Firstly, we want to thank 

A&T Capital

 , one of our investors who organized this campaign and other speakers’s wonderful speech.

So let’s dive into this chat 🏃‍♀️

Brief intro

During the NFT bull market in 2021, we found the liquidity of NFT was insufficient, so we thought of NFT mortgage & lending. We conceived it from March to April last year, and started to build the product in May. The main problem at the beginning of the startup was to convince investment institutions to have confidence in NFT. Our investors, such as A&T, were able to see forward-looking opportunities for NFT and NFT mortgage & lending, and subsequent developments also proved that the market consensus on NFT was faster than expected.

However, there are still many users who cannot understand NFT lending, so we spend a lot of time on popularizing users. We completed more than 2.7w loans on BSC in the early stage, with an amount of more than 20 million US dollars. At present, we realize that Ethereum is the real center of NFT demand, so we are also deploying Ethereum as the start of our multi-chain strategy.

Q&A 📝

1. What is NFT financialization? What potential product needs will there be?

XCarnival (Leo): There are two types of NFTs, avatars that have become popular and financial NFTs that are developing. With the expansion of the NFT market, a large number of assets will be locked in NFTs, similar to appear BTC and ETH before lending; mortgage & lending will help users who hold assets to increase leverage and improve capital efficiency;

Fragmentation is also a direction. At present, the prospects are not very clear. As well as game props NFT mortgage & lending, financial NFT, and the NFT financialization track has not yet exerted force, but the future space is huge.

Master Cui : In analogy to DEFI, NFT financialization is a natural occurrence, and there are three cornerstones: exchanges, mortgage lending, and synthetic assets. Synthetic assets are currently fragmented, and there may be index funds, derivatives, etc. later. Borrowing is the best way to release liquidity, and releasing liquidity is just needed.

LooksRare Mod (0XQ): I think the problem with NFTs is the liquidity is too poor. DEFI combined with oracles, clearing and other functions can bring good liquidity to the market, but NFTs are still very poor except for top blue chips. , if you want to sell, you can only choose the floor price/offer price, so solving the liquidity problem is needed!

XCarnival (Uncle.Kai): The liquidity capability brought by NFT mortgage &lending can be compared to the development of the real estate market. How to better release the liquidity of assets (NFT) is the focus of the market: 1.0 is p2p lending, which is more efficient Low, 2.0 is pool2c’s lending, which will greatly enhance liquidity.

NFT Marketplace Overview

2. What are the advantages and disadvantages of the current solutions to NFT liquidity?

XCarnival (leo): For the mortgage & lending sector, we classify NFT holders as traders or holders. Traders only need to grasp market sentiment and use tools to trade; holders will need mortgage loans to provide liquidity.

**Robin:**The main problems are: 1).The clearing time is too long; 2).Auction liquidation liquidity is very poor; 3).The risk of oracle attack is too high I think that the liquidation should first be handed over to platforms such as opensea instead of other platform, but the problem of liquidation on @opensea is quite big. In addition, the use experience of NFT mortgage loan and pooling will be very poor, but the risk of pooling is also a question.

So another core issue is NFT pricing. I think it is possible to consider building an application layer based on @opensea. Buying NFT as a homogeneous token can better improve liquidity; a big problem at present is the NFT project party. There is no way to do liquidity, so we consider making a one-click make offer tool, or you can do some market value management and other tools on the basis of trading tools.

A&T Capital (Sukie): Here I would like to share two better solutions for NFT instant transactions currently in the market.

The first is verse, which realizes the conversion of NFT and Token by programming inside NFT and building a bridge between ERC20 and ERC721, and provides built-in liquidity through AMM by embedding swap internally to achieve instant transactions. However, it is not applied to NFTs with large individual differences in the avatar category, but to some projects that are more homogeneous and similar to social NFTs.

The second is some service providers that call the major NFT market data api integration and data processing at high speed (once every 10 seconds). Other protocols integrate these api data providers so that users can use wallets or exchanges in a short period of time. Users could sold with the highest offer in the market.

