CGV summarizes a week of significant investment and funding information in the crypto market, from February 20, 2023, to February 26, 2023, in the global crypto market.

[Infrastructure]

1.Chaos Labs| Seed round financing of $20 million | Led by Galaxy Digital

On February 21, Chaos Labs, a blockchain security agency, announced the closing of a $20 million seed round led by PayPal Ventures and Galaxy Digital, with participation from Coinbase, Uniswap, Lightspeed, Bessemer, and angel investors including Balaji Srinivasan and Naval Ravikant, among other angel investors.

2.Intu | Pre-Seed round financing of $2 million | Participated by Fantom Foundation, etc.

On February 21, Intu, the Web3 decentralized account management protocol, announced the closing of a $2 million Pre-Seed round with participation from CoinFund, Metaweb Ventures, Fantom Foundation and others.

3. iBLOXX | Financing of $5 million | Led by PrimeXM

On February 23rd, iBLOXX, a Web3 incubator and market maker, announced the closing of a $5 million funding round led by PrimeXM, which will be used to expand the company’s game development division, iBLOXX Studios, bringing the post-investment valuation of its game division to $30 million.

4. Chain Reaction | Financing of $70 million | Led by Morgan Creek Digital

On February 23rd, Chain Reaction, an Israeli blockchain chip startup, closed a $70 million funding round led by Morgan Creek Digital.

5.OneKey | A+ round financing of $85 million | Led by IOSG Ventures

On February 23, OneKey, a hardware wallet company, announced the closing of its Series A+ funding round at a valuation of $85 million, led by IOSG Ventures.

[Game]

6.Azra Games | Seed round financing of $10 million | Led by a16z

On February 21, Azra Games, a gaming company, announced closing an additional $10 million seed round led by a16z through its $600 million gaming fund, GAMES FUND ONE, with participation from NFX, Coinbase Ventures, Play Ventures, and Franklin Templeton.

7. Kratos | Seed round financing of $20 million | Led by Accel

On February 23rd, Kratos, an Indian Web3 game company, closed a $20 million seed round led by Accel, with participation from Prosus Ventures, Courtside Ventures, Nexus Venture Partners, and Nazara Technologies, at a valuation of $150 million. And Nazara Technologies.

[DeFi]

8.Affine | Financing of $5.1 million | Led by Jump Crypto

On February 23rd, Affine Protocol, a DeFi yield protocol, closed $5.1 million in funding led by Jump Crypto and Hack VC, with participation from Circle Ventures and Coinbase Ventures.

9.Tsunami.Finance| Pre-seed round financing of $1.3 million | Led by Big Brain Holdings

On Feb. 24, Aptos ecosystem derivative protocol Tsunami. Finance completed a $1.3 million Pre-seed round of financing, led by Big Brain Holdings and Mirana, with participation from Zeta Markets, Hedge Labs, Pontem, Brilliance Ventures, BuilderVC, Marin Digital Ventures, Soju, Switchboardxyz, Coral DeFi, RNR Capital, Aptos Monkeys, and Time Research.

10.Huma Finance | Seed round financing of $8.3 million | Participated by Race Capital, etc.

On February 24, Huma Finance, a DeFi project, announced the closing of an $8.3 million seed round with participation from Race Capital, Distributed Global, ParaFi, Circle Ventures and Folius Ventures, and launch partners including Circle, Request Network and Superfluid.

[NFT]

11.NeoSwap AI | Financing of $2 million | Led by DACM and AngelHub

On February 25, NeoSwap AI, an NFT trading platform, closed a $2 million Pre-Seed round of funding at a valuation of $15 million, led by DACM and AngelHub, with participation from Gossamer Capital, Cavalry Asset Management, Stacks Ventures, Dhuna Ventures, and several angel investors.

[Metaverse]

12.Worldwide Webb | A round financing of $10 million | Invested by Pantera Capital

On Feb. 23, pixelated metaverse Worldwide Webb completed a $10 million A round of financing, with Pantera Capital as its only investor. The funds will be used to enhance Worldwide Webb’s influence, expand its team, and integrate other chains besides Ethereum.

[Web3 Applications]

13.Towns | A round financing of $25.5 million | Led by a16z

On February 23, Towns, a Web3 social app, closed a $25.5 million funding round led by a16z with participation from Benchmark, Framework Ventures and others. towns takes the town square idea and combines community, NFT, and gaming.

About Cryptogram Venture (CGV): CGVCGV FoFCryptogram Venture (CGV) is a Japan-based research and investment institution engaged in crypto. With the business philosophy of “research-driven investment,” it has participated in early investments in FTX, Republic, CasperLabs, AlchemyPay, Graph, Bitkeep, Pocket, and Powerpool, as well as the Japanese government-regulated yen stablecoin JPYW, etc. Meanwhile, CGV FoF is the limited partner of Huobi venture, Rocktree capital, Kirin fund, etc. From July to October 2022, it launched the first TWSH in Japan, which was jointly supported by the Ministry of Education, Culture, Sports, Science and Technology (MEXT), Keio University, SONY, SoftBank, and other institutions and experts. Currently, CGV has branches in Singapore, Canada, and Hongkong.

Crypto Review is not for profit and adopts the recommendation and invitation system. The content covers 1—encryption trends. Pay attention to the technology, management, industry, and even macro factors that will affect the behavior of the encryption industry; 2—overview of the track. Share the latest Overview Research and analysis based on a specific vertical field; 3. Project analysis. Comprehensively and deeply interpret the early dark horse project and star project, and systematically interpret their design concept and mode.

The following is a selection of crypto review articles (January 2023)

【TRENDS】

The Road to One Billion Users of Web3 Applications

initial public publication time: January 26, 2023

Original link：

https://medium.com/@CGVFoF/the-road-to-one-billion-users-of-web3-applications-f616682e1b17

Shigeru Head of CGV Research

CR Recommendation

What are the areas where real Web3 applications that scale to a billion users might be born? The article argues that the underlying value of Web3 lies in its unlicensed and global nature, which provides a free market of unprecedented scale and boundaries. In contrast, the open source code and verifiability of data offer a lower cost of trust for this great free market, and thus prosperity is born. “The success of Web3 applications is based on the digital elements of “freedom” and “trust,” and the verifiability of business logic, all three of which are indispensable. And based on this, it proposes the “Unicorn Growth Index” for Web3 applications.

Block Builder Decentralization is coming, but maybe not so soon

initial public publication time: January 23, 2023

Original link: https://bittokoin.substack.com/p/block-builder-decentralization-is

BallsyAlchemist (@ballsyalchemist)

Invest & research @fenbushi | Advisor @3czX_seA | Intern @internDAO

CR Recommendation

Ethereum strives to be the most censorship-resistant, permission-free, and trust-free blockchain, but any centralization factor can compromise these attributes. How centralized is the current block built, and why do we need to decentralize it? The authors list the main issues such as Exclusive Orderflow, Censorship, Centralization due to network effect, Competitors’ exclusive Orderflow, etc., and explain why some problems are essential and others are not.

【FIELDS】

The Real-World Asset revolution in DeFi: Understanding the Current State & Potential of RWAs

initial public publication time: January 24, 2023

Original link: https://ignasdefi.substack.com/p/the-real-world-asset-revolution-in

Ignas | DeFi Research (@DefiIgnas)

In-depth insight on DeFi

CR Recommendation

The Real-World Asset (RWA) revolution in the DeFi fields is quietly emerging. The emergence of RWA lending protocols has enabled lending outside of the revolving crypto world and opened up the potential for DeFi lending to grow from tens of billions of dollars to a $1.6T TradFi private credit market. This paper provides a detailed analysis of the current state and potential of Real World Assets (RWAs). It shows that authentic asset protocols in DeFi have the potential to revolutionize the lending market and provide new opportunities for investors to achieve higher returns and diversification. It remains to be seen if the new narrative of RWAs will usher in a new summer for DeFi.

Surviving the Perfect Storm: 2022 End of Year Mining Report(Excerpt)

initial public publication time: JANUARY 25, 2023

Original link: https://www.galaxy.com/research/whitepapers/2022-end-of-year-mining-report/

Brandon Bailey (@bitcoinbeezy)

Mining Associate at Galaxy Digital

Brandon focuses his time on research, strategic investments, and special projects. Previously, he was the Director of Multi-Family real estate acquisitions and investments at Kettler.

Simrit Dhinsa

Mining Analyst at Galaxy Digital

Simrit is an Analyst on the Mining team. Prior to Galaxy, he worked at Citigroup as an Analyst on the US Treasury trading desk and then Agency CMBS trading desk. He graduated from Carnegie Mellon University with a major in Finance and minor in Computer Science.

Guillaume Girard

Mining Analyst at Galaxy Digital

Guillaume is an Analyst on the Mining team. Prior to Galaxy, he worked at the Bitwise Asset Management Research desk with the responsibility of covering publicly traded miners. In addition, he worked at the Cambridge Centre For Alternative Finance, helping to develop their CBECI index and comparison page. He also worked for the Analyst Program at Messari.

CR Recommendation

This 2022 crypto mining industry report by Galaxy Digital not only does it address the dilemmas facing the capital markets and miners/mining companies in 2022 and the various strategies they are taking to increase their earnings, but more importantly, it lists new opportunities and trends in the bitcoin mining industry in 2023. Notably, the report notes that miners could consider lightning networks as a way to earn additional revenue from their bitcoin holdings. This is because lightning networks offer the opportunity to generate bitcoin-denominated earnings with minimal counterparty risk while also helping to support the broader bitcoin ecosystem.

【PROJECTS】

Big water feeds big fish, why LSD is a $100 billion business volume track

initial public publication time: January 20, 2023

Original link: https://medium.com/@basicscapital/basics-capital-big-water-feeds-big-fish-why-lsd-is-a-100-billion-business-volume-track-5b4fcdb55a93

Tim

Invest & research @@BasicsCapital

CR Recommendation

The LSD (Liquid Staking Derivatives) section has performed very well under the shadow of the bear market in the venture capital market amidst the macrocycle of global monetary tightening. As a DeFi derivatives track that grew up with the ETH 2.0 upgrade, LSD has not formally entered the mainstream DeFi vision before, but with Lido’s TVL surpassing MakerDAO to leap to the top of the DeFi list and the asset size of RocketPool, Stakewise and other products expanding, LSD will grow into a $100 billion business volume race track. This article systematically introduces the LSD track panorama from the current pledge status of the ETH 2.0 market, the working principle of LSD protocol, the development of LSD track, the ecological opportunities of LSD track: DVT and Restaking technology, etc.

A comprehensive explanation of the AAVE protocol native stablecoin GHO

initial public publication time: January 27, 2023

Original link: https://pt1mfv.notion.site/GHO-AAVE-Stablecoin-18b4d7e7981a4a01b191cee059c1acd5

Paul Timofeev (@pt1mfv_)

Community Lead of Web3Lab, Enthusiasts for blockchain and decentralized applications

CR Recommendation

In 2022, the GHO stablecoin was first introduced at the AAVE Governance Forum, sparking huge interest across the DeFi industry. There is no doubt that the launch of such a decentralized, collateral-backed, and USD-pegged AAVE DAO-native stablecoin idea by AAVE, the top lending marketplace in the Defi ecosystem, makes a lot of sense and has led to the protocol-native stablecoin being seen by many as an important emerging narrative for 2023. This article analyzes the mechanics of AAVE’s upcoming protocol-native stablecoin, GHO, and its impact on the AAVE protocol and the DeFi ecosystem. Can the GHO stablecoin help AAVE surpass MakerDAO and DAI? the answer may be this year.

Download: https://www.cgv.fund/file-share/284ee330-748b-4715-85c1-e1e5af69f4c5

About Cryptogram Venture (CGV): CGVCGV FoFCryptogram Venture (CGV) is a Japan-based research and investment institution engaged in crypto.With the business philosophy of “research-driven investment”, it has participated in early investments in FTX, Republic, CasperLabs, AlchemyPay, Graph, Bitkeep, Pocket, and Powerpool, as well as the Japanese government-regulated yen stablecoin JPYW, etc. Meanwhile, CGV FoF is the limited partner of Huobi venture, Rocktree capital, Kirin fund, etc.From July to October 2022, it launched the first TWSH in Japan, which was jointly supported by the Ministry of Education, Culture, Sports, Science and Technology (MEXT), Keio University, SONY, SoftBank, and other institutions and experts. Currently, CGV has branches in Singapore, Canada, and China. and China.

As a research and investment institution in the crypto and Web3 industry with compliance qualifications approved by Japan, Cryptogram Venture (CGV) has always adhered to the research-driven investment” business orientation. Since its inception, CGV has taken advantage of its location and business hub in Japan to explore and help more innovative crypto projects across the world by actively participating in extensive research in the primary crypto market, organizing the first Web3 hackathon in Japan (web3hackathon.io), and delivering high-quality industry research reports (cgv.fund/blog).

Since 2020, we have witnessed the rise of DeFi, the emergence of NFTs, the popularity of GameFi, the nationwide pursuit of Metaverse, the implementation of Layer 2, the madness of the new public chain, etc. These narratives in different fields facilitate the national quest for encryption. According to Steve Chiu, founder of CGV, “It is crucial for crypto practitioners to discover and anticipate the new narrative of the future to make response and layout in advance.”

It is precisely based on the professional trend research and accurate cycle prediction of the encryption industry that CGV has successfully participated in the early stages of projects such as Republic, CasperLabs, AlchemyPay, The Graph, Bitkeep, Pocket, and Powerpool, as well as the yen stable currency JPYW under the supervision of the Japanese government. Invest and get rich investment returns.

In 2022, CGV invested in dozens of crypto projects and made extensive layouts in critical fields such as Metaverse, games, and NFT. Typical projects include:

Metaverse field

l SkyArk Chronicles: a multi-Metaverse inspired by Japanese anime. It develops the story around the fantasy world created by Satoshi Nakamoto. It has monsters and heroes in fantasy and urban areas to immerse players in the fantasy game world, such as Legends Arise, House of Heroes, and Re: SkyArkVerse.

l SecondLive: it builds a center for Metaverse residents, where more than 1 million users gather to express their views, give full play to their creativity, build a parallel universe in their dreams, and establish a Web3 open Metaverse that serves 1 billion people with the content generated by UGC and AI.

l HALO: It cooperates with 3D artist communities to realize the value exchange with the natural world through the original economic system and brand effect. In HALO, characters are static images and avatars of ourselves in the virtual world, connecting the virtual world with the real one.

Game field

l Avalon: an MMORPG Metaverse game involving P2E (play to earn) economic model and content creation tools.

l PIAS: an agriculture-based simulation game with the theme of the human renaissance. It integrates digital and physical elements and can exchange the in-game items (NFT) obtained by players through the game for crops in the real world.

l Bedlam: an electronic sports game center, a platform for creating and hosting personal game identities (performance statistics and content) for Web3 games. Users can participate in leagues or tournaments and follow their favorite teams.

l Orbler: a tower defense game driven by P2E (play-to-earn) model that requires clever thinking and planning to achieve victory. Players become Orblers, defend personal areas, and fight with enemies using orbs.

l Mechaverse : a mecha game from Japan. It is committed to building the world’s first real-time strategic mecha game platform. The cultural background of modern Japanese mecha anime and ancient samurai armor inspires the project.

NFT field

l UneMeta: a leading NFT incubation platform, trading market, and social space. It is committed to creating a safer, more convenient, and better NFT participant experience for NFT players, with numerous high-quality IP resources, mature NFT operation mode, and solid technology and community infrastructure.

l BBC Protocol: a computing power service platform integrating Bitcoin computing power distribution and Bitcoin multiple financial derivatives. It aims to build the next computing power Metaverse with NFTs. It cooperates with many large Bitcoin mining pools, mining machine manufacturers, mining plants, and power suppliers worldwide to provide users with systematic BTC mining and financial derivatives value-added services.

l Multiverse Play: a decentralized NFT post-investment management platform that connects users and assets of Web3, including players, NFT holders, guilds, and developers. Additionally, it provides them with intelligent matching, task scheduling, asset management, and high liquidity.

Infrastructure field

l Celestia: the first modular blockchain network with pluggable consensus and data availability layer. It enables anyone to quickly deploy a decentralized blockchain without the expense of bootstrapping a new consensus network.

“After the shakeout in 2022, the future crypto digital asset market will gradually undergo the transition from ‘wild growth’ without the need for permits to ‘rational prosperity’ with regulatory compliance”, said Steve Chiu. In 2023, CGV will constantly explore popular Web3 fields such as Blockchain Infrastructure, Metaverse, NFT, DAO, SocialFi, GameFi, and DeFi. Additionally, CGV will pay constant attention to innovative trends such as wallet infrastructure, innovative stablecoins, Web3 mobile products, zero-knowledge proof, soulbound tokens, and fully on-chain games to help more outstanding projects have a smooth start and achieve sustainable growth and development.

Cryptogram Venture (CGV) is a Japan-based research and investment institution engaged in the crypto industry. With the business philosophy of “research-driven investment,” it has participated in early investments in Republic, CasperLabs, AlchemyPay, the Graph, Bitkeep, Pocket, and Powerpool, as well as the Japanese government-regulated yen stablecoin JPYW, etc. Meanwhile, CGV FoF is the limited partner of Huobi venture, Rocktree capital, Kirin fund, etc. From July to October 2022, it launched the first Tokyo Web3 Summer Hackathon (TWSH) in Japan, jointly supported by the Ministry of Education, Culture, Sports, Science and Technology (MEXT), Keio University, SONY, SoftBank, and other institutions and experts. CGV has branches in Singapore, Canada, and the Chinese mainland.

Website: cgv.fund

Twitter: https://twitter.com/CGVFOF

Project contact: Yurinatyou@cgv.fund

【Infrastructure】

1.BlockJoy | Raised $12 million｜Gradient Ventures and others participated

On February 3, BlockJoy, a blockchain node-as-a-service startup, announced that it has closed a total of $12 million in seed and Series A funding with participation from Gradient Ventures, Draper Dragon, Active Capital, Borderless Capital, Tribe Capital, Bessemer, Renegade Ventures and others.

2. Sumi Network | Raised $3 million｜Led by Scytale

On February 2, Sumi Network, a decentralized storage solution, closed a $3 million round of funding at a $30 million valuation led by Scytale with participation from Fuse, D1 Ventures, DFG and TRGC.

3. Sec3 | Raised $10 million in a seed round｜Led by Multicoin Capital

On January 31, Sec3, a blockchain security company, closed a $10 million seed round led by Multicoin Capital, with participation from Sanctor Capital and Essence VC, and individual investors including former ParaFi Capital partner Santiago Santos and Solana co-founder Anatoly Yakovenko.

【NFT】

4. Fungify | Raised $6 million｜Led by CitizenX

On February 2, Fungify, a non-hosted NFT indexing and algorithmic lending protocol, closed $6 million in funding led by CitizenX with participation from Distributed Global, Infinity Ventures Crypto, Taureon Capital, Anagram, Flow Ventures and others.

