Generally speaking, the lower the rank/market cap of a crypto relative to its peers in the same category, the more room it has to grow if you believe it to be mispriced for example. ETH/BTC are the two largest cryptocurrency by market cap and so the aim is to try to outperform both (with the expectation that their marketcaps mean less room for growth).
Continued trend in multi-chain DEFI
Modular blockchain architecture closer to mainnet
Emergence of *successful* play-to-earn economies
Everyone <> Metaverse
Talented web2 developers jumping over to web3 companies/projects
Languages more non-crypto native and traditional developer friendly being used
Blockchain infrastructure is overlooked and is a space for developers to grow
Infura for Ethereum <> AWS
Pocket Network!
Solana
SBF and Alameda backing
Protocol innovations allow really fast transaction processing (resulting in a v.good end user experience)
EVM Compatibility soon?
Pyth Network. The oracle for Solana has prominent backing from TradFi
Critique has been connection to VCs and Billionaires, Could also be seen as open endorsement
Avalanche
Strongest EVM chain
Best user experience out of all L1s
Potential for future subnets with different VMs makes it a standout among L1s
Blockchains deployed within their own subnets with 4k tps (transactions per second) sub-second finality
Terra Luna
The only blockchain with a native decentralised stablecoin
Built on the Cosmos SDK
Focuses on its stablecoin development and developing connections with dApps connected to other Cosmos chains
Best Tokenomics of any L1; as stablecoin tokens demand increases Terra native token is burnt to keep the peg at $1
Market cap only $10B (Comparatively cheap)
Strong cross chain partnership developing (Solana, Near, Harmony Protocol)
Zs favourite play of the larger L1s going into 2022
Cosmos
Most misunderstood ecosystem in crypto space
Designed from the begin with the idea of decentralisation and modularity
Chains are built with this chains SDK
Cosmos chains are connected by IBC
Should see an increase in usage with the ETH <> IBC bridge being setup
H1 this year include Umee, Shade protocol and Astroport as a first test (ones to watch)
Execution, data availability and consensus, and settlement - The three layers of monolithic blockchains
Modular blockchains aims to take each of these as specialized chains
Monolithic blockchains are susceptible to bottlenecks when user growth accelerates so scaling crypto is going to require modularity
Market reflects the sentiment by the growth in other L1s and their usage
Eth is a monolith moving towards modularity
The roadmap is to utilize ETH as a settlement and data layer with L2 scaling solutions to handle transactions (zkrollups and optimistic rollups)
Favourite project focusing on the data availability layer is Celestia
Axie Infinity
First crypto asset to create an in-game ecosystem that millions of users interact with every day
People in the Philippines were making more playing the game than their actual jobs
How are these ‘in-game’ economies kept profitable long term is the questions
NFTs
We saw a lot of growth in 2021 around NFTs
Next we should see NFTs which provide utility to users
The possibilities for NFTs are only at surface level atm with 2022 expecting to bring out a lot of definitive players in the scene long term providing real value
DefiKingdoms - The 🐐
Project most bullish on for 2022 (me to homie)
Defi + NFTs + Multichain
Competing for Axie on in game volume with a fraction of the user base
Decentralised exchange & NFT PVP game with quests, heroes, summons (PVP coming soon)
Liquidity providers are given the majority of the initial token distribution (no early VCs or seed rounds)
Active players on harmony will receive airdrops
Combination of:
Layer1s
Layer 2 Scaling Solutions
Blockchain Middleware Infrastructure
Defi + Metavers plays
Largest positions Q1:
Jewel LPs
Near Eco
Cosmos Eco
$Near ecosystem and its 800m fund should do v.well
Cosmos has many development milestones in Q1
Blockchain Infrastructure and middleware are among the least spoken about sectors
Pocket Network
Arweave
Aleph.im
If wrong on how bullish 2022 should be the best hedge is to short Bitcoin/Ethereum on resistance within the current range
Layer 1s / Layer 2s
NEAR Protocol
Sharded Proof of Stake layer 1 blockchain
No media hype as of yet
Focused on usability
Feed abstracted away from users and allows for a smooth onboarding via further abstraction around the confusing parts of blockchains/wallets etc
Aurora
High performance EVM built on the Near Protocol Blockchain
Most activity on NEAR is on AURORA as of now, this will change with the utilization of the $800m fund
Octopus Network
Multichain network to create appchains which utilize the network for security
Set of smart contracts within the Octopus Relay on the Near Blockchain
Structure similar to Polkadot with much less fees
Will be IBC compatible soon
Has a lot of potential upside for multichain collaborations
Metaverse / Defi
Defi Kingdoms (JEWEL - 🐐)
At its core it’s decentralized exchange on the Harmony ONE blockchain
User can provide liquidity and earn between 400-600% APR
Fair community launch, no VCs or seed round
37% / 63% unlocked to locked rate for JEWEL earned via providing liquidity (Currently. APR eventually drops and the unlocked rates increase with each Epoch passed)
LPs (Liquidity Pools):
Jewel-Matic
Polygon/Matic is the leading research team building zkRollups for ETH 2.0
Monthly Chart ATH close
Consolidation for second half of 2021 after breakout above previous yearly all time highs in May
Jewel-Avax
Detailed earlier
Jewel-Luna
Detailed earlier
Blockchain Infrastructure
POKT Network
Decentralized relay for blockchain API requests
“Uber for servers”
Incentivizes node operators by paying them when devs use their network
