (Securities Regulatory Commission) and CFTC (Commodity Futures Trading Commission) mentioned cryptocurrency sanctions in press releases has increased by 25 times; The U.S. dollar increased 13-fold to $562 million in 2021, while the amount of CFTC fines increased more than 80-fold from approximately $9 million in 2020 to $716 million. Of course, an important reason for promoting data growth is that some sanctioned objects have relatively large fines.

Interestingly, according to media statistics, more than 70% of the SEC's enforcement actions eventually ended in settlement (payment of fines), and the most commonly used reason for the SEC is "violation of securities laws." The SEC sued Ripple last year, and there is still no result for more than a year. There is a high probability that a settlement will be reached in 2022.

In addition, Gary Gensler became the chairman of the SEC this year. He is relatively aggressive in the supervision of encrypted finance. Within a month, he launched investigations on Terra development companies Terraform Labs, Marathon Digital and other companies. He has also repeatedly reiterated that the regulatory measures for cryptocurrencies will not be changed in the future, and relevant companies must report and register with the SEC.

In addition to CFTC and SEC, the U.S. Currency General Inspection Office (OCC) also jointly launched a survey called "crypto sprint" (crypto sprint) in October this year, jointly with the Federal Reserve and the Federal Deposit Insurance Corporation, to conduct strict scrutiny of the encryption industry. In the end, it came to a conclusion that was not friendly to the encryption industry, and it also hinted that actions may be taken later.

The voice and law enforcement of multiple departments in the United States have put forward regulatory requirements for the encryption industry. In fact, it is essentially a struggle for administrative power. The encryption industry is originally an emerging industry, and there is no specific division of which party should be under its jurisdiction. For U.S. regulators, whoever has the right to speak in the encryption market will be able to influence the direction of the industry.

Currently, only the SEC has real influence and voice. The U.S. Congress is trying to change that with the Digital Commodity Exchange Act. The bill, introduced last year by U.S. Rep. Michael Conaway, seeks to establish a federal definition for a "digital commodity exchange," putting it in its own legal category and giving the CFTC oversight of it.

At present, the bill has been returned to Congress as a draft, and lawmakers are actively discussing it with encryption practitioners.

In terms of US regulation this year, there is another topic that has attracted much attention: cryptocurrency taxation.

This year, the US Congress proposed the "Infrastructure Investment and Employment Act", which explicitly requires "brokers" to report transaction information exceeding US$10,000 to the US Internal Revenue Service. It has been argued that the bill’s definition of “broker” is “too broad and vague” and could impose those requirements on miners and wallet developers, not just cryptocurrency exchanges like Coinbase. Some crypto-friendly senators began trying to fix the problem, proposing new amendments, but they were ultimately voted down.

At present, the bill has been signed by Biden and will be officially implemented from 2022.

Regulatory measures in other countries are also gradually becoming stricter. In September this year, relevant financial departments in South Korea strengthened the supervision of cryptocurrency exchanges. All South Korean cryptocurrency exchanges must register with the financial sector before a certain time, provide compliance certificates from Internet security agencies, and cooperate with banks to ensure the real names of accounts. Unregistered exchanges will close their services after September 24. .

In addition, with the popularity of chain games and the establishment of a gold mining ecosystem, Southeast Asia has become a new blue ocean for the crypto gold market this year, and many trading platforms have also migrated here.

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6. 2022: Crypto maintains innovation and moves towards the mainstream

Looking back on 2021, from the leaders represented by Bitcoin and Ethereum, to various application fields such as DeFi, NFT, and chain games, to infrastructure such as public chains, Layer 2, and cross-chain protocols, great progress has been achieved. At the same time, supporting components and services such as wallets, data analysis and security companies also silently undertake and guard the value.

There are many bright spots in 2021, the sectors rotate rapidly, and there are still many small hot spots and small outlets that cannot be detailed in this article, such as NFTFi, SocialFi, decentralized storage, decentralized oracle, and liquidity release plan……

After 2021 is a link between the past and the future, we look forward to the Crypto industry in 2022 will continue to become the mainstream proposition of globalization, and usher in richer innovations in more vertical industries.

Macroscopically speaking, Web 3.0, metaverse, NFT and DAO will still be the key words of investment, and the combination of big entertainment and consumer fields and blockchain will continue to deepen; various compliant derivatives represented by Bitcoin spot ETF It is expected to be approved and guide more traditional funds into the encryption industry, and custody and compliance services will also grow further; the encryption regulatory policies of major countries are becoming clearer, more central bank digital currencies are entering the stage of implementation, and some countries will follow El Salvador The pace of expanding the application scenarios of Bitcoin...

Head exchanges may land on the traditional secondary market; the merger of Ethereum 1.0 and 2.0 will become a landmark milestone in the history of the public chain; legendary encryption funds will usher in a bumper year; talents from the traditional financial and technology fields will Keep pouring in and building the crypto industry...

GameFi and game guilds will enter the next stage of development, further realizing the initial vision of the metaverse; ownership economy and creator economy will be further verified in SocialFi's attempts; green and privacy will move from concept to mass adoption...

Summarize

NFT is a very young field in the encryption industry. Over time, the transaction volume, asset liquidity and number of new users are rapidly expanding. It is expected that use cases such as metaverse, fragmentation, and streaming media will still have the potential for rapid development in 2022 . As more use cases emerge and mature, the NFT ecosystem is expected to gain wider access to crypto investors.

As one of the most direct and perceptible joints between blockchain and valuable objects, NFT is expected to continue the trend of "out of the circle". In real life, game accounts, original music, videos, figures and even real estate can all be classified as non-homogeneous assets. Already, many innovative companies or individuals with big brains have begun to use blockchain technology to issue these tangible assets on the chain to achieve more convenient circulation.

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