【Game】

5. My NFT Wars | Raised $2 million｜Led by Social Discovery Group

On February 4, My NFT Wars, a Web3 metaverse game, announced the completion of a $2 million private funding round led by Social Discovery Group, with participation from Nika Tech Family, Blackshield Capital and others.

6. MYSTiC GAMES | Raised $1.3 million｜Led by Shima Capital

On February 2, blockchain gaming company MYSTiC GAMES announced that it has closed a new funding round of $1.3 million led by Shima Capital.

【DeFi】

7. Archimedes | Seed round funding of $4.9 million｜Led by Hack VC

On February 2, Archimedes, a DeFi lending platform, announced the closing of a $4.9 million seed round led by Hack VC with participation from Unassociated Venture, Psalion, Truffle Ventures, Cogitent Ventures, Haven VC and Palsar.

8. Squid | Raised $3.5 million｜Led by North Island Ventures

On February 1, Squid, a DeFi mobility protocol, announced the closing of a $3.5 million funding round led by North Island Ventures with participation from Distributed Global, Fabric Ventures, Galileo, Chapter One, and Node Capital.

About Cryptogram Venture (CGV):* CGVCGV FoFCryptogram Venture (CGV) is a Japan-based research and investment institution engaged in crypto.With the business philosophy of “research-driven investment”, it has participated in early investments in FTX, Republic, CasperLabs, AlchemyPay, Graph, Bitkeep, Pocket, and Powerpool, as well as the Japanese government-regulated yen stablecoin JPYW, etc. Meanwhile, CGV FoF is the limited partner of Huobi venture, Rocktree capital, Kirin fund, etc.From July to October 2022, it launched the first TWSH in Japan, which was jointly supported by the Ministry of Education, Culture, Sports, Science and Technology (MEXT), Keio University, SONY, SoftBank, and other institutions and experts. Currently, CGV has branches in Singapore, Canada, and China. and China.*

With the temporary recovery of the crypto market, Web3 funding and developers in all tracks are active. From last week’s statistics (10 projects in total), Web3 infrastructure projects (5) were the main direction of funding, while the number of funding for NFT (1), Metaverse (1), and Web3 application (3) projects started to pick up. CGV summarizes a week of noteworthy investment and funding information in the crypto market, as follows for January 23, 2023 to January 29, 2023 in the global crypto market.

【Infrastructure】

1. Tribes | Raised $3.3 million in pre-seed round｜Led by Kindred Ventures

On January 23rd, Tribes, a Web3 social wallet, announced the closing of a $3.3 million pre-seed round led by Kindred Ventures, South Park Commons and Script Capita.

2. QuickNode | Series B financing of $60 million｜Led by LLC

On January 24, QuickNode, a blockchain development platform, announced the closing of a $60 million Series B funding round at a valuation of $800 million, led by 10T Holdings, LLC, with participation from Tiger Global, 776, Protocol Labs and QED.

3. Asset Reality | Seed round funding of $4.91 million｜Led by Framework Ventures

On January 25, Asset Reality, a digital asset recovery solution, announced the closing of a $4.91 million seed round led by Framework Ventures with participation from TechStars, SGH Capital and others.

4. Ethos | Raised $4.2 million｜Mysten Labs participates

On January 26th, Ethos closed a $4.2 million seed round led by Gumi Cryptos Capital and Boldstart Ventures, with participation from Tribe Capital, Matrix Port and AllianceDAO, as well as Sui network developer Mysten Labs.

5. Tholos | Raised $1.5 million in pre-seed round｜Led by North Island Ventures

On January 28th, Tholos, a money escrow platform, closed a $1.5 million Pre-seeded round led by North Island Ventures, Lattice Capital, Chainforest and Dispersion Capital, with participation from 369 Capital and others.

【NFT】

6. EZswap | Pre-Seed round of funding of $1 million

On January 26, EZswap, an NFT trading platform, announced that it closed a $1 million Pre-Seed round of funding in October 2022 at a $40 million Token valuation, and that the platform’s code has been audited by security firm Beosin and will go live at the end of January.

【Metaverse】

7. Emperia | Series A financing of $10 million｜Led by Base10 Partners

On January 25, Emperia, a metaverse-as-a-service (MaaS) platform, announced the closing of a $10 million Series A round led by Base10 Partners, with participation from Sony Innovation Fund, Stanford Capital Partners, Daphi, Concept Ventures, Background Capital and others.

【Web3 Applications】

8. Bunzz | Seed round funding of $4.5 million｜gjmp and other participants

On January 25, Bunzz, a Web3 decentralized application development platform, announced the closing of a $4.5 million seed round with participation from gjmp, DG Daiwa Ventures, Coincheck and Ceres.

9. Spatial LABS | Raised $10 million in a seed round｜Led by Blockchain Capital

On January 26th, Spatial LABS, a Polygon Chain-based Web3 wearable technology startup, announced the closing of a $10 million seed round led by Blockchain Capital with participation from Marcy Venture Partners, a venture capital firm co-founded by Jay-Z.

10. StoryCo | Seed round financing of $6 million｜Led by Patron

On January 26th, StoryCo, a Web3 content platform, announced the completion of a $6 million seed funding round led by Collab + Currency and Patron, with participation from Floodgate Ventures, Blockchange Ventures, Sfermion, Flamingo DAO, and others.

About Cryptogram Venture (CGV): CGVCGV FoFCryptogram Venture (CGV) is a Japan-based research and investment institution engaged in crypto.With the business philosophy of “research-driven investment”, it has participated in early investments in FTX, Republic, CasperLabs, AlchemyPay, Graph, Bitkeep, Pocket, and Powerpool, as well as the Japanese government-regulated yen stablecoin JPYW, etc. Meanwhile, CGV FoF is the limited partner of Huobi venture, Rocktree capital, Kirin fund, etc.From July to October 2022, it launched the first TWSH in Japan, which was jointly supported by the Ministry of Education, Culture, Sports, Science and Technology (MEXT), Keio University, SONY, SoftBank, and other institutions and experts. Currently, CGV has branches in Singapore, Canada, and China. and China.

Nowadays, Web3 is no longer an armchair theory or an Internet buzzword. It is perceived by many people as the technological revolution that subverts the Internet.

However, looking around the world, few Web3 applications have a host of users. Probably the only renowned Web3 application with the most users is Bitcoin.

— Jack Dorsey, a former Web3 advocate and Twitter founder who converted the first tweet into NFT, claimed that “You don’t own web3. The VCs and their LPs (limited partners) do. It will never escape their incentives.”;

— Moxie Marlinspike, founder of Signal, an encryption communication application, discovered that Web3 may be a false proposition, after developing two DApps;

— PandaDAO, which raised 1900ETH, started the dissolution process less than one year after its founding, just because “the core work of the community is to vote, and there is no time to do other things”…

Currently, it is fair to say that the world of Web2 is definitely better than that of Web1. Many people wonder if the world of Web3 is better than that of Web2.

It makes no sense without users. The natural selection of users determines the prosperity of the Web3 world or not.

In the Web2 world, Facebook has more than 3 billion global users, YouTube and WhatsApp have more than 2 billion users, and WeChat and Tik Tok have more than 1 billion users.

According to the data of TripleA, a cryptocurrency payment company, there were more than 320 million users of cryptocurrency and Web3 worldwide in 2022, which was about 4.2% of the global population. If we compare the current user volume of Web3 with that of the Internet, we can find that the current development stage of Web3 is roughly equivalent to the Internet in the late 1990s. Andreessen Horowitz (a16z) predicted that Web3 might have 1 billion users in a short time.

So, what are the areas in which applications will attract billion of Web3 users?

Stay away from “pseudo-Web3 applications” dressed in Web3

Discard the false and retain the true. Not all so-called Web3 applications are authentic.

In the field of GameFi, there are many “pseudo-Web3 applications”.

Literally speaking, GameFi, consists of two parts, namely game, and finance. In a nutshell, it means that game players earn cryptocurrency by playing games. Famous GameFi games such as Axis Infinity, DeFi Kingdoms, etc., fail to impress 3 billion game players around the world, and gradually move towards a death spiral with the recession of the encryption market.

Taking Axie Infinity as an example, since 2021, by allowing players to “Play-to-Earn”, it has been advocating that “blockchain games can promote a fairer global economy and provide people around the world with more opportunities”, which has been favored by the market. However, 14 months later, most people stopped playing the game. They generally felt angry, and anxious. Some even lost thousands of dollars.

A healthy GameFi project has a well-established ecological mechanism of internal and external circulation, such as obtaining external benefits through commercial cooperation. As for the GameFi projects that rely on the Ponzi model for user growth, the income earned by early users comes from the principal invested by late users. If the income of the project cannot keep up with the growth rate of the debt, the collapse is only a matter of time.

Similar problems exist in the field of NFT, which is dominated by avatars and profile pictures (PFP).

In the past, PFP was almost synonymous with NFT. When mentioning NFT, you may think of the boring ape head that costs several million dollars a piece. However, without functional support, effective incentives, and healthy circulation of the creator economy, the vast majority of PFP projects have little value, and they only seek the recognition of a group of users to support their value. Compared with the market peak at the beginning of 2022, the overall transaction volume of the NFT market has dropped by more than 90%, the mainstream PFP projects have dropped by 60–70%, and other projects are even more miserable.

The same is true of the once-popular Metaverse projects. Compared to Roblox’s 202M monthly active users, Minecraft’s 141M monthly active users, Sandbox and Decentraland only have 200k and 56k monthly active users, respectively. It seems that Decentraland and Sandbox are overvalued.

It can be said that in addition to the above fields, there are a large number of “pseudo-Web3 applications” in DeFi, DID, DAO, Sociafi, and other fields. They may be the products of the capital bubble or the historical heritage of the technological growth cycle, which cover up the true value of Web3 applications.

It’s time for us to seek the value essence of Web3

From the perspective of the first principles, let’s explore the essence of Web3 to gain insight into its next development direction.

Web3 is generally regarded as the industry form closest to “value Internet”. In fact, Web3 is not a simple upgrade based on Web1 and Web2. Its core is to build a new network with decentralization, value co-creation, and distribution according to the contribution, thus giving users real data autonomy.

So, how should we define “Web3 application”? Based on the views of the industry, CGV Research team reckons that the Web3 application is based on blockchain technology, takes Token as a tool or medium, and addresses users’ actual needs as the starting point to support users’ interactive operations, thus realizing the creation, distribution, and circulation of value.

Obviously, the Web3 application is not a panacea for all issues, nor is it suitable for any scenario. If you develop a Web3 application to cater to the trend of Web3, it will be in vain.

What are Web3 applications suitable for and not suitable for?

This is a question that should be on the minds of anyone investing in Web3. I quite agree with Alex Xu of Mint Ventures that the underlying value of Web3 lies in its unlicensed and global nature, providing a free market with unprecedented scale and boundaries. The open source of code and the verifiability of data offer a lower cost of trust in this unprecedented and prosperous free market.

Therefore, “liberty” and “trust” are the core advantages and essential values of Web3.

In terms of Liberty, it includes the free combination and migration of assets, agreements, identities, product matrices, intellectual property, and other fields; with respect to trust, based on the tamper-proof, transparent and open characteristics of blockchain technology, Web3 has established a new trust relationship different from the traditional trust that relies on justice, violent authority, customs, and culture.

If a Web3 application suitable for a business scenario is not well designed in terms of “Liberty” and “trust” and has no business planning, it will encounter major challenges in future operations.

For example, projects that transfer real assets on the chain (such as synthetic assets, STO, etc.) do not get rid of the original credit system (based on the law, government’s asset identification), so it does work well in Web3 field; as for crypto native Web3 assets, their business flows can all be operated on the chain, which has the dual advantages of Liberty and trust.

In addition to giving full play to Web3’s advantages of “Liberty” and “trust”, the ability to have basic business logic ensures the sustainable operation of Web3 projects.

Looking back at StepN, a phenomenal Web3 application in 2022, although its attempts to solve various issues related to product growth, IPO fundraising and corporate governance with a set of X-to-earn economic models deserve some credit, it encountered a tremendous recession in the later stage. The biggest issue of StepN is similar to that of GameFi mentioned above, that is, the project’s business model is not sound and does not create much extra-ecological value. It turns forward debt (NFT sales revenue) into cash proceeds, weakening the value creation ability of the project.

Therefore, the CGV Research team argues that the success of Web3 applications lies in the digital elements of “Liberty” and “trust”, and the verifiability of business logic, which are indispensable. In this regard, the team proposes the “Unicorn Growth Index” of Web3 applications:

Six types of Web3 projects that have the potential to grow into “unicorns”

1.Mobile crypto digital wallet

Liberty index: ☆☆☆☆

Trust index: ☆☆☆☆

Business model verifiable index: ☆☆☆☆☆

Web3 Unicorn growth index: ☆☆☆☆☆

The crypto digital wallet has two attributes, namely asset account, and identity symbol. The first step for users to access the Web3 world is to create a crypto digital wallet. Whether it is to create an account in a centralized exchange, register a decentralized wallet or purchase a hardware wallet, users need a wallet to access Web3.

In 2009, Bitcoin enabled the existing asymmetric key pair technology to be used to write to the public database, thus creating the first “crypto wallet”; In 2016, MetaMask was officially launched, which opened the door to dApps. It is unlike previous wallets and platforms that focused on interacting with crypto assets such as Bitcoin.

Number of global wallet users from November 2011 to July 11, 2022 (Unit: million) Data source: https://www.statista.com

With the development of crypto assets, wallets have undergone changes in different stages: from single-asset wallets and single-chain wallets to multi-chain multi-asset wallets, from single transfer and collection to blockchain ecological aggregation service platform, which generates mobile wallets, public-chain ecological wallets, transaction platform wallets, asset custody wallets, hardware wallets, identity wallets, and other sub-tracks.

In addition to the traditional business model of attracting users and developing the fund deposit function, crypto wallets provide value-added services (wealth management products, PoS mining, trading, asset aggregation, market information, etc.), as well as advertising and other ways to increase revenues.

We are optimistic about the development of mobile crypto wallets and have the opportunity to become the data flow and distribution platform of Web3 applications, which will ultimately promote the paradigm shift of the entire Web3 track from “wealth creation effect” to “daily application”.

Mobile crypto digital wallets worth attention include:

Metamask: (@MetaMask) 30+ million monthly active users. Lightweight Ethereum open-source wallet is also a kind of APP wallet; It has the function of testing Ethereum smart contract and supporting the most complete Dapp; it can be compatible with hardware wallets such as Ledger and Trezor.

TrustWallet: (@TrustWallet) an unmanaged mobile multi-chain crypto wallet that has more than 58 million users and supports more than 8 million tokens and various gateways to thousands of Web3 dApps.

**BitKeep: **(@BitKeepOS) 8 million users worldwide, the largest Web3 multi-chain wallet in the Asian market, adopts various security mechanisms such as hot and cold separation, offline signature, and supports 80+ mainnets, one-click cross-chain transactions, and other functions.

2. “Play-and-Earn” game

Liberty index: ☆☆☆☆

Trust index: ☆☆☆☆☆

Business model verifiable index: ☆☆☆☆☆

Web3 Unicorn growth index: ☆☆☆☆☆

Just like the importance of games to the Internet economy, crypto games have been regarded as the optimum driving force for the growth of users of the Web3 ecosystem.

Although crypto games have a huge potential market, it is not interesting for most players. Currently, GameFi or P2E (Play-to-Earn) is the most common crypto game. Their biggest advantage is to offer players the opportunity to earn money. But the simple incentive to make money through play is not necessarily a sustainable model. If the cycle is extended to half a year or longer, you will find no successful practice project.

To play Web3 games, we still have to respect the game attributes and pay attention to the fun, which is the real value.

As the market fever wanes and user interest shifts, Web3 games have a new trend of Play-and-Earn. On the one hand, Web3 games draw on the Free-to-Earn model of traditional games, so that everyone can participate for free and some players can make money; On the other hand, Web3 games create complete on-chain games and autonomous worlds. The core logic of games is on the chain, and they will adopt the open architecture, autonomous existence, and combination in the future.

Unfortunately, the typical representative of the “Play and Earn” game has not yet appeared. Who will be the next Axis Infinity and StepN needs to be tested by history.

While games are still exploring how to strike a balance between the entertainment experience and the financial incentives, the capital is betting on the market. In May 2022, a16z launched a $600 million fund dedicated to investing in Web3 gaming startups, mainly in three areas: game studios, consumer applications that support the player community (take Discord for example), and game infrastructure providers. Superficially, the three fields are scattered, they only have one goal, to create real Web3 games.

It is worth noting that the next generation of “Play-and-Earn” games, projects related to Web3 game industry, may be created by them:

**TreatureDAO: **(@Treasure_DAO) a decentralized game platform and distribution platform that meets the needs of independent developers through perfect infrastructure and ecology, and forms an economy by accumulating players’ activity content. Currently, it is the №1 game and NFT ecosystem on Arbitrum, with more than 100,000 players.

SkyArk Studio: (@SkyarkS) an AAA blockchain game studio, which launched on-chain and asset-only series of games such as SkyArk Chronicles, as well as the exclusively developed NFT game engine. The engine allows NFT to be interoperable, editable, and evolvable, and helps players use NFTs in different games with different gameplays.

Bedlam: an electronic sports game center, a platform for creating and hosting personal game identities (performance statistics and content) for Web3 games. Users can participate in leagues or tournaments and follow their favorite teams.

3.Phydigital application

Liberty index: ☆☆☆

Trust index: ☆☆☆☆

Business model verifiable index: ☆☆☆☆

Web3 Unicorn growth index: ☆☆☆☆

In terms of crypto native and Web2 brands in fashion and entertainment, Web3 offers opportunities to bring digital and real-world objects and experiences to their audiences. The new popular pairing of the physical world and the digital world has coined a new term “phydigital”.

“Phydigital” (“Physical” plus “Digital”) integrates physical environment or physical objects and digital or online technology-driven experience. It was first proposed by Momentum, an Australian marketing agency, in 2013.

We reckon that, in a broader sense, physical projects with digital performance and digital projects that affect the physical environment or physical objects can be taken as phydigital applications. They represent a broad category of Web3, enabling blockchain developers to figure out new approaches that combine the physical and digital worlds.

In 2022, Tiffany, a luxury jewelry company, launched “NFTiffs” to the holders of CryptoPunks, with a physical version of the diamond pendant. 250 NFTiffs sold out within 20 minutes after their debut and created $12.5 million of revenue for the company. The creation of this “phygital” project is an innovative business attempt by luxury goods to Web3.

In December 2021, NIKE announced the acquisition of RTFKT, a virtual fashion brand, and regarded it as the fourth largest independent brand in addition to Nike, Jordan, and Converse. It can be seen that Nike has raised NFT construction to the level of brand strategy. RTFKT is building a physical shoe, which employs Nike’s electronic shoelace Adapt technology. Consumers can exchange corresponding physical shoes after purchasing virtual ones.