More developer join network -> more node operators earn bank -> More node operators join the network
Cheaper experience overall for devs as there’s no centralised overhead for costs
One of the most efficient bets on builder growth, user growth in the crypto space
Arweave
Decentralized network focused on permanent data storage
The storage solution for Solana
ALternative to AWS data stores
Bets on infrastructure like this that many application will use/need >>
A more scalable solution than some of its counterparts like Filecoin
AR/FIL could be a good pair to look at for the year
Technicals:
Consolidating over previous year all time highs from may
Re-accumulation before expansion upwards? Could happen soon
Lido
Multichain staking solution
Stake tokens, receive tokens that represent collateral, use these tokens across other DeFi ecos
Not much competition and is a first move with speed of execution on other chains
Technicals:
Close to all time lows / testing major support
Devs are deving well and haven’t received the attention they should
Aleph.im
Decentralized distributed cloud platform
Compute services, file storage, database hosting
Indexing solution for Solana blockchain
Partnered with Ubisoft for their AAA game
Partnership with Neon Labs (Focused on bringing the EVM to Solana)
Will use Aleph.im as their indexing solution
Cosmos Ecosystem
ATOM
Native token of the Cosmos Hub
Connects all blockchains built with the Cosmos SDK via its inter-blockchain communication protocol (IBC)
Focused on connecting all Cosmos ecos together
With interchain staking, stakers of ATOM will not only secure the network for the Hub but all smaller Blockchains connected through IBC
Paid out in ATOM AND receive rewards as antive tokens from all other blockchains on Cosmos
LUNA
Strongest Alt in 2021
Focused on building out its DeFi eco & connecting to the rest of the Cosmos eco through IBC
UST growth should accelerate in 2022
Positioned well for the developing multichain world
SCRT
Layer 1 blockchain focused on programmable privacy
Top performer in Q4, relatively low market cap by peer comparison
Should grow loads as an ecosystem in 2022
Shade protocol incoming as defi hub, Stash Network for NFTs
Defi users <> Privacy
ANT
Focused on providing groups with the tools/infra to build their own DAOs
Becoming commonplace and expected to expand in 2022
NFTs
Treeverse
Strange Clan
Aurory Project
SOL (Solana)
2 Catalysts in Q1
Phantom mobile wallet
Neon Labs EVM-compatible implementation
Better r/r plays than Sol for Q1 considering it’s market cap
Technicals:
Current range is re-accumulation before more upside
Sentiment on Sol DeFi at peak lows
Top Sol Project WILL outperform SOL (See recent hackathon for potentials)
Plan is to roll profits into SOL as these catalysts start to appear later in the Q/year
AVAX (Avalanche)
Main catalysts for Q1 is Defikingsoms CrystalVale expansion
Has outperformed most other chains for second half of year in terms of user onboarding
AVAX/Crystal pool after Single-Staking JEWEL as largest Q2 positions
BTC (Bitcoin)
The riskiest asset for non-crypto natives BUT considered the risk-off asset for those in Crypto
Bitcoin Dominance as a metric for risk on/risk off
Q4 BTC Pushed it’s all time high twice
All BTC breakouts have aligned with a local low on the ETH/BTC pair
TradFi warming up to BTC -> Long term BTC holders warming up to Alts
Holds value as a long term multi year investment so always keep/build the stack but it’s better served to hedge downside during bull markets
Expectations:
BTC ranges between 42-53k
Most bearish scenario is a 42k break nd potential 27k rest (The absolute floor scenario)
Likely scenario is a range in this area before push for new ATH
ETH (Ethereum)
By midyear ETH should be what it considers a functioning modular blockchain stack
Interesting to see if alternate L1 users will use rollups once rolled out over the chains they’re currently used to
Unlikely ETHs scaling solutions take this market share from other L1s that have onboarded non crypto users (Unless UX is vastly different/improved)
New retail chasing 100x aren’t using Ethereum or won’t be using it as much for a variety of reasons (cost, speed, opportunity at present on other L1s)
The claim to fame of security and decentralization isn’t a good enough sell to onboard new users
This may attract non crypto boomer but won’t attract a large portion of new users/investors
Reasoning on why it isn’t a great trade
Market cap MUCH larger than other monolithic L1s with the worst UX of them all
L2s that perform best will have tokens available from Centralized exchanges
Holding these tokens should outperform holding spot ETH
ETH is not optimized for modular architecture
ETH present day is a monolith pivoting towards a settlement and data availability layer with rollups for execution layer
Celestia as a team arte focused on being a data availability layer and were built for this from the ground up
NEAR similarly has been built from the ground up with one thing as their focus
Once ETH transitions to a settlement layer some of its market share will be taken by other parts of the ecosystem. Expect more value to go to these other layers as they’re starting from 0
Future of DeFi will be multichain!
More likely we have multi chain eco of networks all functioning together than one solution working well with all others failing
Curve Wars: CV / CRV / YFI / BTRFLY
SYS+MUTE
Spell & MIM + Sushi
FXS
INV
GMX / dYdX / PERP / MNGO / DRIFT Protocol
DPX / RBN / PsyOptions
Dusk Metis
Magic (TreasureNFT) Ninja on SOl
Levana Protocol
DeFi Kingdoms in Top 10 by market cap 👀
SOL-DeFi outperforms SOL by a wide margin 🤌
SoLunAvax flips ETH and stays there 🚀
ATOM $100B+ Market cap (Sorry wut ?!)
DeFi Options gain a lot of traction 🚜