# Q1 2022’ Report Notes

**Published by:** [Scuuu](https://paragraph.com/@scuuu/)
**Published on:** 2022-01-02
**URL:** https://paragraph.com/@scuuu/q1-2022-report-notes

## Content

Noted Picks for Q1 (and beyond) 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). Takeaways from ‘2022 main trends’ Continued trend in multi-chain DEFI Modular blockchain architecture closer to mainnet Emergence of *successful* play-to-earn economies Everyone <> Metaverse Devs in Crypto 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! Layer 1s and IBC 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) Modular Blockchain and ETH 2.0 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 Play-to-Earn 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 Quarter 1, 2022 Playbook 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 Portfolio Allocation 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 Thoughts on other majors 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 Other plays not mentioned: 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 Some BOLD predictions for 2022 that piqued my interest: 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 🚜

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