NBA Top Shot is a blockchain collection game jointly created by NBA, NBPA, and Dapper Labs. It aims to turn the highlight moments of NBA games into tradable digital game cards. In other words, the paper card exchange that fans used to need to do offline can take place anywhere, anytime online.

In addition to the above FMCG and luxury goods, the physical card business of the financial category is trying to connect with Web3. Visa and Mastercard jointly develop cryptocurrency debit cards with different Web3 companies. For example, Blockchain.com will cooperate with Visa to launch a debit card, which is associated with the client’s crypto account. There are no fees for the transactions of this debit card and users can get 1% cryptocurrency cashback.

By integrating the physical and the digital world, phydigital drops are no longer used to buy items for display, but to produce more things by combining various parts of the real world and the virtual world to create unique experiences.

In the initial stage, phygital products integrate physical and virtual products. With the convenience of social sharing and DIY derived from virtual products, we can get a glimpse of the great potential generated by the combination of phygital and Web3.

At present, the providers of phydigital application solutions that deserve attention include:

RTFKT Studios: (@RTFKT) it adopts the latest game engine, NFT, blockchain certification, and augmented reality, and applies manufacturing expertise to create unique sneakers and digital artifacts.

Dapper Labs:（@dapperlabs**）**it is the company behind the well-known projects CryptoKitties, NBA Top Shot, NFL All Day, UFC Strike, and Flow blockchain. It uses blockchain technology to develop NFT and new forms of digital engagement for fans around the world, paving the way for a more open and inclusive world that starts with games and entertainment.

4.Web3 growth stack application

Liberty index: ☆☆☆

Trust index: ☆☆☆☆

Business model verifiable index: ☆☆☆☆☆

Web3 Unicorn growth index: ☆☆☆☆

Web2 embraces Web3, which will facilitate the breakthrough in Web3 and attract huge incremental users. According to statistics, 43 of the top 100 brands in the world, including Starbucks and others, are testing the alternative use cases of Web3 and NFTs.

Major Brand Flagship NFT Collection Launches Source: Messari

Shayon Sengupta of Multicoin Capital first proposed the concept of “Web3 Growth Stack”, that is, product managers and marketing personnel use Web3 technology to build tools to acquire, attract and retain clients. The great advantage of Web3 Growth Stack is the ability to tightly couple in-application events with on-chain payments. Web2 products cannot deliver value to users in real time, but Web3 products can and may even fundamentally expand the design space for growth tools and advertising models.

Previously, Starbucks announced the launch of the Starbucks Odyssey, an NFT membership program. Consumers can participate in Odyssey series of travel activities, mainly including interactive games and fun challenges. After completion, consumers will receive a collectable Digital Journey Medal (NFT) as the reward.

The Digital Journey Medal can be traded as NFTs, upgrading participate-to-ear to collect-to-earn and improving user stickiness and repurchase; Starbucks members have NFTs, which means that the data is uploaded on the chain. Other brands (cooperative or competitive brands) can perform various airdrops for these members, which has evolved into airdrop-to-ear. The more active the members are, the more NFTs they have, the more airdrops they will get, and the stickiness and repurchase of users will be improved.

The essence behind the Starbucks NFT membership program is to follow the user-centered philosophy, where users take back data ownership and gain more value.

Now, more commercial brands are paying close attention to how Starbucks develops and practices in the future; If it works, we will see the great enthusiasm of major brands for the release of the NFT reward points system.

Starbucks has 27.4 million members, Nike has more than 300 million members, and Pizza Hut has more than 80 million members… These brands use the “Web3 Growth Stack” to transform Web3, which may be the fastest way to create Web3 applications with one billion users.

“Web3 Growth Stack” applications that deserve special attention include:

Blackbird: (@blackbird_xyz) a Web3 platform specially designed for the tourism and hotel catering industry. It is committed to establishing direct links between restaurants and guests through loyalty and membership services. It integrates loyalty and member-related products to provide rewards for dining frequency, consumption, etc.

**Layer Infinity: **(@RensOriginal) a Web3 platform established by e-commerce brands. It helps traditional consumer brands easily migrate to Web3, and release NFTs compatible with the Metaverse, which can be bound with physical products. In addition to tracking the authenticity of products and exchanging physical objects, each NFT can be linked to various practical NFTs.

5.Web3 social application

Liberty index: ☆☆☆

Trust index: ☆☆☆☆

Business model verifiable index: ☆☆☆☆☆

Web3 Unicorn growth index: ☆☆☆☆

The social platform has a large number of users, portraits, and behavior data, which contains the huge business value. The most valuable Internet products in the world of Web2 are best illustrated by the valuations of giants like Facebook, Twitter, TikTok, etc.

According to Metcalfe’s law, the value of a social network is proportional to the square of the number of users. The more users, the greater the value of social platforms, and then the user growth curve explodes at a single point.

Diagram of Metcalfe’s law Source: MicroFinTech: Expanding Financial Inclusion with Cost-Cutting Innovation

Therefore, the pain point of innovation in social projects is that it is “easy to defend but difficult to attack”. Once a user network is established through a certain paradigm, it is impossible for the latecomers to surpass it.

For the social platform in the Web3 era, the decentralized technology based on the blockchain makes the user’s creative content, social relationship data, identity, and reputation achieve decentralization and composability. People will have absolute control over their social data, thus forming a user-centered social network.

However, the development of Web3 social applications is still at an infant stage. Web 3 products cannot support the billion-level daily user volume of Facebook, WeChat; Web 3.0 products have a higher threshold, but their product experience is poorer than Web2 products.

Besides, most Web3 social products only meet the on-chain social and financial needs of crypto native users. Products that meet on-chain and off-chain social and financial needs may stand out in the future. After all, social is more than just online data interaction. It should be linked to video entertainment, games, music, fitness, and other aspects of our lives.

CGV Research believes that the key characteristics of the next generation of Web3 social applications should include: 1) the cost acceptable to the user; 2) The product experience close to or better than Web 2, and lower threshold for use; 3) cost acceptable to the user data synchronization (both on-chain and off-chain can be integrated); 4) design continuous incentive mechanism through tokens or NFTs; 5) mature community vitality, high user activity, and stickiness.

Overall, social applications are the most promising but the most difficult field for Web3 applications. How to expand infrastructure and implement a sustainable economic model is the current focus and pain point. For the Web3 social applications, we need to take a longer view.

Web3 social applications worthy of attention include:

**Lens Protocol: **(@LensProtocol) an open and composable Web3 social media protocol that allows anyone to create unmanaged social media materials and build new social media applications. Users are free to develop and own the content they create by owning the corresponding NFTs.

**Mask Network: **(@realMaskNetwork) a portal that helps users transfer from Web 2.0 to Web 3.0. It integrates privacy and social networking, a cross-border payment network, decentralized file storage and sharing, decentralized finance, and governance (DAO). It allows users to encrypt their messages on social media platforms, such as Twitter and Facebook. Besides, it has the functions of sending and receiving cryptocurrency red packets, ITO, uploading, and saving decentralized files.

**Galxe: **(@Galxe) a collaborative credential infrastructure that is designed to create user profiles based on the user’s blockchain behavior. Brands and projects can use these Web3 digital credentials for better promotion, such as gamifying their loyalty system, launching marketing campaigns, acquiring users, etc.

6. Creator economy application

Liberty index: ☆☆☆☆☆

Trust index: ☆☆☆☆☆

Business model verifiable index: ☆☆☆☆

Web3 Unicorn growth index: ☆☆☆☆

For many people, the creator economy is a big concept. Its content includes texts, pictures, music, videos, and other forms, each with a different growth logic.

From the perspective of the industry, CGV Research deems that the creator economy refers to the economic form in which independent content creators (such as bloggers, social media KOL, photographers, etc.) publish their original content through digital carriers such as texts, videos, audios, and other channels via platforms or communities, and gain profits.

The creator economy has two key characteristics: first, creators can turn data flow into cash by acquiring fans and followers with unique contents; second, creators can build tools and infrastructure to create or manage content.

According to the Influencer Marketing Hub, 50 million people worldwide participate in the creator economy. By the end of 2022, the market size of the global creator economy reached US$104.2 billion.

However, the current creator economy system has serious income inequality, with a large portion of creators’ earnings being paid to third parties as service fees. On Spotify, each song played once by a paid account only generates a copyright fee of $0.004; only 0.33% of YouTube creators earn full-time income; and only the top 1% of authors on Amazon earn $1,000 in a month. In addition, problems such as the lack of content management rights and vicious competition are commonplace in the current creator economy system.

Web3 is a new generation of Internet based on blockchain infrastructure, which has made the biggest difference between the creator economy and the previous ones. In addition to consumption and creation, users own and freely use the data content created by themselves.

List of global creator economy startups Source: Speedinvest

According to this logic, Web3 will bring three paradigm changes to the “creator economy”: 1) redistribute the value and rights of the platform to creators through independent mechanisms such as tokenization and smart contracts; 2) provide composable and trustable perspectives for people who want to start creating; 3) for the first time, users have the opportunity to gain rewards and own part of the Internet value.

The application scenarios of Web3 creator economy projects include content creation, NFT issuance and trading, community building, fan motivation, and asset management. A complete value chain has been formed to help creators use content, NFT, and social tokens to closely connect with fans.

Of course, it should be reminded that the starting point of the Web3 creator economy is not about grabbing data flow, but abandoning the competition for users’ attention and highlighting productivity. Only by providing better content, can higher revenue be achieved.

Web3 creator economy applications worthy of attention:

**Mirror: **(@viamirror) it combines content publishing with web3 technology, stores content in Arweave, and publishes it to fans by connecting wallets. Besides, all posts on Mirror are mintable, turning fans into collectors;

**Rally: **(@rally_io) YouTube’s Web3 alternative. It is a platform for creators and their communities to build their independent digital economy. It prioritizes creators and allows them to promote interaction with the community around social tokens.

Bill Gates once said: “most people overestimate what they can do in one or two years and underestimate what they can do in five or ten years.”

Now it seems that the Web3 market with 1 billion users is still far away from us. But nothing is impossible, it is only a matter of time.

As a Web3 practitioner, the only thing we can do is to provide better Web3 services to all corners of the world and all aspects of everyone’s life through the constant building, thus making this day come earlier.

Note: This article is a CGV research paper and is for reference only. It does not constitute any investment proposal.

About Cryptogram Venture (CGV): A Japan-based research and investment institution engaged in crypto. It has participated in early investments in Republic, CasperLabs, AlchemyPay Graph, Pocket, and Powerpool, as well as the Japanese government-regulated yen stablecoin JPYW, etc. CGV FoF is the limited partner of Huobi venture, Rocktree capital, Kirin fund, etc. Currently, CGV has branches in Singapore, Canada, and China.

References:

https://a16z.com/2020/12/07/social-strikes-back-fastest-growing-apps/https://multicoin.capital/2023/01/11/the-web3-growth-stack/https://www.robinsloan.com/lab/notes-on-web3/https://future.com/power-of-social-community/https://medium.com/ixfi/SocialFi-what-is-it-and-how-does-it-affect-social-media-as-we-know-it-8c28c023a00dhttps://twitter.com/jolestar/status/1589830650659753986https://coinyuppie.com/SocialFi-the-key-technology-changing-the-globalization-of-the-blockchain-industry/https://medium.com/coinmonks/what-exactly-is-SocialFi-is-this-a-new-cryptocurrency-trend-1d2bf209dd99https://blockcast.cc/news/an-overview-of-the-SocialFi-ecosystem-social-dao-and-governance-tools/

By: Vargason, CGV Research Fellow

Introduction

As we enter the Web3 world, let’s start by asking ourselves a question: Do we need a crypto wallet to trade and keep our crypto assets? The answer is yes. Crypto wallets are essential for users in terms of market transactions and asset custody. With the development of DeFi, GameFi, and NFT, the use of crypto wallets has become a must-have skill. As a digital asset circulation carrier and an essential medium for reaching users, the crypto wallet is no longer an independent product but the gateway to the Web3 ecosystem.

In recent years, the number of tokens lost on centralized exchanges has increased. The CeFi platform, while generating significant revenues, is unable to protect users’ assets, making users prefer to protect their assets through crypto wallets. If you want to explore the Web3 world, the first thing you need to do is to understand and use crypto wallets. In this article, CGV introduces you the crypto wallet, its ecological development, and the role it plays in the Web3 world.

1. What is the crypto wallet?

1.1 The development path of the crypto wallet

Initially, crypto wallets were only used for depositing crypto assets and occasional transfers. Crypto wallets were more of an option for users with numerous assets, and most of users preferred to deposit their assets on non-custodial centralized exchanges.

Due to the frequent security incidents on centralized platforms and the threat to users’ crypto assets, users prefer to protect their assets through crypto wallets. With the development of DeFi and NFT, users have begun to use crypto wallets to interact with on-chain protocols. In addition to allowing users to interact with various protocols, crypto wallets have introduced exchange functions, greatly facilitating users’ participation in Web3.

1.2 Private keys are the “Achilles’ heel” of crypto wallets

Common crypto wallets are divided into three categories, namely software wallets, hardware wallets, and paper wallets, which can also be classified as hot or cold wallets depending on their working mechanism. A crypto wallet is mainly composed of a wallet account, a public key account, and a blockchain network, among which the most important are public keys, private keys, and mnemonics.

Crypto wallets do not deposit digital assets, they are just a tool that provide what’s needed to interact with the blockchain. These wallets can generate indispensable information to support transactions that send and receive cryptocurrencies via the blockchain. Such information contains one or more pairs of public and private keys, and the address essentially represents a specific “location” on the blockchain used to receive the cryptocurrency. Therefore, you can disclose the public key address to others to receive funds. However, you cannot reveal to anyone your private key, which allows you to access the cryptocurrency in your wallet, regardless of which wallet you use. The private key is the “Achilles’ heel” of a crypto wallet and is the most important part of your crypto wallet that you need to protect.

2. Why is wallet the gateway to the Web3 world?

2.1 The crypto wallet has a promising future

How to understand the relationship between crypto wallets and Web3? First of all, we should realize that the layout of crypto wallets is the starting point for building a value network, a vital traffic entry for infrastructure in the blockchain era. It is also the first step to participating in digital asset transactions and related asset activities.

Paypal reported a 40% increase in new crypto wallet users in revenue in Q4 2021 and predicted that crypto services would make more progress and double in 2022. This year’s frequent market manias have confirmed this. Recently, Robinhood officially announced the launch of a crypto wallet at the Bitcoin Conference 2022 in Miami, and Opera launched an Internet browser and a crypto wallet with built-in Web3 integration. Besides, Phantom won $109 million in equity, and WalletConnect completed the A round of $ 11 million, etc. As an important entry for Web3 projects, the market expectations of crypto wallets are very impressive.

Wallet is the traffic entrance of DeFi and an indispensable part of the crypto ecosystem. Wallets such as Metamesk and Bitkeep are crypto wallets that stand out in the wave of DFI. For example, Solana attracted users with its public chain design but lacked an easy-to-use wallet software. After Solana released the Phantom wallet, it attracted investment from industry investors including A16Z and Coinbase, and gained a large market share.

2.2 The path to digital asset management platforms for crypto wallets

With the increase in crypto applications and the expansion of the crypto market scale, crypto wallets will gradually become a management platform that includes a variety of digital assets, from the single function of depositing and protecting assets, to generate more service products, such as wallet wealth management products, manageable ID documents, one-stop aggregated asset management platforms for daily payment, memorial card, etc. In this way, users can further experience the advantages of decentralized wallets, which will become important product forms and presentation methods in Web3.

CGV deems that the more elements derived from crypto wallets, the more favorable it is to promote the progress of Web3. It may be a container for assets on our chain, and a collection of identities when we act in the Web3 world. A large number of daily behaviours will be related to the blockchain wallet, and users can even browse Web3 directly using crypto wallets. Crypto wallets are crucial to driving the industry. As the number of users grows, so does the demand for wallets. Crypto wallets are evolving into daily digital wallets, investment/deposits centers, digital identities, Web3 social, chain Bridges, etc.

2.3 Crypto wallets provide a safe haven for the Web 3 world

As wallets become more widely used, there are more incidents of malicious clusters targeting Web3-enabled wallets such as Metamask. Confiant, a security agency, has uncovered a cluster of malicious activities involving a distributed wallet that allows hackers to steal private seeds and access users’ funds through backflushed fake wallets.

Crypto wallet, which provides high performance, high security, and low threshold asset management services and extended platform for global users and developers, will be the next focus. There is no clear answer as to which crypto wallet should be used. If you trade frequently, a web wallet allows you to quickly access your funds and conduct transactions with ease. Let’s take a look at several wallets that are frequently used by users in the current market:

3. Ecological analysis of crypto wallets

To make it easier for you to understand crypto wallets, CGV analyses the current wallet market by the way it works, and divides crypto wallets into “hot wallets” and “cold wallets”.

Hot wallets refer to wallets that are connected to the Internet in any way. On the contrary, cold wallets are completely disconnected from the Internet. They use physical media to store keys offline, which can effectively resist online attacks by hackers. Therefore, cold wallets are more secure in “depositing” tokens.

3.1 Hot wallet ecology

1）BitKeep

BitKeep is a decentralized multi-chain digital asset wallet. The wallet team has a unique understanding of the crypto industry and wallets. They have integrated Wallet, Swap, NFTMarket, DeFi, and DApps to build the gateway to the Web3 ecosystem. Public data shows that BitKeep wallet has become one of the more popular crypto wallets in Asia in terms of user base, revenue size, and valuation ranking.

CGV notes that the problem for new users entering the Web3 world is that the learning threshold is too high, especially when it comes to mainnet selection for wallets, asset trading, and other issues. To lower the threshold for users, BitKeep has introduced several distinctive features:

• Buy any asset with any digital asset. BitKeep realizes quick exchange on DEXs such as Uniswap, Sushiswap, PancakeSwap, etc., and one-click cross-chain exchange for any asset of Ethereum, BSC, HECO, Polygon, Avax, Fantom, OEC, TRX, Solana.

• Save gas fees. Users do not have to deposit the corresponding mainnet tokens in advance as gas fees when transferring or trading via the BitKeep wallet, and can directly use the existing tokens to exchange, which saves the extra costs incurred by two exchanges, and simplifies the steps of exchanging mainnet tokens.

• Buy NFTs easily. BitKeep NFT Market is an aggregated NFT market with cross-platform search capabilities, as well as support for receiving and transferring tokens and bulk transfers of tokens, allowing users to purchase NFTs using any token on the same chain.

CGV notices that capital institutions also favor BitKeep. On May 18, 2022, BitKeep raised $15 million in financing, with a valuation of $100 million. KuCoin Ventures, A&T Capital, Matrixport, Bixin Capital, Peak Capital, YM Capital, and other first-tier institutions have participated in the investment.