Robin: I think the first solution is similar to integrating the content of NFTX into the distribution, but many projects do not have the ability to manage market value from the beginning; the second solution may bring some new gameplay.

XCarnival (Uncle.Kai): In fact, it is a question of value determination. I think this direction can be viewed from three perspectives:

The first is to strengthen the pricing of oracle machines, which may introduce some centralized attributes such as community popularity.

The second is that some liquidity problems can be solved by staging.

The third is that a combination of liquidation and DAO valuation will be a better solution.

XCarnival (Uncle.Kai): This is actually what we call the pool2c model. The pool will support the whitelist proposed by us, and the lending rate will also be a floating interest rate; DAO may be a model suitable for NFT liquidation, and we consider developing a machine dedicated to clearing.

A pleasure to have this chat. We’ll continue with more campaign!

About XCarnival

XCarnival is a lending aggregator that provides easy-to-use financial products. Users can put their NFTs on XBroker as a pledge to borrow money from other lenders. Additionally, users can simultaneously borrow money from Megabox with their altcoins, such as Pancake, Dodo, and many more. XCarnival believes that “everything is collateral”, and works towards unlocking more liquidity for the metaverse space through its innovative practices.

To learn more about XCarnival, visit xcarnival.fi,follow @XCarnival_Lab on Twitter. To understand the full vision of the XCarnival, read the XCarnival litepaper.

On April 13, 2022, 7 O’Clock Labs held the “New era of public blockchain” Twitter Space event, hosted by 7 O’Clock Capital partner Kevin, with guests from various public chains, namely Wilson, the head of AVALANCHE Asia, Dafeng Guo, member of the board of directors of EOS Network Fund, Herbert, head of DFINITY Asia, OASIS China Technology Consultant Vic, and WAVES China head Steve. The discussion lasted for a heated two and a half hours and was a success.

Q1：As we all know, the development of blockchain in the past two years has been in full swing, from DeFi, NFT, to the Metaverse and Web 3. Since public chains are the foundations of blockchain, where do you see technological breakthroughs and opportunities?

Wilson, head of AVALANCHE Asia: The difficulties surrounding public chains have always been inseparable from scalability, speed, security, convenience, and such. For Avalanche, the original Avalanche consensus mechanism has laid a basic characteristic improvement, where DAG replaces linearity to establish low latency, high speed and large scale. Right now, there are more than 1,400 nodes currently running as a guarantee in terms of security. In terms of scalability and interoperability, public chains like Ethereum are all currently facing these problems, and they will be the focus for a long time in the future. Our own subnets provide a breakthrough idea where they are relatively independent but collaborative at the same time, ensuring maximum customization while ensuring security.

Dafeng, member of the board of directors of the EOS Network Fund: In the construction process of Web 3, if you want to support hundreds of millions of users and achieve a user experience like the Web 2 era, the performance optimization of the public chain becomes very important. The EOS network has been running for 4 years, and high TPS and stability had ensured the smooth operation of dApps. In addition, it is also extremely important to onboard more Web 2 developers, therefore efforts should be made to lower the development threshold of blockchain. EOS is currently expediting its EVM compatibility, which is the best way to get these developers on board. As far as I know, the EOS EVM will be launched soon.

Herbert, head of DFINITY Asia: The rise of Web 3 in Q3 2021 shook the entire industry, and in order to create a true Web 3 dApp, a trinity of smart contracts, network front-end and decentralized storage/computing is required. DFINITY started deploying these things in 2016.

Steve, head of WAVES China: At present, the professionalism of the blockchain industry is gradually increasing, the competition is becoming more intense, and the segments are getting gradually subdivided. In such an environment, public chain needs to do two things: be EVM compatible, better integrate the Ethereum ecology and its own ecology, and through continuous iteration, continuously improve the underling function to attract more outstanding developers to develop together.

Q2: All the guests have talked about the directions that public chains should strive to develop towards. Now with that direction, what challenges will be encountered in the process?

