Insights into the Crypto Assets Industry After Token2049: Structural Shifts in Mainstream Narratives

After the Token2049 event, cryptocurrency entrepreneurs and practitioners from around the world gradually left Singapore, and the city's crypto atmosphere returned to calm. During this intensive period of communication and discussion, I had some new thoughts on the narrative of the new cycle.

This year, the overall structure of the Crypto Assets industry has been further improved:

1. Omnichain remains the most dazzling narrative of Layer 0

A certain interoperability project not only defines the full-chain interoperability of the ultra-light node model but also establishes a new standard for Omnichain Fungible Token(OFT). OFT provides a more user-friendly and efficient solution for cross-chain transfers, including two versions: v1 and v2, with v2 supporting non-EVM chains. Additionally, there are standards OFNT721 and OFNT1155 that support Omnichain NFT.

Multiple projects have adopted this OFT standard, such as a certain Layer2 project, a certain stablecoin project, and a certain CDP protocol.

2. Layer1 is no longer the main narrative of this cycle.

During this cycle, there are differences in the industry regarding Layer 1 projects. The Move-based new public chain has garnered some attention, but whether it's a new public chain focused on DeFi or NFTs, or a public chain that supports multiple programming languages, it seems that none have gained widespread consensus.

Many people no longer believe that a new public chain will emerge that can surpass Ethereum. Even if they think that Ethereum may not be the endgame, they are unwilling to focus their investments in the new Layer1 direction. Of course, there are still some institutions that continue to invest in new Layer1 projects.

3. The Layer2 landscape is basically determined, and the middleware is ready.

Optimistic Rollup is mainly led by two major projects, while the first tier of ZK Rollup/zkEVM includes several well-known projects.

The middleware supporting ZK Rollup/zkVM is also in place, mainly including:

• Sequencer: There is a widespread call for a decentralized Sequencer network in the industry, with several leading projects already in place.
• Prover: There are already multiple projects focusing on different types of ZK Proof.
• Hardware Accelerators: To address the issue of zkp generation speed, targeted hardware acceleration projects have emerged.

4. The middleware track is not short of cash cow projects

After ETH2.0, the LSD track has become the second "cash cow" business following Bitcoin PoW mining. Under the Ethereum PoS mechanism, the annual output value of Staking is approximately 680,000 ETH. This track has seen the emergence of multiple high-quality projects.

Due to the MEV-Boost proposed by a certain project as a practice of PBS, the MEV track has begun to rehearse the future benefit distribution mechanism before the implementation of Danksharding.

5. High Yield Rates Give Rise to LSDFi and RWA Application Opportunities

ETH Staking returns have become the "Treasury bond yields" of the Crypto Assets industry, and LSDFi further enhances the yield for ETH holders. Currently, the annualized yield for Ethereum PoS is approximately 3.6%. After the Shanghai upgrade, ETH Staking can basically be exited at any time, increasing the confidence of long-term holders to participate in Staking.

The LSDFi applications derived include stablecoins supported by LSD, interest rate swap agreements, etc. At the same time, the higher yield of U.S. Treasury bonds has also driven the development of RWA projects.

6. Aiming for large-scale applications, lowering the user experience threshold has become a fundamental requirement.

In this round of cycles, the user service layer has seen multiple innovations, with the common goal of lowering the user experience threshold and ultimately achieving large-scale application.

The intent-centered project aims to address issues such as the difficulty of protocol usage and maximizing user benefits. TGBot, as one of the practical applications of Web3+AI, is also committed to lowering the threshold for user experience.

7. Crypto Assets and AI Combination Becomes a Hot Topic

During this Token2049 event, several projects combining Crypto Assets and AI emerged, mainly including:

• On-chain interaction automation
• To Earn mode empowers AI business
• Web3 version conversational AI
• ZKML( Zero-Knowledge Machine Learning)

As an important hub connecting the East and West, the Token2049 event in Singapore attracted over 10,000 attendees. Most major projects participated, with service-oriented projects mainly taking part in the main venue exhibits, while narrative projects often held Side Events.

Despite the challenges faced by the industry, continuing to build remains the mainstream consensus.