2）MetaMesk

MetaMask is an easy-to-use crypto wallet supporting iOS/Android and major browsers. It is the wallet most widely supported by various browser in the crypto economy and has become the standard for all decentralized applications (Dapps). For users, MetaMask is an “electronic bank account” that can manage crypto assets, and users can use it for online and offline consumption, transfers, mortgage loans and other operations. It is also a “passport” to the decentralized network under the Web3 concept, through which users can connect to most platforms in the blockchain field.

In terms of security, it is different from the mode in which the keys are stored in the central server, which isolates the storage environment from the site environment. With respect to connectivity, the interface between Ethereum and various DeFi platforms is built. That is, it is possible to participate in construction without synchronizing complete nodes. MetaMask is undoubtedly the most likely to become the Google of the Web3 era with its initial business model, as well as its leading monthly active users and funding scale.

3）Gnosis

Gnosis Safe is a smart contract wallet running on Ethereum that requires the minimum required amount of keys of the total number of keys that is needed to sign the transaction (M-of-N). For example, if your business has 3 key stakeholders, you can set your wallet to require approval from all of them before sending a transaction request, which ensures that no one can steal the funds.

Over the past 4 years, the development of multi-signature wallet Gnosis Safe has become a critical infrastructure for Web3, protecting digital assets for DAOs, institutions, projects and individuals. Gnosis Safe users manage over $64 billion worth of assets on the Ethereum mainnet alone.

4）CoinbaseWallet

CoinbaseWallet is a beginner-friendly secure wallet with low transaction fees and ease of use. With CoinbaseWallet, you can use it not just as a tool to access cryptocurrencies, but as a foothold to explore decentralized networks. With CoinbaseWallet, you can manage ETH and all your ECR-20 currencies. As it supports BTC, BCH and LTC, you can use it to receive airdrops and cryptocurrencies, buy and store cryptocurrencies, and trade with anyone anywhere with no fees.

3.2 Hard wallet ecology

1）Ledger

Ledger is a hardware wallet with moderate ease of use and high security. Ledger, the maker of Bitcoin hardware wallets, is one of the technology leaders in digital currency security, providing consumers and businesses with trusted hardware.

Ledger is a smartcard-based Bitcoin hardware wallet that offers the highest level of protection with technology-leading availability and manipulation. Ledger hardware wallet is a multi-functional wallet, a hardware device that securely stores private keys. When viewing the wallet and sending transaction requests, the hardware wallet needs to be used with a software wallet. It also supports the secure storage of Bitcoin, Ethereum and platform tokens, Zcash, etc. Its projects have offered open source resources on Github.

2）Trezor

Trezor is a hardware wallet with moderate ease of use and high security. Trezor is a high-tech data encryption memory. This brand is recognized as the earliest and most discreet and secure crypto memory. It is a reliable brand that has been verified by global digital currency players, with excellent company records and rich software support. Trezor’s security model is based on the principle of zero trust, which assumes that any part of the security system can be successfully attacked.

Summary

There is no clear answer as to which crypto wallet should be used. CGV suggests that if you trade frequently, web wallet can allow you to quickly access funds and conduct transactions conveniently. If you hold a large number of cryptocurrencies for a long time and do not intend to sell them, then cold wallet is an ideal option. These wallets are not connected to the Internet and are more secure against online phishing attacks or scams. Therefore, before choosing the ideal wallet, you should first figure out the technology of the wallet. Practical protection tools should be considered when using cryptocurrency trading platforms.

CGV deems that with the continuous prosperity of the Web3 ecosystem, it will be a huge opportunity for crypto wallets to integrate this ecosystem and enrich our assets.

About Cryptogram Venture (CGV) : Cryptogram Venture (CGV) is a Japan-based research and investment institution engaged in crypto. With the business philosophy of “research-driven investment”, it has participated in early investments in FTX, Republic, CasperLabs, AlchemyPay, Graph, Bitkeep, Pocket, and Powerpool, as well as the Japanese government-regulated yen stablecoin JPYW, etc. Meanwhile, CGV FoF is the limited partner of Huobi venture, Rocktree capital, Kirin fund, etc. Currently, CGV has branches in Singapore, Canada, and China.

On August 5th, Japan’s first Web3 Hackathon, the event details of “Tokyo Web3 Summer Hackathon (TWSH)”, was officially announced.

“Tokyo Web3 Summer Hackathon (TWSH)” is initiated by Cryptogram Venture (CGV) and supported by experts from institutions such as the Ministry of Education, Culture, Sports, Science and Technology (MEXT), Keio University, Sony, Softbank, Asia Blockchain Gaming Alliance (ABGA), Cointelegraph Japan (CTJ). It will be “Japan-based and global-oriented”, give full play to Japan’s unique “industry-government-academia” cooperation and innovation mechanism to discover, support, and help outstanding talents and teams in the Web3 field and explore the application potential of the Web3 on a global scale, to help teams and projects start smoothly and achieve sustainable growth and development.

Since the launch of the “TWSH”, dozens of industry organizations such as IOSG, BAI capital, HashKey, Metis, Achemypay, etc. have joined as supporting organizations and judging committee members. Additionally, nearly 100 projects have been registered.

According to the arrangement and setting of the organizing committee of “TWSH”, the event details of this hackathon are as follows:

1.Schedule

• July 26 — August 26: Project registration;

• August 27 — September 16: Project pre-selection, excellent project roadshow, and NFT theme exhibition and other related activities

• September 17 — September 26: Organize centralized evaluation of projects and announce the results of the awards;

• End of September: Offline award ceremony in Japan.

(Follow @CGVFof on Twitter for updates.)

2. Participants

Traditional Internet developers and blockchain developers who are interested in Web3, developers, engineers, product managers, and UI designers with innovative and creative abilities.

3. Key fields

“TWSH” welcomes projects from any public chain/ecological team to submit projects. The key fields of the competition include:

• Web3 protocol and infrastructure (L1/L2/cross-chain bridge, storage/identity/communication/auditing, etc.);

• Metaverse (virtual land, scenario development, platform construction, content production, virtual humans, etc.);

• NFTs (new standard protocols, issuance platforms, liquidity infrastructure, blue-chip assets, etc.);

• Games (innovative games, basic development layers, issuance platforms, guilds, etc.);

• DAOs (basic tools, asset management platforms, collection/self-service, guild governance), etc.

4. Resource support

1. Bonus sponsorship. The winning projects will share a total prize pool of $150,00: 1 champion (20,000 USDT); 2 runners-up (10,000 USDT each); 6 second runners-up (5,000 USDT each), as well as several regional awards, category awards, and ecological sponsorship awards.

2. Project investment and entrepreneurial guidance. Outstanding projects have the chance to receive a total of $1 million from the incubator funding, as well as start-up guidance from top global VC institutions.

3. Connect developers with partner resources. The project can establish contacts with more BUIDLer and Web3 organizations, exchange with and learn from them, and explore more cooperation opportunities.

4. Project exposure and brand awareness enhancement. The projects will gain more popularity through Japan’s first Web3 Hackathon; the winning projects will have the opportunity to receive PR support and media interviews provided by CGV.

5. Scoring criteria

• **Application for institutional cooperation (event support, project investment, media cooperation, etc.): **Yurinatyou@cgv.fund

• **Website for project registration: **https://www.web3hackathon.io/

About Cryptogram Venture (CGV)

Cryptogram Venture (CGV) is a Japan-based research and investment institution engaged in crypto. With the business philosophy of “research-driven investment”, it has participated in early investments in FTX, Republic, CasperLabs, AlchemyPay, Graph, Bitkeep, Pocket, and Powerpool, as well as the Japanese government-regulated yen stablecoin JPYW, SONY Tokyo Tower, Metaverse REDO, etc. Meanwhile, CGV FoF is the limited partner of Huobi venture, Rocktree capital, Kirin fund, etc. Currently, CGV has branches in Singapore, Canada, and China.

On July 20, 2022, Cryptogram Venture (CGV) announced that “Tokyo Web3 Summer Hackathon (TWSH)”, the first Web3 hackathon in Japan initiated by CGV and supported by experts from institutions such as Ministry of Education, Culture, Sports, Science and Technology (MEXT), Keio University, Sony, Softbank, Asia Blockchain Gaming Alliance (ABGA), Cointelegraph Japan (CTJ), will be held soon.

It is reported that the (pre-) registration for participating in the project has started at https://www.web3hackathon.io/, and institutional cooperation, recruitment and negotiation are in progress.

This hackathon is held in Japan to support the Japanese government’s vigorous promotion of Web3. Japanese Prime Minister Fumio Kishida recently stated that the advent of the Web3 era might lead Japan’s economic growth; the Japanese government will undertake institutional reforms to create an environment that facilitate the creation of new services — including Web3-related infrastructure. Japan has an enormous potential in encryption and Web3 and may play an essential role in the global Web3 market.

The “Tokyo Web3 Summer Hackathon” will be “ Japan-based and global-oriented”, give full play to Japan’s unique “industry-government-academia” cooperation and innovation mechanism to discover, support, and help outstanding talents and teams in the Web3 field and explore the application potential of the Web3 on a global scale, facilitate teams and projects starting smoothly and achieving sustainable growth and development, and provide scientific and technological support and new vitality to the current social development and digital transformation of various industries.

Steve Chiu, founder of CGV and event organizer, said that the main topics of this campaign will cover Web3 protocol and infrastructure (L1/L2/cross-chain bridge, storage/identity/communication/audit, etc.); metaverse (virtual land, scenario development, platform building, content production, virtual human, etc.); NFT (new standard protocol, distribution platform, liquidity infrastructure, blue-chip assets, etc.); game (innovative games, basic development layer, distribution platform, guilds, etc.); DAO (basic tools, capital management platform, collection/self-help category, guild governance), etc.

Currently, the first batch of judges determined for the competition includes Matsuda Ikkei, member of the Research and Development Bureau of the MEXT; Yamanaka Naoaki, Vice President of the Institute of Electronics, Information and Communication Engineers (IEICE) and Director of the Keio Leading-edge Laboratory of Science and Technology (KLL); Miyazawa Kazumasa, member of the Financial Review Council of the Financial Services Agency of Japan and the “first person” to make electronic payments in Japan; Yamada Yoshiyuki, former head of IT sales business, Softbank Corporation, and experts and scholars in the global crypto industry and Web3 field with a wide range of influence, representatives of investment and research institutions, well-known project founders, etc.

The hackathon will gather top industry institutions and potential projects. Participants will get the opportunity to have early contact with first-line projects and share with global organizations and practitioners in Web3 industry. Additionally, they will have access to receive investment and entrepreneurial guidance from top global VC institutions, win prizes with a total prize pool of $150,000, as well as the support of a million-dollar incubation fund.

According to the schedule of the hackathon, from July to September, project registration, screening and evaluation, project roadshow, NFT theme exhibition, and other activities will be organized; online pre-selection and outstanding project roadshow will start in mid-August; offline award ceremony is expected to be held in Japan in mid to late September.

Application for institutional cooperation (event support, project investment, media cooperation, etc.): Yurinatyou@cgv.fund

Website for project (pre-) registration: https://www.web3hackathon.io/

About Cryptogram Venture (CGV):

Cryptogram Venture (CGV) is a Japan-based research and investment institution engaged in crypto. With the business philosophy of “research-driven investment”, it has participated in early investments in FTX, Republic, CasperLabs, AlchemyPay, Graph, Bitkeep, Pocket, and Powerpool, as well as the Japanese government-regulated yen stablecoin JPYW, etc. Meanwhile, CGV FoF is the limited partner of Huobi venture, Rocktree capital, Kirin fund, etc. Currently, CGV has branches in Singapore, Canada, and China.

About MEXT

The Ministry of Education, Culture, Sports, Science and Technology (MEXT) is one of Japan’s central government administrative organs responsible for coordinating education, science, technology, academic, cultural, and sports affairs in Japan.

About Keio University

Keio University, a world-renowned research and comprehensive university, is the first institution of higher education in Japan. The predecessor of Keio University was a private school of Western learning founded in 1858 for the dissemination of Western natural sciences in the Edo period. Under the guidance and influence of its founder, Yukichi Fukuzawa, Keio University has played a pioneering and leading role in Japanese society.

About Sony

As a multinational conglomerate based in Japan, Sony is mainly engaged in the development of electronic products. It operates in various fields, such as consumer electronics, electronic games, finance, entertainment, semiconductors, smartphones, cameras, camcorders, audio, etc. Additionally, it has created numerous worldwide brands, including Xperia, Walkman, Sony Music, Columbia Pictures, PlayStation, Alpha, etc.

About Softbank

Founded in Japan by Masayoshi Son in 1981 and listed in Japan in 1994, SoftBank Group is an integrated venture capital firm with a focus on investments in the IT industry, including networks and telecommunications. SoftBank has invested in over 600 companies worldwide and has majority stakes in more than 300 major IT companies across the world.

About Asia Blockchain Gaming Alliance (ABGA）

Asia Blockchain Gaming Alliance (ABGA) is a non-profit Blockchain Gaming Alliance launched by leading institutions in the gaming industry. It aims to gather industry information, screen outstanding teams and enterprises, broaden investment horizons, and promote the development of Blockchain Gaming industry, thus helping the Asian high-quality projects and teams gain a foothold in Asia and go global.

About Cointelegraph Japan (CTJ)

Cointelegraph Japan is an international media company based in Japanese-speaking areas. It focuses on blockchain fintech, and real-time, objective, and true reporting, adhering to originality and connecting the world.

In the tide of encryption technology, Crypto Review came into being. Initiated by cryptogram venture (CGV)FoF, with the purpose of “providing in-depth value reference for global encryption practitioners”, crypto review is committed to providing meticulous industry insights, the best investment and research practice guidance to encryption professionals and enthusiasts all over the world, And expand the positive impact of encryption consensus on more institutions and the wider population.

Crypto Review is not for profit and adopts the recommendation and invitation system. The content covers: 1. Encryption trends. Pay attention to the technology, management, industry and even macro factors that will affect the behavior of the encryption industry; 2. Overview of the track. Share the latest Overview Research and analysis based on a specific vertical field; 3. Project analysis. Comprehensively and deeply interpret the early dark horse project and star project, and systematically interpret their design concept and mode.

The following is a selection of crypto review articles (Feb 2022)

TRENDS

Go-to-Market in Web3: New Mindsets, Tactics, Metrics

CR Recommendation

The key difference between web2 and web3 is that the goals, growth, and success metrics of web2 and web3 are often not the same. The author explains how to introduce go to market (GTM) strategies such as Token and new organizational structure (DAO) under Web3 mode, to tell Builders should start with a clear purpose, grow a community around that purpose, and match their growth strategies and community incentives — and with them, the go-to-market motions.

Ask Not Wen Moon–Ask Why Moon

CR Recommendation

On February 18, 2022, Sequoia Capital, where the author works, announced the launch of a cryptocurrency investment fund with a scale of US $500–600 million, which is the first industry-specific fund of Sequoia Capital since its establishment in 1972. The news has aroused widespread concern in the industry. Based on what considerations, Sequoia Capital has made a big leap from a traditional first-line dollar fund to try to lead the investment in Web3 and the encrypted world? The author believes that VC, like all biological systems, either evolve or die, while Sequoia Capital is always paranoid.

Right-Click Save #2: Culture is a meme. So are NFTs

CR Recommendation

NFT represents digital culture, but the cultural values behind it are different and difficult to measure. The author creatively puts forward the quantitative standard of NFT cultural value, including brand value index, historical value index, imitation value index and wealth display value index. This provides a very good operational idea for the financialization of NFT, which will lead to more NFT market opportunities.

DeFi Gives Financial Privacy — Will Regulation Take It Away?

CR Recommendation

Can the government restrict the use of DeFi and force people to use third-party intermediaries? In the context of emerging Web3 technologies, this problem has become more and more important. The author reviews the solutions to historical problems such as the use of contraceptives, the setting of separate car trunk and the video recording of government employees (such as police) in public places, and gives us a hint: some technologies are necessary to protect constitutional rights, so banning the use of these technologies will violate these rights.

FIELDS

Gaming and its coming Web3 emancipation : 10 ideas on how to develop a robust Play-to-Earn economy that is empowered by property rights, income distribution, and capital mobility（excerpt）

CR Recommendation

In this report, Folius ventures tries to give 10 design ideas for the economic design of P2E games. Through the in-depth design of multi factor ROI model, foreign exchange reserves and exchange rate regulation, infrastructure and governance tokens, it aims to make the exchange rate more stable, the economic model more sustainable and the game can develop in the long term. These ideas may become the design inspiration of any project interested in the field of GameFi.

Why we are bullish on crypto in India（excerpt）

CR Recommendation

For the Crypto market, India’s huge population development potential is well known, but in addition, India has advantages in accepting digital consumer groups, digital infrastructure, strong skilled labor force, local and state support for cryptocurrency and low-cost data rate, It is an important factor to help India take the initiative in the cryptocurrency field in the future. The report comprehensively analyzes the progress of India’s digital technology, Internet and mobile phone hardware, and provides a good perspective for us to understand the overall picture of India’s crypto ecology.

A mental primer to optimize for decision making efficiency

CR Recommendation

Investment is a long-term practice. The investment myth of 1000 times To Da moon in the cryptocurrency market is everywhere, but is this really the case? If true, can these myths last? Based on his own investment practice, the author gives sincere and constructive suggestions: “Lucky market participants will come and go, but the ones who focus on the methodology, consistently iterating frameworks and perfecting the process will stand out over time. The seeds you sow today will be reaped multifold in the future.”

PROJECTS

Consensus Capital Markets

CR Recommendation

From rice to metal, to spices, to oil… Today is crypto. Why do different times create different popular goods? This article deeply discusses the historical context of commodities markets, the importance of decentralized consensus in the digital universe, the economics of consensus production, and what a crypto-native capital market for consensus will look like, and puts forward Alkimiya’s vision: to create a more reliable income guarantee for block space producers and hedge the inherent volatility of block space production.

Blockchain Trilemma 2.0: The GameFi Trilemma

CR Recommendation

Since the beginning of 2022, a sports fitness application STEPN has attracted many people, especially sports lovers. It combines the classic elements of Social-Fi and Game-Fi and creatively proposes the Move-to-Earn model. Once the product was launched, it quickly came out of the circle and attracted extensive attention and discussion. Its good market reputation and viral promotion are inseparable from the product team’s in-depth thinking on blockchain Trilemma and the business model. This article is a comprehensive research report before the project is approved. Looking back, we should have new thinking and harvest.

Liquidity is Bandwidth

CR Recommendation

This article shares the interesting innovative concept of “Liquidity is Bandwidth”: in the Web2 era, exponential bandwidth upgrading has brought innovation and prosperity in the Internet era; In the Web3 era, the upgrading of Liquidity bandwidth will lead to more amazing innovation and prosperity. In addition, the project has a lot of experience in “how to make a wonderful narrative”, that is, how to make good use of “narrative” to improve the value recognition and product adoption of their own Web3 products, which is worthy of reference for crypto entrepreneurs.

