Overview: DeFi

DeFi: Since the rise of its concept, we have experienced a vigorous round of construction cycle, which has given birth to different branches such as: Dexes, Lending, CDP, Cross Chain, Yield Aggregator, Leveraged Farming, Prediction Market. In 2023 we see the rapid rise of Liquid Staking, RWA, Derivatives and other sub-branches. We predict that the overall DeFi scale will continue to grow in 2024, but the differentiation effect has become increasingly prominent.

Dexes: The top agreements in the field will still maintain their leading position, unshakable.

Lending: We see that the new full-chain protocols led by Radiant are challenging the established protocols on the city walls. The TVL of the two is still far behind, but we are optimistic about the innovation it represents. Would love to see how the follow-up progress of both parties will proceed.

CDP: The entire field took the big ship of ETH to Pos mechanism and completed a self-upgrading systemic update. MakerDAO turned to RWA. Liquity, Prisma Finance and Lybra Finance are still sticking to the road of decentralization. We predict that when macro policy shifts to the interest rate cut cycle, MakerDao will have to adjust its structure again due to the reduction of Treasury bond yields.

Cross Chain: LayerZero recently updated its V2 architecture, further enhancing its once-controversial decentralization features. While competitors like Chainlink and PYTH are catching up, LayerZero's first-mover advantage and friendly developer experience serve as a moat, and we believe LayerZero will continue to maintain its leading position.

Yield: The most exciting is Pendle, where Beefy was a successful multi-chain aggregator before, but Pendle's high capital efficiency has forced the entire Yield category of projects to complete new systemic upgrades.

Liquid Staking: There is no doubt that the Pos mechanism of ETH has turned, which has led to the rise of Liquid Staking. We expect to continue to grow in the future. We compare ETH as a supercomputer to an expanding universe, and what fills the inflation rate is the positive externality adoption rate brought by more and more scenario-based L2 and ETH itself. This will support the entire crypto market's native Treasury yield cornerstone. And CDP based on Liquid Staking collateral has its own income attribute.

RWA: The real world will inevitably continue the monetary easing cycle (if you disagree, you should also deny $BTC). And we think RWA brings two points of thinking: 1) return the yield that belongs to the user itself to the user. 2) or just a new TradFi-DeFi bridge?

Derivatives: We think the last piece of the puzzle for DeFi is Derivatives. We don't think the existing Derivatives agreement is the final product form, but the real yield generated by GMX is a great industry advancement. Please be kind to your users!

Outlook Overview: DeSoc, Depin, DeSci, DeAi

DeSoc: Let's focus on the [ social ] word itself, which is essentially a vehicle for people to communicate with each other. The financialized nature of any magic reform will lead it into other vicious circles. When Brown's heart stops beating, the product will face death. We are sad to predict that the final successful product in the DeSoc field may not be crypto-native (Nostr?), maybe full decentralization of telegram or DC?

DePin: Depin still needs more proof of the viability of its flywheel. The good news is that with the launch of Helium Mobile, he has realized the strategy of earning revenue from the B end to the C end. The increase in mass adoption will greatly expand the operation of its flywheel effect. We also see a highly compatible intersection of Depin and DeSci, see DeSci's forecast for details.

DeSci: DeSci currently sits in its infancy stage, but it is predicted that it will have a stronger real-world social impact than DeFi. It is expected that one or several blockbuster drugs will be developed in the blockchain field in the next few years. DeFi disrupts financial monopolies and benefits developing countries. On the other hand, DeSci disrupts the scientific research monopoly and benefits global citizens. Healthcare is the leading field for improving the quality of people's health services, and historically, the pursuit of immortality has never ceased. This is a topic that will always be relevant and highly interesting. At present, there are more science-based methods available for longevity: molecular nanotechnology and synthetic biology. The COVID-19 pandemic is the tipping point that finally forces the scientific research monopoly to be released. In the foreseeable future, a decentralized healthcare process is expected to be realized, including diagnosis, monitoring, treatment, assistance, prevention and transmission control, and surgery. A distributed diagnostic center would lead to faster response times and a diagnostic database with ZK privacy would facilitate the availability of drug prescriptions. The addition of smart medical sensors, wearables, and various Internet of Things devices will enable DePin and DeSci to cross at a Schelling point. A decentralized DeAi (computing power center) will truly unleash the beauty of its computing power, with its low threshold and ease of use, enabling distributed analysis and artificial intelligence processing and enabling the productivity of researchers to increase by N orders of magnitude. The pace of technological development often exceeds our predictions. In our lifetime, we can boldly predict the lifespan of human beings. With this intersection of DePin, DeSci, and DeAi, we can potentially extend lifespan and achieve immortality. We have dedicated 100% of our time and effort to the construction of related fields, hoping to accelerate its development.

$BTC

1) We need more BTC to be invested in the Lightning Network to increase the channel capacity. At present, the total TVL of Wrapped BTC is $6B. We can integrate the BTC entering the Lightning Network with the DeFi financial system. There is a potential $6B that can be transferred to the Lightning Network. We have seen projects such as Stroom being built.

2) Are we expected to see BTC in the central bank reserves of first tier countries in 2024?

3) If point 2 is achieved, then the utility of stablecoins for instant settlement via the Lightning Network is expected to be fully extended to the real world, such as shops and chain convenience stores. Centralized stablecoins such as USDT, USDC, and decentralized stablecoins do not have the instant settlement characteristics of the Lightning Network, or will we see them integrate with the Lightning Network in some way?

Conclusion: Cryptocurrency is no longer a single financialization reform. We see that the decentralized nature is swallowing the whole old world step by step. We are looking forward to what will happen in 2024. What is the change? Today is better than yesterday! Let's welcome a better tomorrow together. We love this beautiful world and open the gates of eternal life before departing.