Wilson: If each blockchain is regarded as a city, there are still too few paths between cities. Some cities have only the most basic roads, some cities have reached a bottleneck in terms of capacity, and some are still raising capital — these are the biggest problem at present. The world we hope to create should be sufficiently interoperable and assets can be freely exchanged. Whether it is enhancing the circulation of resources or expanding to include more users, these are still problems that public chains need to solve.

Dafeng: How to attract more developers and how to establish incentive policies for these developers to build projects for ecological construction is a very big challenge for the development of the public chain. I personally think that the better solution is to attract more Web 2 developers into the construction of Web 3, and the EOS Network Foundation is currently following this idea. On the one hand, it helps developers to build teams and start projects through the ecological start-up fund; there is also special fund support that can be obtained when projects meet the standards. On the other hand, what I want to emphasize is to lower the threshold for developers. EOS is built using WebAssembly, and the EVM compatibility of EOS is to put the entire EVM into WebAssembly to operate, so that we can be compatible with more developer languages, so that they don’t have to start from scratch when building.

Herbert: At present, the challenges of public chain development are as follows:

First, to integrate with real economy. ICP is still early stage in this aspect, but more and more projects have begun to use ICP’s stack technology for traditional enterprises. The second is to attract more traditional web developers to join. ICP offers many courses for non-crypto native developers, and they can easily learn and transfer to Web 3 through our SDK. The third is to obtain more users from Web 2. Identity authentication will no longer requires users to use public-private key pairs for authentication but uses biometric technology from mobile devices, and this will lower the threshold for traditional network users to adopt Web3. The fourth is to further decentralize and reduce dependence on centralized platforms. DFINITY is working closely with the community to continuously decentralize. Decentralization and mass adoption are two sustainable competitive advantages in the long run.

Vic: I think the challenge is divided into two parts. The first is how we can attract developers to make more phenomenal products in the ecological environment. The development of the public chain relies on applications to attract users, where application innovation, high APY, and GameFi that allow users to earn profits are the key to attracting users. The second is the security issue of projects built on the public chain. A major accident will cause a devastating blow to the users, funds and reputation of the public chain. If the public chain does not seize the right opportunities, or does not choose a good path to follow, they could face negative accidents that affect the entire ecology.

Steve: At present, a good deal of the world does not have the basic understanding of blockchains. If you want to make the blockchain as widely used as the mobile Internet, the big challenge lies in education and driving the next generation of technology to become mainstream. This requires industry predecessors, leaders and ecological contributors to invest a lot of time and energy to continuously update and iterate on the bottom layer of the public chain and projects.

Q3: Undoubtedly, the development of public chains still has a long way to go. Meanwhile, the Metaverse is continuing to develop as well. So how do public chains empower the Metaverse? Or is it possible that the non-blockchain-native concept of the Metaverse might change the public chain landscape?

Wilson: In fact, the real Metaverse should be AR, VR and Bulider, a collection of different networks. Simply saying that a project is a Metaverse is very limiting. The concept of the Metaverse is huge, so huge that no blockchain can carry it, and it cannot be formed even if we add everything all up. What is certain, however, is that the immutability of the blockchain is naturally compatible with the Metaverse. It is unknown whether the Metaverse can change the pattern of the public chain, but it does provide a direction for the development of the public chain. Avalanche hopes to form huge L1 aggregators through subnetworks, and if it grows large enough, it should bring us the prototype of the Metaverse.

Dafeng: Many public chains have the infrastructure required for the development of the Metaverse, so the topic I want to discuss is whether the Metaverse can change the current development pattern of public chains. I think it depends on whether the public chains can find killer applications and precipitate the users who enter the game. Just like when many people thought Yahoo was the Internet, for new entrants, the emergence of a killer application may be the metaverse in their eyes, and the in-depth development of this killer application is very likely to have the power to subvert the public chain structure.

Herbert: Public chains need to empower the Metaverse. In this regard, DFINITY has hired executives from Unity Technologies to lead the development of Web 3 gaming. Gaming + DeFi will be the two most noteworthy vertical industries in the ICP ecosystem in 2022.