**About CGV FoF: **CGV FoF is an Asia-based Fund of Funds (FoF) that focuses on investments in Crypto Fund and Crypto Studio. CGV FoF is composed of family funds from Japan, Korea, and China’s mainland and Taiwan, with headquarters in Japan and branches in Singapore and Canada.

For more information, please refer to Crypto Review (Feb, 2022).

Just click: Crypto Review_202202

The most fascinating thing about the encryption industry is that it is never short of innovative narratives.

In the first quarter of 2022, although the encryption industry had been affected by uncertainties such as the Ukraine-Russia war and the Fed’s interest rate hike expectations, the continued popularity of “Move-to-Earn” projects such as STEPN and Genopets gave a boost to the entire industry. The “Move-to-Earn” mode was quickly recognized by users and well received by the market.

Move-to-Earn is similar to Play-to-Earn. Put simply, real physical movement data is tracked through a smartphone or wearable device and mapped into the project. If certain task requirements are met, players can obtain corresponding rewards. For example, in a running application, users can obtain token rewards if they meet task requirement of, say, 5,000 steps.

CGV Research has conducted in-depth analysis and discussion on the “Move-to-Earn” mode and representative projects. We are very excited about the bold exploration and practice of STEPN and other projects in the fields of Web3, encryption, and traditional markets.

We firmly believe that the Move-to-Earn track is a brand-new track that is different from other X-to-Earn tracks. It has just started and will become a huge blue ocean market in the future.

Fitness: An Excellent Scenario for Web3 Encrypted Applications to Reach Beyond the Circle

For practitioners in the encryption industry, how to apply encryption technology to Web3 so that more users can access encrypted applications and encrypted digital assets is one of the difficult problems they have been trying to solve. After all, only when new users enter the encryption industry and take up business of new market can the encryption market grow bigger.

Many fields such as education, socializing, and entertainment have been trying to adopt the combination of Web3 and encryption technology. But in the view of CGV, fitness market that Move-to-Earn relies on has a broader user base and room for development. Fitness may be an excellent scenario for Web3 encrypted applications to reach beyond the circle at this stage.

**Fitness is a form of communication across borders, races, religions and cultures. Just **as the Olympic spirit “faster, higher and stronger” advocates, fitness is the universal value of human society. In terms of statistics, the people engaged in fitness constitute a huge user group: more than 1 billion people choose walking, jogging or running as a form of exercise; the number of users of running applications worldwide reaches 400 million; and in 2021, the number of people engaged in fitness in China exceeds 3 billion, etc. If Move-to-Earn can turn people engaged in fitness into users, it can attract millions, and even tens of millions of people, into the Web3 and encryption market.

Global Fitness Market Revenue Scale Forecast (2019–2028) Source：Runrepeat

**Online fitness market grows rapidly. **Since the outbreak of COVID-19 in 2020, more and more people have paid attention to health and adopted new ways of fitness. Online fitness has become the first choice for users thanks to its convenience, data-based monitoring effects, and dynamic usage analysis. According to Runrepeat, the global online fitness market is expected to reach $59.231 billion by 2027, growing at a CAGR of 33.1% from 2020 to 2027. Users of online fitness applications are all potential users of Move-to-Earn.

**Fitness is in line with the era theme of carbon neutrality and environmental protection. **The original intention of the Move-to-Earn project is to encourage users to engage more in fitness. While exercising, they also indirectly participate in environmental protection, making their own contributions to the advancement of the global carbon neutrality cause. For example, users can walk for 30 minutes to work instead of driving for 10 minutes. It is believed that the low-carbon lifestyle advocated by Move-to-Earn will be accepted by more people.

**Experiences and lessons about Web2 fitness applications. **Web2 fitness application is already a big market. As the market demand for smart watches and wearable devices keeps increasing, App developers constantly introduce new tools and functions, boosting the market vitality of fitness application software. Here, a running App “Interesting Walking Chain” (IWC) is worth mentioning. It was established in June 2018, and the number of registered users in China alone once exceeded 70 million. But its core business mode is a Ponzi scheme that pays dividends to existing investors with funds collected from new investors, and the project ended in abscondence with the money. Although IWC is a negative example, it can be seen from the development trajectory that once the door of the Move-to-Earn fitness market is opened, there will be a large influx of users.

Web3 & Web2 projects in sports and fitness industry

Market gap and user needs of the fitness market are clear. From CGV’s point of view, users who have a demand for fitness App can be roughly divided into two categories. The first category is users who have fitness plans but have difficulty adhering to them. For many people who have a fitness plan, their subjective willingness and enthusiasm to exercise may not be strong, and therefore it is not easy to stick to the habit, resulting in unsatisfactory fitness effect. Appropriate incentive feedback can help individuals stick to the plan. The second category is users who have cultivated fitness habits. For fitness enthusiasts, the additional benefits generated by exercising can help them develop new behavioral habits and maintain a certain stickiness to the habits.

For those users who have already reaped benefits in the Play-to-Earn mode, they will certainly hope to earn more in the new Move-to-Earn mode. This group of users will also be important participants in the Move-to-Earn mode.

Move-to-Earn does not Belong to, nor is it Equal to Play-to-Earn

In the encryption circle, many media and KOL tend to classify Move-to-Earn into the GameFi market category, and even equate it to a variant or derivative of Play-to-Earn.

However, after comparing game attributes, user habits, product competition, and the ultimate user experience, CGV Research believes that Move-to-Earn does not belong to, nor is it equal to Play-to-Earn. The two are quite different from each other in the following aspects:

First, one is game, while the other is gamified product.

Whether it’s Axie Infinity’s hyperbolic token economic model, Loot’s unique “bottom-up” game narrative, or StarAtlas’ spectacular interface and engine, these projects are typical of Play-to-Earn. Play-to-Earn encourages players to earn income through games, that is, players provide labor (in the form of time and energy devoted into the game) and capital (usually need to buy NFT to participate in the game), and obtain token rewards after making achievements and progress in the game.

Game is addictive, and many GameFi games have complicated rules that make the game difficult to understand and play. Gamification is a form of expression that is different from game but adopts game rules. In other words, gamification is just a feedback effect logic extracted from game rules.

Advocating investing in health, the Move-to-Earn project develops products and operates them with the idea of “gamification”. When designing and developing many Move-to-Earn products, it is necessary to strike a balance between gamification, token economy and App operation. In this case, developers will further weaken the elements of game, because they can make the game difficult to understand or operate.

Second, one competes for user play time, while the other competes for unit time efficiency.

For the Play-to-Earn project, if you choose to play Axie, you basically cannot play other games at the same time, and the total amount of time each player spends on the game is limited. As one needs to work and sleep with only a few hours left for game, very few people can play 2 or 3 games well.

For the Move-to-Earn project, if you have chosen application A, you can still choose application B at the same time and get more benefits. Let’s call it the “double mining” of fitness mining. Just imagine, when you are running, you can get two, three or even more benefits at the same time, and all you need to do is to keep a few applications running at the background. So, why not?

Here is a simple example to help you understand: the competition between Play-to-Earn projects is similar to that between Facebook and TikTok; while the competition between Move-to-Earn projects is similar to that between Ethereum mining machine and ETC mining machine.

The core difference between the two is as below. Play-to-Earn competes for the total amount of user play time, which belongs to competition in the existing market (everyone’s leisure time for game is limited). In this case, rate of return is the key to competition as high rate of return helps to win more users. While Move-to-Earn competes for the efficiency of user unit time, which belongs to competition in the new market (no upper limit on the number of superimposed products per unit of time). In this case, product experience is the key to competition as a good product experience can help users cultivate usage habits.

In accordance with the above logic, the room for market growth of Move-to-Earn (maybe several times, even dozens of times) is much larger than that of Play-to-Earn.

Third, one pursues fitness, while the other pursues spiritual pleasure.

The carrier of Play-to-Earn is the game, which requires players to stare at the screen for a long time and perform manual operations. In addition to the token income, there is also spiritual pleasure. But in fact, Play-to-Earn leaves players with more tedious click of pages designed with almost the same mechanism than joy in the game itself.

Move-to-Earn frees the player’s hands and eyes, and fully mobilizes the user’s enthusiasm for movement. Regardless of the benefits, the effects of physical exercise are real. However, users of some Move-to-Earn projects “exercise too much”, resulting in problems such as broken feet, knee injuries, muscle strains, etc.

In addition, although the effects of fitness and spiritual pleasure are all difficult to quantify, the social resistance encountered by each user is completely different. Your family or friends will understand and encourage you to engage in fitness, but if you keep playing games, I believe it is more likely that people around you will persuade you not to “indulge in games”, even if you argue “I’m not playing games, I’m making money. “

Where’s the Room for Move-to-Earn Rivals after STEPN Became Popular?

When it comes to Move-to-Earn in 2022, we have to mention STEPN. Objectively speaking, without the explosive growth of STEPN, the Move-to-Earn track may not have aroused public attention so quickly.

The CGV team has prepared some public market data to give a brief review of STEPN’s short but glorious history:

In January 2022, as the first Move-to-Earn NFT game on Solana, STEPN announced the completion of a $5 million seed round with Sequoia Capital India and Folius Ventures as lead investors, making it a big name for a while; in March, Binance Launchpad announced the launch of STEPN governance token GMT. In less than a month (as of this writing), the price of GMT rose from $0.001 to $2.8, an increase of about 280 times, and the peak FDV exceeded $16 billion.

Just seeing these numbers, many people will unconsciously classify STEPN as a type of project controlled or coerced by capital giants, but in fact, as CGV noticed, more details that may not be paid attention to seem to be uncommon in the encryption circle:

— — STEPN’s App once ranked fourth in the Japanese application market, and third among US fitness Apps;

— — In the two weeks from March 16th to 30th, the number of token GST addresses consumed by STEPN increased from 31k to 78k;

— — STEPN governance token GMT surpassed BTC in 24-hour trading volume on Binance Exchange on March 30.

To sum up, both operational data and transaction data reflect the strong momentum of STEPN’s further development. No wonder Scott Dunlap, vice president of Adidas, praised STEPN many times on social media: “STEPN will become the dark horse of the industry in 2022” and “more people will be obsessed with STEPN”.

In my opinion, STEPN’s success today can be attributed to the convergence of developments in blockchain underlying technology, token economic system, NFT market, etc. and it fully enjoys the dividends of the development of the encryption industry.

First, it is based on the latest development of the blockchain infrastructure layer.

One example is the improvement of public chain performance. The Solana public chain preferred by STEPN is known for its high scalability, fast execution speed and low cost. This guarantees reliable interaction of STEPN functional modules, NFT and digital assets, and ensures a smooth user experience. This undoubtedly greatly narrows the user experience gap between Web2 and Web3.

Just imagine, if STEPN was launched directly on Ethereum two years ago, repairing a sneaker would cost 30 minutes to execute command, and dozens of dollars. How discouraging?

Second, it is based on the development of the dual-token model and economic system design of Play-to-Earn.

As the representative of Play-to-Earn, Axie has created a dual-token model and economic system design. If you’ve played so-called free mobile games, you’ll understand the gold and diamond system. Gold coins are not valuable, diamonds are the real scarcity, you have to work very hard to get them, or you can buy diamonds directly with fiat currency.

One of the most interesting parts of STEPN’s profit model is the dual token system. The logic of gold coins and diamonds is replaced by GST and GMT respectively. While players can get both, GMT is in limited supply, of higher value, and more difficult to acquire. In contrast, GST is the fuel that players consume to do different tasks in the game.

Third, it is based on the continuous explosive growth of the NFT market and the extensive education of users.

In 2021, driven by factors such as celebrity effects (such as Madonna and other stars buying Bored Apes for more than $500,000) and the popularity of metaverse, the collection of digital avatars became hugely popular and ignite the entire NFT market. According to NonFungible data, the transaction volume of NFT reached $17.6 billion in 2021, a 210-fold increase from $82 million in 2020.

NFT energy is intoxicating. Numerous startups, multinational corporations, A-listers, Hollywood studios and many others came together to discuss and celebrate the disruptive potential of NFT in their respective fields. And today, this trend shows no sign of slowing down.

Traditional commercial brands that have exploring NFT business Source:Counterpoint Research

If there is no explosive growth of NFT project and NFT market education, how difficult it would be to convince a user to spend nearly 1,000 US dollars to buy a pair of virtual NFT running shoes, and that two pairs of running shoes would mint new running shoes? You know, until 2021, they all seem to be ridiculous jokes.

The popularity of STEPN has stimulated many competing products. However, no single project can monopolize a track. STEPN also has its own “Achilles’ heel” and it’s not perfect.

CGV believes that new breakthroughs may be possible in the following directions for Move-to-Earn competitors:

First, duplicate STEPN. It sounds bizarre, but think twice, and it seems to be a probably feasible direction. As mentioned above, in the “Move-to-Earn App” mode, when two mining machines (Move-to-Earn App) of the same model and power are powered on at the same time, the benefits are superimposed with no influence on each other.

Second, support more scenarios. STEPN currently only supports limited outdoor fitness scenarios such as walking and running. It needs to be connected to the GPS system. It does not cover outdoor scenarios such as cycling, mountaineering, and skiing. It also cannot support related data for indoor fitness such as treadmill exercise, etc. These are all potential opportunities.

Third, lower the threshold for users to use. At present, STEPN users entering the world of Move-to-Earn need to spend at least 800U to buy shoes, which is not a small expense for many users. If they can experience the App with a cost equal to a few cups of coffee, it will be easier for them to get involved. Although STEPN plans to enable rental function, no specific details have been revealed yet, and we will continue to keep an eye on that.

In addition, it is also very important to develop more ways of interaction between fitness and socializing. CGV believes that Move-to-Earn may be the easiest way to get to SociaFi. The generated data pictures of fitness App visualize the fitness. Social platforms such as Facebook and Instagram provide a coordinated self-display stage for the fitness population. Therefore, the combination of fitness with socializing will bring huge user stickiness and faster fission speed to the Move-to-Earn project.

Move-to-Earn’s “First Half” Risks and “Second Half” Opportunities

Whether it’s GameFi, Play-to-Earn project, or X-to-Earn project, they all have their own cycles, ranging from weeks to months or even years. Will the Move-to-Earn project be a “flash in the pan” as the popularity drops, prices drop, old players get bored, or numerous imitations pop up?

CGV believes that the development and effective operation of the economic system is the key for the Move-to-Earn project to making breakthroughs in the bottleneck period and further opening up new prospects.

In a simple analogy, we can compare the economic system to a cistern. If the amount of water flowing into the cistern (the total cost of the user for the project) exceeds that of the water flowing out of the cistern (the total revenue the user gets from the project), the economic system can rely on internal circulation for continued functioning.

In the same way, for a certain Move-to-Earn project, if there are more users who make money than users who spend money, then this is a game of “left foot on right foot” in which the money earned by users must be the money lost by latecomers.

In addition, the speed of water flowing in and out needs to be strictly controlled to prevent the water from flowing out too fast within a certain period of time and causing the reservoir to dry up.

The root cause of the failure of previous projects such as IWC also follows the above logic. The gameplay of IWC is that players need to invest in scrolls and generate candy tokens through scrolls and activity. At the end, the game became a relay race to attract more latecomers. Candy tokens were continuously issued without consumption scenes, and as a result, the price fell sharply, resulting in stampede collapses and the reservoir dried up.

For projects that adopt the “dual currency mode” such as Axie and STEPN, in terms of economic model, the balance mechanism of token minting and destruction is gradually explored, which provides an important foundation for the inflow and outflow control of the water speed of the reservoir.

For example, STEPN creates a variety of scenarios for the consumption of GST tokens and governance tokens GMT to facilitate use, such as using GST to upgrade shoes, speed up the upgrade time, repair shoes, synthesize new shoes, etc.; at the same time, control the output of GST and GMT to reduce selling pressure. It is difficult for players to simply seek rent through mining and selling, and asset returns are implicitly limited and diversified. This prevents the project from falling into a death spiral to a certain extent.

CGV believes that the Move-to-Earn boom has just begun, and the “second half” of Move-to-Earn is about to start. In the next few months or 1–2 years, we may see the following new changes:

**The first encrypted application with tens of millions of users will be born. **In 2022, the trend of Move-to-Earn will sweep across the entire Web2 and Web3 fields. Whether it is encryption users, fitness experts or KOL from all walks of life, they will all be moving with this trend and will spontaneously promote it. Play-to-Earn’s Axie was once very popular in 2021, capturing millions of users, and Move-to-Earn’s users will greatly exceed that number. After all, the number of people walking and running is much larger than that of people who play krypton gold games.

ASICS is the first sportswear brand to enter the NFT field

**“Fitness as mining” has become the classic mode of X-to-Earn. **Fitness may be the best application scenario for X-to-Earn. The Move-to-Earn mode makes the concept of “fitness as mining” popular with the people. Coupled with the exploration and practice of a series of applications represented by STEPN in the token economic model, it has set an example for more scenarios to explore the X-to-Earn mode. At the same time, as more Move-to-Earn projects will be launched, they will provide users with more diverse and personalized options for fitness incentive “mining machine”.

**The cooperation between encrypted applications and traditional business has entered a new chapter. **The encryption movement is rapidly entering mainstream business. Not only are traditional financial institutions investing capital in crypto assets, but many mainstream consumer brands are embracing NFT, such as Visa buying CryptoPunk, and Coca-Cola and McDonald’s launching NFT souvenirs. The Move-to-Earn application scenario is not only applicable to traditional business partners such as fitness hardware, App, clothing and apparel brands, and luxury fashion brands, but also fully integrates encryption economic elements such as NFT and encrypted assets, opening up new possibilities for the cooperation between traditional business and encrypted applications.

A16z co-founder Chris Dixon said more than a decade ago that “the next big thing will start out looking like a toy.”

Move is boring and repetitive, but Move-to-Earn is a kaleidoscope.

Perhaps, we can catch a glimpse of the prototype of the “next big thing” Web3 application from the innovation of Move-to-Earn.

About CGV FoF: CGV FoF is an Asia-based Fund of Funds (FoF) that focuses on investments in Crypto Fund and Crypto Studio. CGV FoF is composed of family funds from Japan, Korea, and China’s mainland and Taiwan, with headquarters in Japan and branches in Singapore and Canada.

Introduction

In the past year, BSC, Solana, Avalanche, and other public chains have been challenging Ethereum. However, after several rounds of market test, Ethereum has been evidenced to be a strong player other than Bitcoin. Ethereum is still attractive to developers and longtime practitioners due to its security, decentralization, and ecological development.

