# SparkDAO Industry Observation丨What happens to web3.0 in the second quarter?

By [SparkDAO](https://paragraph.com/@sparkdao) · 2022-04-15

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SparkDAO is an investment research group focusing on the field of digital encryption, with members distributed all over the world. We are keen to explore the underlying logic and cutting-edge tracks in the field of digital encryption. Welcome to our Twitter: sparkdao\_io

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The first three months of the year are very tedious.Between the decline in the crypto market and the global crisis, it's hard to see where Web3.0 will go for the rest of the year.However, the market is as always full of possibilities.

Hotspots tend to reverse when people surrender to the market and come to accept that the bear market has come.We see some promising Web3.0 projects emerging and the direction of the industry is becoming clearer.

### L1 public chain wide grain accumulation

During the recent market decline, we have seen the L1 public chain as the most resilient web3 project.In the past year, most of them still performed well. Even in the continuous rising return cycle that BTC can not maintain, many L1 projects stand out.

This is not without merit.Many analysts underestimate the need for diversity in public chains.As more people use decentralized platforms for transactions, generating passive revenue and buying NFT, the demand for L1 will only increase.Users queue up to add their transactions to the next block of the blockchain. So the competition in the public chain will not stop very soon.

Whether the old or the new L1 public chain.Head winners like AVAX, FTM and Luna may continue to rise.And older players like Polygon, Solana and BSC seem to have been struggling at the bottom for a long time.At the same time, a lot of capital is betting on newer blockchain ecosystems, such as Near / Aurora, Ethereum L2 solutions, Polkadot's parachain and Cosmos ecosystems.

### NFT scarcity frenzy

The NFT provides digital commerce with what the Internet lacks: scarcity and authenticity.Scarce mentality is a human instinct.The NFT provides the possibility of scarcity and authenticity for digital goods. NFT is not the only way to create scarcity and authenticity online, but blockchain technology is evolving.

The NFT is effectively addressing numerous environmental and security issues.Therefore, the current implementation of NFT may not be the best approach, but they are a potentially least cost way to provide trusted scarcity and authenticity online, opening up new prospects for digital commerce.

### The future is not only multi-chains, but also cross-chains

There is a lot of debate around cross-chain bridges.After many cross-chain hacking attacks and money theft, many began to question the need for cross-chain attacks.But the future will be made up of many public chains, and the cross-chain is the historical trend.Every blockchain is a civilization.No problem in human history can prevent humanity from seeking wealth across borders to foreign lands.

By the end of 2022, I expect that web3 citizens will also migrate to more civilizations, but this pursuit of values and wealth is happening on a different blockchain. While Web3.0 has recently suffered from many cross-chain bridge-related hackers, that doesn't stop people from transferring their assets across chains.

Like the L1 trend, most decent cross-chain bridges will have their own market share and users.Users may have many reasons to consider using different bridging schemes.To be honest, the encryption that is not the best technology is always a winner.User experience, on-chain reputation, functionality, low cost and additional incentives are some of the factors that users will consider before choosing a cross-chain scheme.

### Mature projects are increasing

From an investment point of view, this means that "for the virgin chain bridge, everyone will be on a clear rise".As the encryption field matures, I feel the demand for mature projects.People began to value the following points, rather than short-term price increases or unsustainable liquidity mining.Including: 1) sustainable income of passive income; 2) security; 3) narrative attributes independent of market conditions; 4) stability of technology and operation; 5) irregular innovation surprises.

Recently, DeFi 1.0 protocols like AAVE and Balancer are to revived and this is not expected to stop soon.This is not just DeFi 1.0.As long as they can meet these points, both old and new blue-chip agreements will gain loyal users and investors.

In Web3.0, it seems that all cycles are short.But beyond market noise, real innovation trends are brewing and continue to grow regardless of sentiment.We try to look at things in the big picture and figure out what this trend is.

\*The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of SparkDAO. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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*Originally published on [SparkDAO](https://paragraph.com/@sparkdao/sparkdao-industry-observation-what-happens-to-web3-0-in-the-second-quarter)*