Vic: In fact, every public chain a part of the Metaverse. I think the real underlying infrastructure of the Metaverse is actually based on NFTs. The Metaverse projects we have seen at this stage are actually all based on NFTs, and not every game itself is on-chain, it is the NFTs that directly trade with each other, and characters and props are also displayed in the form of NFTs. In the future stage, each NFT actually needs to achieve cross-chain interoperability and cross-chain flow, so the native cross-chain bridge or cross-chain protocol based on that particular chain will play a role in changing the entire Metaverse infrastructure in the future. Just like the cross-chain protocol of Layer Zero we have seen recently, it can realize the cross-chain transfer of both NFT and assets to gradually build the ecology of the entire Metaverse.

Steve: Public chains can empower the Metaverse from two aspects: on the one hand, it undertakes the circulation and recording of assets in the Metaverse; on the other hand, it undertakes the storage of partial data on the chain. This has relatively high requirements for the underlying public chain in terms of high concurrency, performance, storage, NFT rules, and cross-chain capabilities.

Q4: It can be seen that the development of the blockchain is complementary to each other. As the leader of public chains, ETH 2.0 is about to be introduced. For other public chains, is this an opportunity or a challenge?

Wilson: First of all, the goal of Ethereum 2.0 is still to become a smart contract platform. After implementation, it will surely become better in terms of security, continuity, and expansion. The purpose of Avalanche is to become the center or L0 of blockchain, helping various types of projects to build their own blockchains and interact with each other with ease. For the public chain, Ethereum undoubtedly has strong innovation and point of reference, but we are not completely competing on the same vertical market. Whether it is the introduction of ETH 2.0 or the future development of Avalanche, we all hope to bring new changes to the blockchain world.

Dafeng: ETH 2.0 will definitely be implemented successfully, but the process may be chaotic. Because it involves a large-scale migration of the underlying consensus algorithm that we have not experienced it in the past, and the whole process involves a lot of stakeholders, and power plays between interested parties can lead to confusion and uncertainty. However, the multi-chain pattern will be the norm in the future, therefore, each public chain should find its own position. For EOS, high TPS will still be the focus in the future. In addition, I think there may be a relatively large development in the cross-chain bridge market in the future. However, it will not become a monopoly, and users can choose according to their own needs, desired efficiency, and desired cost.

Herbert: The introduction of ETH 2.0 is an opportunity for ICP. PoW is currently inefficient, and fragmentation is inevitable. This is actually the mix of PoS and subnets on ICP. As the direct ETH-ICP integration progresses, smart contracts on ETH and ICP will interact and enable true Web 3-style interoperability — something bridges can’t do. ICP is not compatible with EVM, it is a general application blockchain, and not just used for DeFi/NFT. Whether Ethereum can be successfully upgraded to 2.0 does not affect the pace of Internet computers. ETH 2.0 will threaten some L1s that are currently beating ETH 1.0 on some performance metrics. Ethereum’s flaws gave them room to grow, but when ETH moves to 2.0, these L1s will need to work harder to defend their value.

Vic: The upgrade of ETH 2.0 is definitely a very big challenge for every public chain, but the current development and competition of public chains is not about the underlying facilities and basic infrastructure, but whether the public chain can find excellent developers, or for developers, whether developing on this public chain is simple enough, comfortable, low-cost, and highly incentivized to stimulate the development of innovative applications. Therefore, I think that the implementation of ETH 2.0 can only be said to have a relatively large improvement in TPS and performance, but if we can better upgrade the development experience of developers in our own ecology and find more excellent and suitable projects, it may be a good opportunity for developers to challenge ETH.

Steve: ETH 2.0 is both an opportunity and a challenge. During the launch of ETH 2.0, how public chains interact with Ethereum and the relationship between the public chain and Ethereum becomes particularly important.

After two and a half hours of heated discussions, all guests expressed their understanding and views on the current development and challenges of the public chain market, how to carry out new visions, and how to combine the trends and new emergences of the blockchain industry. We also gained a clearer understanding of the current state of public chains, their development priorities and advantages.

Public chains are extremely important in the development of the blockchain industry. 7 O’Clock Labs will continue to pay attention to their development and work closely with our partners to contribute to the healthy growth of the industry.