In CGV’s view, Ethereum will gradually evolve into the underlying infrastructure of the blockchain and become the undisputed king of the public chain. However, Ethereum has disadvantages such as congestion and increasing costs. The scalability and optimization of Layer 2 and other technologies based on Ethereum will become the main trend of future development.

CGV found through L2BEAT data that as of March 3, the total value locked (TVL) on Ethereum Layer 2 was $6 billion, which exceeded that on most public chains. The Layer 2 ecosystem and users are getting bigger and bigger. Ethereum Layer 2 scaling solutions break through the existing performance limitations and facilitate a larger ecosystem. Next, CGV will introduce you several Layer 2 solutions.

1. Basic introduction to Layer 2

Layer 2 is a scaling solution. It is mainly to improve the scalability related to the “impossible triangle” problem in the blockchain industry, that is, to enhance the operational efficiency of the blockchain while reducing costs. Layer 2 has a separate execution layer (where the code runs, in an environment such as EVM) and runs on top of L1 (L1 is Ethereum in our discussion).

Let’s put aside the difficult technical terms for the time being, and take the central bank as an example. If Ethereum is the central bank, and Layer 2 is the commercial bank. All monetary assets are issued and settled at the central bank. To avoid the congestion caused by processing all the business, the central bank allows commercial banks to handle part of the business first and then settle the business results at the central bank, thus improving the efficiency of the business operation.

Layer 2 can do most of the computing for Layer 1, such as separating Ethereum transactions from the main chain, reducing the burden on Layer 1, improving business processing efficiency, thus achieving scalability. Layer2 may only reach partial consensus, but it can meet the needs of various business scenarios.

The scaling technology of Layer 2 has roughly gone through: a process from side chain → Lightning Network → Plasma → Rollup. When the Layer 2 enters the Rollup stage, it achieves great improvement. The Rollup solution not only provides users with near-instant transaction speed, but also significantly reduce costs, while maintaining the security and decentralization of the Ethereum mainnet.

At present, there are two main types of Rollup scaling solutions, namely, Optimistic Rollup and Zero-Knowledge Rollup (ZK-Rollup). Next, CGV will introduce these two scaling solutions.

2. Two types of Rollup solutions: Optimistic Rollup and ZK-Rollup

2.1 Optimistic Rollup — L2 using “fraud proofs”

Optimistic Rollup not only inherits the good security of the underlying L1 chain, but also provides lower cost and higher throughput than L1. Optimistic Rollup assumes that the transaction sent back to the mainnet is legitimate, and the transaction will only be rejected if the validator can prove that the transaction is fraudulent by submitting a fraud proof. In other words, Optimistic Rollups take an “innocent until proven guilty” approach to verifying transactions.

Next, CGV will mainly introduce two types of Layer 2 adopting Optimistic Rollup: Arbitrum and Optimism.

2.11 Arbitrum

1) Basic introduction

Arbitrum is a mainstream Optimistic Rollup launched by the Offchain Labs team. Due to Arbitrum’s compatibility with EVM, the Apps on the L1 network can be seamlessly migrated to the L2 network, which means DeFi and NFT projects can easily migrate their codes to scaling solutions.

Arbitrum leverages the ability to communicate between L1 and L2, allowing arbitrary forms of Ethereum assets to be transferred between Layer 1 and Layer 2 without trust. Although the transactions on Arbitrum are still settled on Ethereum, Arbitrum only submits raw transaction data to Ethereum, and execution and contract storage are performed off-chain. Therefore, compared with Ethereum mainnet, the gas fee required by Arbitrum is very low, and the contracts are fully compatible.

Let CGV briefly summarize Arbitrum’s features: extremely low transaction fees, no trust required, secure funds with Ethereum mainnet-level security through cryptography, user-owned assets, almost 100% compatibility with EVM.

2. Ecological development

When Arbitrum was launched on the mainnet, 74 projects including Uniswap V3, Aave, Curve, and MakerDAO were deployed. Based on the data of arbitrum browser, CGV found that the online trading volume of Arbitrum showed an upward trend. On March 3, the number of transactions exceeded 120,000.

source:arbiscan.io

According to L2BEAT data, as of March 3, the TVL of Layer 2 on Ethereum was $6 billion, which exceeded that on most public chains. Among them, Arbitrum is the scaling solution with the highest TVL, which is $3.26 billion, accounting for 54.3%.

Based on these data, we can find that in the short six months since the launch of Arbitrum, apart from the early migration projects, more and more projects have been added to its ecology. For example, TreasureDAO is such a project that has been widely known within a short time. If you want to know about TreasureDAO, please read CGV Research’s report.

TOP 10 Projects by TVL on Arbitrum

Currently, the new projects mainly built on Arbitrum include GMX, Dopex, Tracer, Premia, Umami Finance, Swapr, Cap, etc., with the TVL exceeding more than $20 million for each project.

CGV also found that Arbitrum attaches great importance to accessing flow pool that can be converted. Arbitrum cooperates with mainstream exchanges such as Binance, FTX, OKX, Huobi and some payment channels, allowing users to deposit and withdraw funds directly on the L2, which significantly expands the user base.

In the future, L2, with its superior performance and thriving ecosystem, will gain more and more popularity. Arbitrum is improving its infrastructure, and its potential has been gradually realized. For the emerging L2, Arbitrum undoubtedly has the first-mover advantage.

2.12 Optimism

1. Basic introduction

Optimism, formerly known as the Plasma Group, is the development team of the Optimistic Rollup. Optimism leverages all existing tools in the Ethereum ecosystem and modifies them to implement their optimistic protocol and L2 solution, which enables low fees, low latency and high throughput by running computations off-chain. As optimism can obtain security protection directly from the Ethereum mainnet, it not only retains the security of Ethereum mainnet, but also ensures scalability.

On Optimism, transaction data is compressed and sent to the Sequencer Entrypoint contract on L2. Sequencer will be rewarded for executing transactions correctly and be penalized if they act in bad faith by reducing collateral funds, which may result in longer withdrawal times for Optimism. This issue can be fixed by cross-chain bridges such as Synapse and Hop exchange.

2. Ecological development

Excellent compatibility has created excellent conditions for the establishment of the Optimism ecosystem. As of March 3, the TVL on Optimism reached $469 million US. Projects such as Uniswap, Syntheti, Lyra, Rubicon, Kwenta, 1inch, WePiggy are all built on Optimism. Additionally, the number of wallets, tools, and cross-chain bridges that support Optimism is increasing.

Next, CGV will intuitively introduce the development of the Optimism ecosystem with some data. Since November 2021, the daily trading volume on Optimism has maintained a high level of growth, with a peak of 90,805 in a single day. Although the daily trading volume has dropped recently, it remains above 20,000.

source:dune.xyz

Synthetix came in first with the TVL of $118 million, accounting for 45.45% of all transactions on Optimisms. The option protocol Lyra on the Synthetix ecological chain temporarily ranks second with the TVL of $37.04 million. The main projects of Optimism are temporarily based on the Synthetic ecology, which is related to Synthetix’s support for Optimism.

source:footprint.network

Compared to Arbitrum, there are relatively few DApps built on Optimism, but it ranks fourth among all L2s in terms of the TVL, due to Optimism’s excellent compatibility. With the gradual improvement of Optimism, more projects will be built on Optimism in the future.

2.2 ZK-Rollup — L2 using “validity proofs”

The ZK-Rollup solution generates a proof of encryption when the transaction is packaged into the mainnet to prove that the transaction is legitimate. Only after the proof of encryption is verified, the transaction will be accepted on Ethereum. Unlike Optimistic Rollup, ZK-Rollup adopts the method of “guilty until proven innocent” to conduct verification. Next, CGV will mainly introduce two types of Layer 2 using ZK-Rollup solution: zkSync and Starkware

2.21 zkSync

1. Basic introduction

Invented in December 2019, zkSync is a scaling solution developed by the Matter Labs, a European team, that uses ZK-Rollup technology to process transactions on the Ethereum blockchain while still maintaining its security. Gas fees are equal to 1% of Ethereum gas and cheaper than using Optimistic Rollup. It can process 2000+ transactions per second (tps) compared to 14tps on Ethereum. Additionally, it has the ability to transfer assets back to L1 at any time.

The zkr solution of zksync 1.0 provides very limited functional application scenarios. Therefore, the main task of zksync is to launch zksync 2.0 and build an ecosystem based on it. Once the protocol becomes more mature, its focus will shift to privacy and decentralization.

2. Ecological development

In March 2021, Matter Labs completed the Series A financing of $6 million led by Union Square Ventures for zkSync, the most promising L2 scaling solution. Before the launch of zkSync 2.0, zkSync has successively attracted strategic partners such as a16z, Dragonfly, 1kx, OKX, etc., attracting the migration of a large number of dApps, and the participation of CEXs that support fund transfers between exchanges and L2.

On February 22, the zkSync team announced that the zkSync 2.0 public testnet was officially launched, which means that the first ZK Rollup that is compatible with EVM on Ethereum test network began to run. With the continuous improvement of zkSync, the current number of ETH locked in the zkSync L2 network has exceeded 90,000. The total number of transactions transferred from the Ethereum mainnet to the zkSync L2 network has surpassed 350,000. The total value locked has reached $72 million. Among them, the number of independent addresses is about 240,000. It is worth noting that the actual number of zksync L2 activated accounts should be higher than the number of independent addresses, because users can activate accounts directly through the fund transfer between L2s.

source:dune.xyz

CGV found that although zkSync has no specific timetable for the issuance of tokens, its team has revealed earlier that after the zkSync mainnet is launched, 1/3 of zkSync’s tokens will be reserved for the team and investors, and the remaining will be distributed to the community. zkSync token is the fee token of the zkSync network.

source:dune.xyz

Matter Labs focuses on investing resources to build the zkSync ecosystem. It announced the establishment of a $200 million DAO organization earlier this year, which will help expand zkSync ecosystem through public products, infrastructure, security frameworks, R&D grants, and investments in other encryption organizations.

2.22 StarkWare

1. Basic introduction

Founded in 2018, StarkWare is an L2 scaling solution based on STARK and ZK-Rollups. It mainly improves the scalability and privacy of blockchain. StarkWare has developed a complete solution that uses STARK technology to form Volition through zk-Rollups and Validium modes to generate and verify the proof of computational integrity. StarkWare’s cryptography proof can achieve zero-knowledge, simplicity, transparency, and post-quantum security.

One of StarkWare’s key contributions was the invention of STARKs (Scalable Transparent Arguments of Knowledge), a form of validity proof with a completely trustless setup that enables offloading all on-chain computation off-chain to a single off-chain STARK prover.

The main products developed by StarkWare are: StarkNet, StarkEx, Cairo. StarkNet is a permissionless, decentralized L2-ZK-Rollup based on the Stark zero-knowledge proof developed by the Starkware team on Ethereum. StarkEx is an L2 scalability engine developed by Starkware that enables the execution of such functions in a zero-knowledge environment through Cairo, assembly-language-like program. Cairo is a Turing-complete language, and StarkNet is based on Cairo and supports general-purpose computing on Ethereum.

With StarkWare as the Layer2 solution supporting the dYdX and Immutable, we can experience the great scalability provided by the StarkWare solution.

CGV briefly summarized the features of StarkWare: good scalability and privacy, and excellent user experience.

2. Ecological development

From the very beginning, StarkWare has attracted investment from the world-class capital such as Paradigm, Ethereum Foundation, IOSG, Multichain Capital. Vitalik, founder of Ethereum, who is optimistic about ZK rollup scaling solution, is also an early investor of starkware.

Currently, the TVL of StarkWare has exceeded $1.2 billion, and important protocols such as dYdX, Sorare, DeversiFi, Immutable, and Celer Network have been deployed on StarkWare. According to L2BEAT data, among all L2 projects locked, dYdX alone accounts for nearly 17% of the TVL, with its TVL reaching nearly $900 million.

After comparison, CGV found that StarkWare is superior to zkSync in terms of performance and current operating conditions, and the StarkWare team has excellent PR and team organization skills, long-term strategic planning of the project, and strikes a balance between technology and commercialization.

3. Summary

In CGV’s view, 2022 will be the year when Layer 2 explodes. The operation of Layer 2 on Ethereum is a economically and technically sustainable scaling solution, and Rollup is undoubtedly the most popular option among Ethereum scaling solutions.

The development of Layer 2 has just begun. In CGV’s view, with the continuous advancement of Ethereum Layer 2 solutions, Ethereum will gradually evolve into the underlying infrastructure of blockchain, and some previous L1 side chains or public chains will be transformed into Ethereum Layer 2 subsequently, which will further stabilize the status of Ethereum.

CGV deems that in terms of opportunity, we should focus not only on Rollup’s native tokens, but also on emerging projects that find a user base on these Rollups.

Note:This article is a CGV FoF research paper and is for reference only. It does not constitute any investment proposal.

About CGV FOF: CGV FoF is an Asia-based Fund of Funds (FoF) that focuses on investments in Crypto Fund and Crypto Studio. CGV FoF is composed of family funds from Japan, Korea, and China’s mainland and Taiwan, with headquarters in Japan and branches in Singapore and Canada.

Reference

1. https://arbitrum.io/

2. https://developer.offchainlabs.com/docs/developer_quickstart

3. https://developer.offchainlabs.com/docs/rollup_basics#executing-and-securing-the-chain

4. https://developer.offchainlabs.com/docs/rollup_basics#submitting-transactions

5. https://www.optimism.io/

6. https://community.optimism.io/

7. https://medium.com/ethereum-optimism/introducing-evm-equivalence-5c2021deb306

8. https://research.paradigm.xyz/optimism#data-availability-batches

9. https://community.optimism.io/docs/protocol/protocol-2.0/#

10. https://matter-labs.io/

11. https://cryptoexplainere60.substack.com/p/zk-world-pt-3-zksync?s=r

12. https://vitalik.ca/general/2021/01/05/rollup.html

13. https://starkware.co/

14. https://www.bloomberg.com/news/articles/2021-11-16/sequoia-led-round-values-blockchain-firm-starkware-at-2-billion

15. https://multicoin.capital/2018/10/30/our-investment-in-starkware/

Blockchain technology is constantly changing the way we work, live, study and play. As far as the evolution of cryptocurrency market is concerned, 2021 is a very eye-catching year: we have seen the rise of many new blockchain projects, challenging the dominant position of Ethereum. The market value of various digital currencies such as BTC has reached an all-time high, and the dazzling NFT boom has pushed forward the large-scale implementation of blockchain technology.

In the tide of encryption technology, Crypto Review came into being. Initiated by cryptogram venture (CGV), with the purpose of “providing in-depth value reference for global encryption practitioners”, crypto review is committed to providing meticulous industry insights, the best investment and research practice guidance to encryption professionals and enthusiasts all over the world, And expand the positive impact of encryption consensus on more institutions and the wider population.

Crypto Review is not for profit and adopts the recommendation and invitation system. The content covers: 1. Encryption trends. Pay attention to the technology, management, industry and even macro factors that will affect the behavior of the encryption industry; 2. Overview of the track. Share the latest Overview Research and analysis based on a specific vertical field; 3. Project analysis. Comprehensively and deeply interpret the early dark horse project and star project, and systematically interpret their design concept and mode.

The encryption world is changing with each passing day, and the opportunity of the encryption world is fleeting.

We hope *Crypto Review *can precipitate more valuable thoughts and really help encryption practitioners understand the present and see the future in the torrent of the times.

The following is a selection of crypto review articles (January 2022)

TRENDS

《The Web3 Playbook: Using Token Incentives to Bootstrap New Networks》

Original link：https://future.a16z.com/the-web3-playbook-using-token-incentives-to-bootstrap-new-networks/

CR Recommendation：

a16z which is the author’s organization is the largest investor in Web3. The full text is concise and insightful. It is impressive to predict and analyze the world of Web3 from the perspective of the history of Internet development. It remains to be seen how amazing diversity and potential Web3 will show.

《Blockchains are cities》

Original link：https://medium.com/dragonfly-research/blockchains-are-cities-564327013f86

CR Recommendation:

The world of blockchain is abstract and obscure, especially the public chain. However, the author compares the public chain with different cities such as San Francisco and Chicago, vividly shows the competition pattern of various mainstream public chains, and boldly puts forward his own assumptions based on the realistic logic of urban development. Perhaps, we can perceive the outline of the future public chain world in advance.

《Cars, Ownership, Capitalism, NFTs, and the Metaverse》

Original link：https://ysiu.medium.com/cars-ownership-capitalism-nfts-and-the-metaverse-f72e5844a7b3

CR Recommendation:

NFT represents a paradigm shift in the online world. Everyone can truly own their own digital assets in a decentralized and scalable way. The property right mechanism based on openness, fairness, user ownership, property rights and non-zero sum method will further form a better state or social pattern. Perhaps this will finally truly form the end of the meta-universe ideal in the author’s eyes.

《Great Protocol Politics》

Original link：https://foreignpolicy.com/2021/12/11/bitcoin-ethereum-cryptocurrency-web3-great-protocol-politics/

CR Recommendation:

Technology has changed not only the global order, but also the nature of companies and countries themselves. Standing at the height of human history and civilization, the author forecasts and analyzes the world change caused by the development of a new generation of innovative technology represented by crypto technology. The importance of crypto protocol is underestimated. It can protect property and execute contracts beyond the boundaries of traditional nation-state. The author’s view is refreshing.

FIELDS

《How to define MetaFi and MetaFi’s framework（excerpt）》

Original link：https://outlierventures.io/wp-content/uploads/2021/12/OV_MetaFi_Thesis_V1B.pdf

CR Recommendation:

When metaverse meets DeFi, what kind of spark will it produce? This is an excerpt from outslier ventures’ comprehensive analysis and interpretation report on the new concept of MetaFi. The article puts forward that the main growth of DeFi in the future will not be driven by CeFi, but to release value by MetaFi. MetaFi will be an economic system parallel to the legal financial system. In this case, we need to think about MetaFi from the perspective of financial inclusion.

《Building and Running a DAO: Why Governance Matters》

Original link：https://future.a16z.com/building-and-running-a-dao-why-governance-matters/

CR Recommendation:

The early well-known DAO “the DAO” did not develop smoothly, because it was impossible to find an incentive model that could encourage voters to highly participate in DAO affairs. Now, with the rise of DeFi, new “DeFi DAOs” begin to appear. They use the economic reward mechanism to encourage people to participate in these systems. In addition, DAO organizations continue to add new collective skills and modify the governance process in time, which makes the development of DAO in 2022 worth looking forward to.

《Where the Multi-Billion Dollar Crypto Derivatives Market is Headed Next》

Original link：https://jumpcrypto.com/state-of-crypto-derivatives-market/

CR Recommendation:

Although the crypto derivatives market has a huge volume, the market structure needs to be improved. For example, the trading volume of crypto options accounts for about 2% of the spot; In the US stock market, the figure is about 35 times. Considering the rise of centralized and decentralized option infrastructure, the growth of decentralized perpetual contract trading volume, and the innovation of encryption original business, the author is optimistic that 2022 will become the year of encryption derivatives.

《Competitive outlook for Layer-1 platforms and Ethereum’s scaling solutions in 2022（excerpt）》

Original link：https://www.theblockcrypto.com/post/127723/the-block-research-2021-digital-asset-outlook-report

CR Recommendation:

Although Ethereum plans to switch to PoS mechanism in June 2022, according to the road map, Ethereum needs to upgrade for several years to complete the segmentation, that is the real Ethereum 2.0. Although there are many debates about the design and advantages of each public chain, the vigorous development of multiple public chains shows that as long as there is demand in the market, they may occupy a place in the future. Therefore, in the next few years, the new public chain will compete not with Ethereum, but with various solutions of Ethereum L2. The multi chain pattern of the whole industry will further develop, and cross chain interoperability will become more important.

PROJECT

《Introducing Lockdrop + LBA: A Novel Token Launch Mechanism》

Original link：https://members.delphidigital.io/reports/introducing-lockdrop-lba-a-novel-token-launch-mechanism/

CR Recommendation:

Both “Lockdrop” and “liquidity Bootstrap Auction (LBA) “represent the new basic elements of token issuance. Delphi chose to combine the two elements to better meet the important goal of providing all liquidity and price discovery on the basis of decentralization. Perhaps this will become a new paradigm of token distribution mechanism in the future.

《Why Solana May Become the iOS of the Encrypted World?》

Original link：https://www.newsbtc.com/news/company/cgv-research-why-solana-may-become-the-ios-of-the-encrypted-world/

CR Recommendation:

Comparing Solana with Apple iOS, the author’s idea seems to be very bold and radical, but from the first principle thinking, the winners are similar, and the success paths they follow overlap. The cross temporal and spatial comparison between encryption and Internet in different fields gives us a new dimension of thinking about encryption projects with growth potential.

For more information, please refer to Crypto Review (JAN, 2022). Just click to download:https://drive.google.com/file/d/1c9BMO_OselHm1QIWh-M9bqiaxQQCyqDC/view

About CGV FoF: CGV FoF is an Asia-based Fund of Funds (FoF) that focuses on investments in Crypto Fund and Crypto Studio. CGV FoF is composed of family funds from Japan, Korea, and China’s mainland and Taiwan, with headquarters in Japan and branches in Singapore and Canada.

The continuous expansion of metaverse projects exacerbates homogenization. The strategy of betting on projects that can continuously expand the ecosystem, empower games and NFTs may be better than betting on new projects.

While most industries have struggled to survive since the outbreak of the Covid-19 pandemic in 2020, the Axie Infinity of GameFi has swept the globe, creating wealth for many families and attracting a host of users outside the cryptocurrency world to participate in the blockchain game featured with “Play to Earn”.

At a time when more and more projects focus only on making games, CGV finds that the Treasure run by DAOs that blurs the boundaries between NFTs, games, DeFi, and the metaverse, seems to be the next Nintendo.

What is Treasure?

Treasure is an NFT trading market and metaverse core infrastructure built on L2 (Arbitrum) and managed by DAOs. Treasure hopes to serve as a bridge in the metaverse, connecting the growing metaverse network and integrating NFTs, DeFi, and games through openness and composability.

On Treasure’s NFT marketplace, in addition to selling its NFTs, it sells NFTs of its partners. In the future, it may be possible to trade unpartnered NFTs, using Treasure’s token MAGIC as the medium of exchange. MAGIC will be used and consumed in Treasure’s metaverse games in addition to the NFT marketplace.

1. Treasure’s Game: Bridgeworld

Treasure turns MAGIC into the “reserve asset” in the metaverse and makes use of Treasure (NFT | resources) and Legions (NFT | players) for ecological construction. CGV learned that the relationship between the three is that MAGIC is the power of the game world, Treasure is the resource that players use to achieve their purpose, and players need MAGIC and Treasure to give them purpose in the game, and they support each other.

Treasure is developing an interactive game — Bridgeworld. Players are mainly legions; soldiers mine MAGIC and use Treasure to upgrade their level. The game provides various maps, a legion protects the Treasure in the center of the map, while another legion launches strikes, and the winner retains the Treasure.

2. Treasure’s NFT marketplace: Treasure Marketplace

Treasure Marketplace is Treasure’s NFT marketplace built on L2 (Arbitrum), and all transactions on this marketplace are performed using MAGIC. Part of the transaction fees will be used to award TreasureDAO.

On the Treasure Marketplace, in addition to trading its NFT projects (such as Treasure and Legions), the NFTs (such as Smol Brains, etc.) of partners can be traded. It seems that Treasure is not satisfied with the current L2 curated NFT marketplace. In the future, it will try to become the L2 general NFT marketplace.

According to market information, CGV learned that as of January 12, 2022, the trading volume of NFTs in Treasure Marketplace exceeded 33.9 million MAGICs, or approximately $68.6 million.

3. TreasureDAO

DAO plays an essential role In Treasure. Treasure is managed by TreasureDAO, and all decisions are proposed by TreasureDAO and voted on by MAGIC holders. A 5% commission on transactions in the Treasure Marketplace will be distributed to TreasureDAO.

Treasure’s economic model

The total number of MAGIC is 320 million and players obtain MAGIC by playing games, mining tokens, and participating in Bridgeworld.

Treasure has created an ecosystem that fully leverages MAGIC, which can be used to purchase useful items and unique NFTs, such as in-game treasures and players, as well as in-game items and NFTs for cooperative projects.

The strategy of early DeFi and GameFi projects is to attract users with high APY, but users do not stay for a long time and often choose to sell for profit, which is fatal to the long-term development of the projects. Treasure has optimized this strategy in the economic model. It does not pursue high APY, but gradually reduces LP rewards in the mining process, and cooperates with SushiSwap and Olympus to launch liquidity mining and bonds, significantly lowering the sell-off pressure of MAGIC and boosting MAGIC’s liquidity.

Partners of Treasure

By partnering with projects such as Smolverse series, Life, Imperium, Mural, Olympus, and others, Treasure is creating a shared economic model for the metaverse, and MAGIC will power all these projects.

Some of Treasure’s collaborative projects

1. Smolverse series

Smol Brains is an NFT project based on L2 (Arbitrum). By staking Smol Brains, the owner can accrue IQ points while continuously unlocking free Smolverse series NFTs, such as Smol Cars, Smol Pets, etc.

*Source: *https://www.smolverse.lol/

With the improvement of Smol Brains’ IQ and the combination of a series of NFTs, Smol Brains will embark on an exciting adventure.

Note: The period of distributing Smol Brains for free has ended. Nowadays, players have to buy MAGIC on the Treasure Marketplace to exchange them.

2. Mural

Mural is a cross-Layer2 network and cross-chain NFT transmission solution. The collaboration between Mural and Treasure enables NFTs on the EVM compatible chain (L1) to be bought, sold and stored on the Treasure Marketplace. Treasure can enable game applications on Lay1 to be used on Layer2, significantly reducing the cost of players.

3. Olympus Pro

Treasure and Olympus Pro launched the MAGIC-ETH <> MAGIC-gOHM.

Source: https://pro.olympusdao.finance/#/partners/TreasureDAO.

Users can buy Magic bonds at a low price with LP, and Treasure sells Magic at a discount for LP. Treasure improves its liquidity in a more efficient way.

Note: We only list some of the projects in cooperation with Treasure.

Comparison of Treasure and Nintendo

The development of traditional games has undergone many stages, and numerous industry giants like Nintendo, Blizzard have emerged. As one of the most influential and renowned game platform manufacturers, Nintendo has created many famous characters in the history of gaming, such as Mario, Donkey Kong and developed the most classic games in the history of gaming, such as The Legend of Zelda.

The charging model of the game operation platform has developed from the initial product agency and time-based charging to today’s prop-based charging, which provides a rapid development opportunity for the current combination of game props and NFTs.

Since 2020, the COVID-19 has caused widespread economic devastation around the world. However, the global video game industry was booming, with the Axie Infinity of GameFi gaining popularity across the globe. More and more users are participating in blockchain games characterized by “Play to Earn”.

At a time when most projects are just building games, Treasure has already built game consoles as scheduled. Treasure not only develops its Legions games, but also collaborates on projects such as the highly participatory Smolverse series and the Life series. Taking Smol Brains as an example, users get free Smol Brains by participating in the ecological construction of Treasure in the early stage. Additionally, users can sell Smol Brains and other NFFs in the Treasure NFT marketplace at any time, and then exchange them for MAGIC. Users can participate in Smolverse’s subsequent adventure games by holding Smol Brains.

With a large number of interesting projects introduced to the Treasure ecosystem, Treasure helps users screen out most of the unreliable projects, which will not only reward participants but also deepen their trust in Treasure. Besides, anyone who trusts Treasure will participate in the metaverse world created by Treasure. TreasureDAO adopts the governance mode of DAO, where the community can participate in the governance, voting and revenue distribution of projects. At this point, we will see a brand new gaming console.

Summary

With the continuous construction of the Treasure’s Metaverse Bridge, the MAGIC will be extensively used in DeFi, games, NFTs and other scenarios, which will constantly attract the deep participation of users and projects.

It’s worth nothing that Treasure is a project built on L2, and it will take some time for the public to accept L2; Treasure has not launched any games, which may cause potential risks.

Treasure is weaving its web in accordance with its plan. We don’t know how far it can go, but as long as one of the breakthroughs is made, Treasure will usher in a booming development.

Note:This article is a CGV FoF research paper and is for reference only. It does not constitute any investment proposal.

About CGV FOF: CGV FoF is an Asia-based Fund of Funds (FoF) that focuses on investments in Crypto Fund and Crypto Studio. CGV FoF is composed of family funds from Japan, Korea, and China’s mainland and Taiwan, with headquarters in Japan and branches in Singapore and Canada.

Reference:

*1. *https://www.treasure.lol/

*2. *https://docs.treasure.lol/

*3. *https://treasure-marketplace-analytics.herokuapp.com/analytics

Do Solana and iOS have a lot in common? It just seems like a hunch. However, after analyzing and comparing the two carefully from the historical and current perspectives, I got an astonishing finding: the previous intuition may be incredibly close to some type of truth. Moreover, a bold prediction came to my mind: one day in the future, Solana may become the iOS in the encrypted world.

In my view, although iOS and Solana belong to the Internet and encrypted worlds, respectively, they share the same logic of the first principle that supports their development.（The following conclusions were jointly organized by **CGV FOF **research team.）

Firstly, the ultimate user experience.

User experience, as the core competitiveness of a product, has been mentioned repeatedly. Due to Apple’s relentless efforts for the ultimate user experience, iOS seems to be always smoother than Android.

Virtual keyboard was not created by iPhone. Microsoft, Palm, and other smartphone manufacturers have tried to promote smartphones with the full touch screen, but iPhone overcame the technical difficulties in capacitive touch screen, multi-touch, improving the screen touch experience to an untouchable level.

For instance, iOS gives first priority for screen response, and it responds to Touch — Media — Service — Core architecture in order. Simply put, when the user touches the screen, the system will first handle the screen display (Touch); while the priority response level of Android is Application — Framework — Library — Kernel architecture, and display-related graphics and image processing (Library) are only in the third level. There are a host of similar factors, which directly cause a huge difference in user experience between iOS and Android.

Similarly, although Solana is not the first underlying public chain, it has attracted an increasing number of crypto developers and users by providing extremely high TPS and low transaction fees, breaking through the biggest development constraint that most public chains face in the same period.

Performance comparison between Solana and other mainstream public chains — Data source: RareLiquid

For instance, Solana can deal with over 50,000 transactions per second while maintaining a block time of 400 milliseconds, and improve the TPS based on Moore’s Law, thus providing a good “predictability” of TPS scaling. Additionally, Solana’s low transaction fees are impressive, that is, estimated $10 for 1 million transactions.

Among them, Solana’s core consensus mechanism is “Proof of History (PoH)”, which aims to solve the time problem in a distributed network that lacks a single reliable time source. By using a verifiable delay function, PoH allows each node to generate timestamps locally via SHA256 calculations, which improves overall network efficiency by eliminating the need to broadcast timestamps across the time network.

The user experience of public chains can be reflected by the number of crypto wallets and the frequency of use. Take Phantom, one of the most popular wallets on Solana, as an example, it almost integrates all the features of the Solana ecosystem, including token swaps, collection of NFTs and collectibles, connection to hardware wallets, anti-monitoring, Web3.0 support, and the obtainment of incomes through pledging SOL.

Solana Phantom & Ethereum Metamask monthly active users — Data source: Grayscale Building Blocks

Relying on the excellent one-stop experience, Phantom has become the preferred wallet for the users of Solana, with the monthly active users exceeding 1.2 million. During the two months from August to October 2021, the users of Solana on Phantom increased by 5 times.

Secondly, excellent UI design.

The user interface (UI), as a human-computer interaction window for offering various functions required by users, determines whether the software or product is intuitive for users to operate.

iOS has a tight system for platform UI design specifications. From buttons to icon styles, and from image size to resolution, they all require special customization. In this way, it not only unifies the styles of various programs but also helps users to get accustomed to the way of using iOS software. Nowadays, the rounded rectangular design, with only one button on the front and the rest completely covered by a glass panel, has become the iconic design of the iPhone.

The project team should pay attention to UI design whether in the field of Internet, blockchain, or encryption. Besides, a “user-oriented” UI design will make the product more popular and sell better. Dr. Nielsen, an expert in human-computer interaction, claimed that usability is a prerequisite for survival in the field of the Internet. If a website is difficult to use, then users will immediately abandon it.

Some people say that when they buy tokens, they only look at the logo of the project. Though just a joke, it illustrates the importance of the visual design of the project. The logo of Solana reveals that its team that pays attention to details and has good aesthetic skills.

The logo color of Solana is a gradient from green to purple. Similar colors can be found in nature, such as the aurora borealis, mysterious and elegant. In addition, many cyberpunk-themed sci-fi movies often use purple, green, and blue in their images, reflecting the prospects of Solana’s innovative blockchain technology development.

Solana ecosystem (DeFi fields) — Data source: Solanians

Many Solana projects, at first glance, seem to be designed by the same designer, with a very consistent experience in terms of color matching, interface design, and interaction design. The interface is intuitive, concise, and easy to operate. Users can easily operate Solana without much training, as they can understand the functions on the interface at a glance after using the software.

According to CGV FOF, On a well-known Solana IDO platform, the UI performance of a project is given a high assessment priority when reviewing the project. It seems that Solana improves users’ acceptance of Solana from the top down through its incubation and support of projects with outstanding UI.

Thirdly, strong ecological support.

Based on the second law of thermodynamics, isolated systems have no energy exchange with the environment and always change spontaneously in the direction of increasing disorder (entropy), i.e., the principle of increase of entropy. In view of this phenomenon, Prigogine, winner of The Nobel Prize in chemistry, proposed that the system must be open to transferring from a disordered state to an ordered structure, that is, the system must exchange matter and energy with the outside world.

The opening of the business ecosystem requires core companies to enable partners to have access to their resources and capabilities, attract them to join the ecosystem, and achieve value co-creation through mutual empowerment.

Since its inception, Apple has attached great importance to external empowerment, providing external developers with powerful development kits and allowing them to connect users through the app store, thus giving birth to a large number of popular apps such as Instagram, Snapchat, Uber, and WhatsApp. Compared with other platforms, Apple’s release mechanism for developers’ apps is fairer and more reasonable. The download ranking data on the software store is true and reliable, which has created a good competition system and environment for developers, making developers grasp an accurate understanding of what their users really want.

Solana has also devoted a great deal of effort to ecological construction. Solana has a long-term funding plan to provide excellent projects with a full range of resource support, including targeted funding, VC referrals, technical support, recruitment support, marketing, and legal resources.

Development of Solana and other mainstream public chains for active developers — Data source: Santiment

Take the hackathon for example. In 2021, Solana officially held three global hackathons. The most recent hackathon, with a prize pool of $1 million, over 15,000 registrants, and more than 300 projects submitted by developers across the world, attracted the attention and support of a host of developers and generated a series of quality Solana native apps.

Furthermore, it is worth noting that 90–95% of the hackathon developers expressed their willingness to carry out long-term development on Solana. These talented developers will constantly power the Solana ecosystem.

Fourthly, a charming soul figure.

It may be a bit radical to say that Steve Jobs, the founder of Apple, changed the world, but it is fair to say that he was synonymous with the “spirit of innovation” pursued by the United States and all mankind.

Jobs was a giant standing at the intersection of technology and humanities. His combination of idealism and perfectionism enabled Apple to take a completely different route from the traditional industry.

Take simplicity as an example, Steve Jobs’ love of minimalism and his exposure to Buddhism, “let people directly know their heart without words”, exerted a great impact on Apple’s “no button” design. In addition to pursuing minimalism in product design, Jobs took the initiative to eliminate many product lines and only launched 1–2 products each year, with the best quality.

In my opinion, Jobs was to Apple what Sam Bankman-Fried (SBF) is to Solana. I don’t mean to deny Solana’s incredible team, which is just as respected as Apple’s tens of thousands of talented engineers and development teams.

SBF was placed on Forbes’s list of the richest people in the world 2021 — Data source: Forbes

Initially, SBF was a trader and spent his early days at Jane Street, a quantitative giant. He founded Alameda Research (a quantitative trading firm) and FTX (a centralized cryptocurrency exchange) with a team consisting of finance personnel — quantitative analysts, engineers, high-frequency traders. They are seldom concerned with the centralization/decentralization debate and focus on the “large-scale expansion of the blockchain”.

After leaving Jane Street in 2017, SBF took time to think about potential opportunities. He realized that “Cryptocurrency has many characteristics, it may be a very inefficient system, and there is a great demand for liquidity. This is basically: sudden huge demand, very rapid growth.” So, SBF tried to figure out the ultimate solution to these issues. Later, he discovered Solana.

Anatoly Yakovenko, a co-founder of Solana, once described the scene of SBF’s first contact with Solana before it was launched on the mainnet in 2019: During the test, 80 transactions were processed in an average of 4.02 seconds. This result impressed SBF. After communicating with the team and realizing Solana’s huge development potential, SBF immediately decided to establish Serum (a decentralized derivatives exchange) based on the Solana.

In this way, Solana not only won a new application project but also got a perfect encryption spokesperson (just like NBA got James). From that day onwards, Solana was reinvented by SBF.

In January 2021, SBF said on Twitter that, “I’ll buy as much SOL as you have, right now, at $3. Sell me all you want.” Though a joke, it revealed that SBF had high hopes for SOL.

Fifthly, a passionate fan base.

I still remember that in those days, iPhone fans lined up in front of the store all night to buy a new generation of iPhone, hoping to be among the first to own the new iPhone, just as they wished to get tickets to a superstar concert.

The iPhone launched by Apple every year is not only a new product but also a brand-new cultural phenomenon. This is a market effect that no other company is likely to have when launching a new product.

Taking the number of Twitter followers as an example, according to statistics from** CGV FOF**, Solana has as many as 1.1 million followers, which is not as many as that of Ethereum (1.97 million) but ranks first among other mainstream public chains, Polkadot (1.01 million), Avalanche (450,000), Fantom (270,000), and Near (230,000).

Let’s take a look at the fan token, Solana’s meme coin is Samoyedcoin ($SAMO). It was inspired by Dogecoin, Sam Bankman-Fried (containing the letters S, A, and M), and Solana’s co-founder Anatoly Yakovenko (whose hometown is the birthplace of the Samoyed dog). Nowadays, SAMO has become the mascot and promotion ambassador of the Solana ecosystem, and the peak circulation market value of SAMO’s token exceeded $700 million.

In the Solana community, you can often feel a completely different atmosphere from any other public chain community. We often see the “fierce quarrel” between ETH diehards and Solana diehards. It is completely different from the peaceful and joyful atmosphere of the Near, Avalanche, and Fantom communities. This may be the price Solana pays for choosing to take a different path from the ETH (EVM).

It may be a stretch to draw an analogy between Solana and iOS from the above dimensions. Some people are still criticizing the recent instability of the Solana network. But in the long run, through network upgrade, expansion of service nodes, and adjustment of incentive mechanism, these issues will become an episode in the development process of Solana.

In fact, Apple’s rise did not happen overnight but was accompanied by several important turning points that established Apple’s status as king.

For example, iPhone 4 was an epoch-making product that made breakthroughs in hardware, software, and design. It was the first cellphone that used the commercial retina screen, completed the dual evolution of cellphone camera hardware and algorithms, featured the most classic shape, and used iPhone self-developed chips…

In cosmology, the big bang, generated by a singularity, gave birth to the universe we are familiar with. The singularity is an important turning point in history. The birth of iPhone4 is a singularity in Apple’s development history, allowing Apple to embark on a rapid development path.

I try to list a few singularities to predict Solana’s vision of becoming the iOS in the encrypted world:

— — The number of C-end users exceeds 100 million. On November 7, 2021, the number of active users of Solana’s Phantom wallet amounted to 1 million. It seems like a big leap from 1 million to 100 million. However, the exponential effect of the growth of the encrypted world network will speed up the process considerably. Anatoly Yakovenko, a co-founder of Solana, held a more positive opinion. He has repeatedly stated that with the launch and operation of new technologies, Solana’s next goal is to “attract one billion users.” You know, the number of VISA users worldwide exceeded 3 billion as early as 2018.

— — Over 80% of the transactions are performed by institutional users. The participation of more institutional users in the encrypted market will attract more capital. The bull market in 2021 is driven by institutions. Many institutions, such as Tesla, Microstrategy, Grayscale, and the ARK founded by Catherine Wood, have entered the encrypted market one after another. SBF deems that the crypto sector driven primarily by potential institutional investment is likely to grow in the next five years. In my opinion, according to the Pareto principle (80/20 rule), if institutional users become the main force of the Solana market, and if their trading volume accounts for more than 80% of the total volume, Solana will usher in a new round of development.

— — Over a third of Ethereum projects migrate to Solana. In June of this year, Neon Labs, a cross-chain bridge between Ethereum and Solana, was released. Neon allows anyone to run Ether smart contracts on the Solana blockchain, making it easier for developers to build programs that work on both blockchains. It would be an exciting time if more than one-third of the projects that have been deployed and developed on Ethereum are simultaneously building applications on Solana.

— — Solana’s total market capitalization reaches 50% of Ethereum’s. SBF reckons that Solana’s unique underlying technology for developing the DeFi protocol will drive a spike in the price of its SOL tokens. He even believes that Solana can surpass Ether as the largest decentralized financial platform. Ethereum’s current market value (about $470 billion) is still nearly eight times that of Solana (about $55 billion). If Solana reaches 50% of Ethereum’s market value, it will be an important milestone in the development of Solana.

The singularities of Solana ecological development (forecast)

Will Solana become the iOS in the encrypted world? Probably nothing.

I very much agree with Kyle Samani, managing partner of Multicoin Capital, “I think we’re going to see two things [Solana and Ethereum] coexist. We have iOS, we have Android. And, today, everyone knows you have to build an iPhone app and an Android app.”

Perhaps, in the near future, Solana and Ethereum may become encrypted world’s iOS and Android, respectively. Fortunately, we are all witnesses and participators of this great change.

Note: This paper is a CGV FOF Research Report and does not constitute any investment suggestions. It is for reference only.

About CGV FOF: the Master fund from Asia, composed of family funds such as Japan, Korea, Chinese mainland and Taiwan, and focuses on investing in Crypto Fund and Crypto Studio. CGV FOF is headquartered in Japan and has branches in Singapore and Canada.

References

1. 《Solana Summer》，Not Boring by Packy McCormick, 2021Solana Summer, Not Boring by Packy McCormick, 2021

2. 《An Introduction to Solana》，Grayscale, 2021An Introduction to Solana, Grayscale, 2021

3. 《Why Solana is the ’World Computer’ Blockchain Developers Need》, Andrew Hyde, 2019Why Solana is the “World Computer” Blockchain Developers Need, Andrew Hyde, 2019

4. 《一文读懂以太坊杀手Solana》，OKEx Research, 2020Understanding the Ethereum Killer Solana by Reading This Article, OKEx Research, 2020

5. 《Digital Assets: Beauty Is Not in the Eye of the Beholder》, Goldman, 2021Digital Assets: Beauty Is Not in the Eye of the Beholder, Goldman, 2021

Before the rise of blockchain, Web3.0 can only stay in the concept stage due to the lack of solutions. With the development of blockchain technology, a number of Web3.0 related projects have emerged.

According to the Web3 Index compiled by web3index.org (a website that tracks protocol usage across the entire Web3 stack), in the past 30 days, the revenue and other comprehensive indexes of Pocket Network, Arweave, and Livepeer ranked among the top relative to other projects. Pocket Network is currently the Number 1 middleware, with its 30-day revenue more than 30 times that of Arweave. In November, the fees paid by developers increased by 208%.

In the Web1.0 era, the transmission of information was one-way, without interaction on the user’s side. Web2.0 gave users the right to edit, use, and interact with information. However, privacy protection remained an issue, and the value of user participation wasn’t explored. Web3.0 broke large intermediary platforms’ monopoly that had resulted from Web2.0, transforming the platform-centered value distribution mode into one that allows each participant who creates value for the platform to have a share of the profit.

Web3.0 cannot be built in the air. Before Web3.0 applications can be adopted on a large scale, the blockchain infrastructure must be improved. In this article, CryptogramVenture FoF (hereafter CGF FoF) focuses on three blockchain projects, namely, Pocket Network, Arweave, and Livepeer, and introduces the important infrastructural components of Web3.0 from three aspects: API, storage, and streaming media.

Note: This article is a CGV FoF research paper and is for reference only. It does not constitute any investment proposal.

Pocket Network

1. Basic Introduction

Pocket is a distributed API infrastructural project built for Web3 applications. It provides a trustless API protocol that is available for all major blockchain networks.

Pocket project aims to build a complete distributed network of blockchain nodes. Through the trustless API protocol, developers can seamlessly access thousands of nodes, building a DAO ecosystem in combination with cryptoeconomic incentives.

2. Pain Points Solved

On November 11, 2020, Ethereum suffered an outage that lasted nearly four and a half hours. Infura, the API service provider of Ethereum and IPFS, said that its Ethereum Mainnet API service was temporarily interrupted, which resulted in this outage incidents. This is also one of the many Single Points of Failure (SPFs) perplexing centralized service providers.

CGV FoF has learnt that this incident did not affect users who added Pocket RPC’s Ethereum nodes to their wallets. They could still trade and interact through DApps or smart contracts. This was possible mainly due to the fact that the Pocket Network node operator has a variety of Ethereum clients, which makes the network service more flexible.

Michael O’Rourke, CEO and co-founder of Pocket Network, believes that centralized infrastructure providers must have a large number of available buffers to meet additional needs. Due to the decentralized design of Pocket Network, it only needs to start and run a small part of the backup buffer, thus reducing the service cost. According to the company’s estimates, the Pocket Network services are “at least 10 times cheaper” than centralized services.

3. Token-based Economic Model

Pocket Network has designed a unique economic model based on its token POKT. The model, which is based on DAO, creates a decentralized and trustless bilateral market between nodes and developers in its ecology, which enables all participants to benefit from it. In the Pocket ecology, developers and nodes are the rigid demanders of POKT.

Developer: Uses POKT tokens to implement API requests, thus obtaining more efficient but less expensive distributed API request services.

Node: Possesses a certain amount of POKT tokens to provide node services, and is awarded with POKT tokens for providing API services and implementing developers’ API requests.

Because each party of the market has its own unique incentive mechanism, the bidding prices of both sides also vary. The total supply will be limited by the burning mechanism established by DAO that controls the token policy. The ultimate total supply of POKT will be determined by DAO.

How does POKT become a cheaper solution? The answer is to stake POKT instead of paying AWS bills. As the number of relays and nodes increases, data will become cheaper. It is expected that the price of each relay will eventually stabilize at a certain order of magnitude in the next few years.

Although the network is still in its infancy, the number of nodes keeps increasing at a significant rate.

This new form of payment by staking may become a source of potential friction in the process of adoption. However, once POKT succeeds, we may have found an effective way to connect various Web3 middleware infrastructures with tokens.

4. Partners

Algorand has announced its initiative to enhance interoperability by integrating the decentralized API infrastructure Pocket Network, and is slated to develop cross-chain bridges.

Some cutting-edge blockchain projects have also participated in the pocket ecology, such as SOLANA, Matic, iCon, etc. Technical teams such as BlockSwap Network, Api3, Web3API, Fuse, and SKALE have also adopted POKT. see the figure above.

5. Team Members

Information publicly available shows that Pocket Network currently has more than 20 full-time professionals around the world. As the co-founder & CEO, Michael P O’Rourke took the lead in creating Pocket Network in April 2017. He also set up Nonce+1 Labs, a blockchain development company, and has served as CEO ever since.

The Pocket Network has a strong technical team. Core personnel includes senior blockchain engineers, APP engineers, full-stack software engineers, Big Data architects, cross-chain technology experts, financial technology talents, cryptography experts, etc. The consultant team has a balanced configuration, covering business, technology, operating, market and other fields.

Arweave

1. Basic Information

Arweave is a decentralized network focusing on permanent storage of data. It aims to build a data storage platform that features one-time payment, permanent storage, free reading, and tamper-proof.

Arweave is one of the preferred storage methods for NFT/Web3 projects. As a decentralized storage network based on Blockweave technology, it adopts the innovative Proof of Access consensus mechanism to adjust the amount of data stored by nodes, thus ensuring balanced data distribution.

2. Pain Points Solved

Web3.0 is committed to breaking the monopoly and control of data by centralized platforms. From this point of view, Web3.0 projects will not store data on centralized servers. Therefore, Web3.0 projects will have massive data storage requirements, rendering distributed storage an important infrastructure. Compared with the traditional centralized storage, distributed storage has the advantages of high security, privacy protection, and prevention of single points of failure.

Arweave has changed the data structure of traditional blockchains. Not every node needs to store all blocks, but each time a new block is recognized, it needs to verify a previous random block. This mechanism is called Blockweave. Combined with the Blockshadow mechanism that allows nodes to reconstruct a complete blockchain according to the blockshadow and their own transaction files, Arweave is able to speed up consensus and provide TPS.

3. Token-based Economic Model

Arweave’s token is called AR. The total number of 66 million AR tokens are mainly distributed as follows: 31.4% for financing, 13% for the team, 7.1% for strategic cooperation, 2.9% for consultant, 19.1% for ecological construction, and the remaining 26.5% is reserved. The part for ecological construction is mainly to reward storage suppliers and encourage storage suppliers to process orders, actively provide storage services for users, and effectively maintain network nodes. A total of 11 million block award tokens are available.

In the intrinsic incentive mechanism of Arweave, users mainly consume AR tokens to purchase storage services and store data, whereas storage suppliers obtain revenue by obtaining block rewards and providing storage services.

At present, the tokens obtained by providing storage services account for only a small part of the revenue of storage suppliers. Arweave has created a new consensus mechanism, Proof of Access (POA), which requires storage suppliers to verify historical blocks before getting rewards. The more blocks a storage supplier has saved, the more likely it is for the storage supplier to obtain block rewards.

Data source: https://viewblock.io/arweave

4. Partners

In the Arweave ecology, the most active tracks are finance, social networks, content distribution, verification, storage and archiving, DAO, and infrastructural tools. At present, the ecology is still in the early stage of construction. The following figure shows Arweave’s ecosystem.

5. Team and Investor

The Arweave team is composed of senior blockchain engineers. Dr. Sam Williams, founder & CEO of Arweave, is a decentralization enthusiast with rich experience in distributed system design and implementation. Sam Williams is an Englishman and currently has 15K followers on Twitter.

Investment institutions are very interested in the storage track. Arweave has raised funds from well-known investors, including top investment and financing institutions such as a16z, Multicoin Capital, Union Square Ventures, and Coinbase Ventures.

Livepeer

1. Basic Information

Livepeer (LPT) is a decentralized and highly scalable protocol at the streaming media layer. Content creators share real-time live videos and receive tokens (LPT) as rewards through video transcoding. Livepeer can function as real-time media layer in the Web3 stack.

Transcoding is the process of reformatting the original video file to ensure the best viewing experience. Anyone can participate in Livepeer andbecome an orchestrator by running software that allows them to contribute their computer resources (CPU, GPU, and bandwidth) in service of transcoding and distributing video for paying broadcasters and developers. Such orchestrators earn fees in the form of a cryptocurrency like ETH or a stablecoin pegged to the US dollar.

2. Pain Points Solved

Live video streaming consumes more than 80% of the Internet bandwidth. For start-ups and developers, using traditional video infrastructure to build a new live streaming platform means high costs. For streaming media applications, one of the most important cost contributors is video transcoding. Take Alicloud as an example, the average transcoding cost of an HD live video streaming is as high as US$6.2 per hour.

Livepeer’s open Web3 video infrastructure provides a creator economy platform for live streaming applications. The platform supports the advertising support mode of traditional technology platforms and promotes a more economically feasible ecosystem than those delivered by centralized live streaming service providers.

3. Token-based Economic Model

LPT is a native functional token of Livepeer. Users can contribute their computing resources to the network through a proprietary “transcoder”. Livepeer network will assign tasks to the user’s GPU. After transcoding is completed, users will be rewarded with LPT tokens.

At the same time, ordinary users can obtain income by staking their LPT tokens (thus becoming a delegator), and the staked tokens can vote for an orchestrator. At the beginning of each round of consensus, the network will select a group of orchestrators who get the most votes for task execution, and the orchestrators will get a corresponding number of new tokens. If an orchestrator is found guilty, the staked tokens voted for the orchestrator will be deducted.

Delegators who vote their tokens to an orchestrator can get a part of the earning from the orchestrator as commission. Therefore, the delegator needs to find a reliable orchestrator to vote in order to avoid penalties, and the orchestrator also needs to establish a good reputation to ensure the support of the delegator in the future.

According to the data CGV FoF finds on Livepeer’s official website, the total number of active nodes has exceeded 100, the total fees earned are around US$322,000, and the total minutes of transcoded video are 8..4 million. The capacity on Livepeer’s network represents access to 70,000+ GPUs, or enough to encode all the realtime video streaming through Twitch, Facebook, and Youtube combined.

4. Team Members

Livepeer lists 22 team members on the official website. As a project that made its “debut” in 2017, its main team members have rich experience in blockchain and successful entrepreneurship, as well as strong technical background. CEO Doug Petkanics graduated from the University of Pennsylvania with a bachelor’s degree in CS, and CTO Eric Tang graduated from Carnegie Mellon University with a bachelor’s degree in CS. The two co-founded the Wildcard mobile publishing platform.

In terms of financing, the project has prominent performance and has been invested by many well-known investment institutions. At present, Grayscale Investment Trust, Coinbase Ventures, PanteraCapital, Digital Currency Group, CoinFund, Animal Ventures and other institutions have invested in Livepeer.

Summary

Web3.0 has been established as the next direction of human innovation. Now we are standing at the forefront of Web 3.0, feeling the impact of the digital world and the physical world.

Pocket Network has entered a huge and extremely dynamic emerging market. It has become an indispensable solution for Web3.0 infrastructure by providing trustless API protocol and relay network infrastructure. If it succeeds, the costs of building applications will be greatly reduced.

Storage has always been the key investment field of all parties, and the importance of decentralized storage will become more and more prominent. With the increasing importance attached to data security and user data ownership, the future performance of data storage networks such as Arweave in the vast and promising terrain of 3.0 is worth looking forward to.

If the video infrastructure solution provided by Livepeer is comparable to the centralized alternative in terms of quality and costs less, it will promote the development of the ecosystem, which is more economically feasible than the centralized live streaming services.

With the development and maturity of Web3 market, decentralized infrastructure will continue to grow and become more valuable, which will fundamentally change the relationship and interaction mode between users and the Internet.

Note: This article is a CGV FoF research paper and is for reference only. It does not constitute any investment proposal.

About CGV FoF:CGV FoF is an Asia-based Fund of Funds (FoF) that focuses on investments in Crypto Fund and Crypto Studio. CGV FoF is composed of family funds from Japan, Korea, and China’s mainland and Taiwan, with headquarters in Japan and branches in Singapore and Canada.

Reference

*1. https://POKT.network/wp-content/uploads/2020/03/POCKET-NETWORK-WHITEPAPER-V0.3.0.pdf

*2. https://www.POKT.network/pocket-dao-what-to-expect/

*3. https://www.POKT.network/making-metamask-highly-redundant-by-relaying-through-pockets-decentralized-ethereum-api/

*4. https://www.POKT.network/governance/

*5. https://insights.deribit.com/market-research/infrastructure-lego-the-middleware-thesis/

*6. https://cointelegraphcn.com/news/pocket-network

*7. https://www.arweave.org/technology#papers

*8. https://www.theblockresearch.com/mapping-out-arweaves-ecosystem-118779

*9. What Is Web 3.0 & Why It Matters (2020), Fabric Venture, https://medium.com/fabric-ventures/what-is-web-3-0-why-it-matters-934eb07f3d2b

*10. https://arweave.medium.com/profit-sharing-tokens-a-new-incentivization-mechanism-for-an-open-web-1f2532411d6e

*11. https://coinmarketcap.com/alexandria/article/profit-sharing-communities-a-deep-dive-by-arweave

*12. https://github.com/livepeer/wiki/blob/master/WHITEPAPER.md#livepeer-token

*13. https://medium.com/livepeer-blog/the-livepeer-roadmap-2021-and-beyond-5281776e9b3d