AUTHOR: JAY

Compilation: Deep Tide TechFlow

So, what's next for Ethereum? In this article, I talked about modular blockchains, database design, and quoted GCR to try to answer this question.

The argument for the innovator's dilemma can be summed up as follows: "Successful companies are often unable to adapt to paradigm shifts, especially when it comes to technological innovation. The reason for this is that they are overly focused on making their product a success, rather than trying to update and ideas that they are not familiar with."

In the world of Blockchain and smart contracts, we have made considerable progress over the past few years. Now, a million-dollar or $250 billion question is: What is the fate of Ethereum next?

Through this article, I will argue that Ethereum has peaked in 1) relative to the valuation of all encryption assets (ETH.D); and 2) relative usage and adoption. I'll start by exploring the concept of modular blockchain, comparing it to traditional database design principles, and then tie it all back to Ethereum and its future.

Modular blockchain

There is now a more principled way of thinking about what a well-functioning Blockchain is, and a reasonable way to decouple (and scale) the core components. This is the battle between monomers and modules.

The core idea behind Blockchain modularity is that there are four basic functions:

Perform. Determine the "after" status of the transaction. If I send Tokens to a specific Wallet, the execution layer will determine the relevant balance before and after the transaction.

Settlement. Determine if the submitted transaction is "legitimate". After sending the Token, the balance is xyz - Settlement determines if xyz is correct.

Consensus. Determine the final state after a bundle of transactions. This layer determines 1) the correct order for a given series of transactions, and 2) the final state after those transactions are processed.

Data availability. In order for any of the above three features to exist, there needs to be a prior state and an end state. The function of the DA is to provide state to the execution layer and update the state based on the end result of the Consensus.

As with any engineering problem, a "perfect" Blockchain only makes sense if well-defined use cases exist. The existence of this framework allows for more specialized Blockchain design, and Blockchain built for high-throughput games has very different needs than Blockchain that aims to become a global Decentralization Ledger. This frame of thought reminds me very much of the principles of database design, especially the debate around SQL versus noSQL.

Database design

Databases have been around for decades longer than Blockchain. Consensus on its design is that there is no such thing as a perfect database. Like longest engineering problems, everything needs to be weighed.

The framework for building scalable databases goes back to "What is the use case?" Before making a decision, I ask a few questions:

• What is the approximate ratio of read-to-write long less? On apps like Telegram or Slack, the read and write volumes are similar, while on Twitter, the read volume is orders of magnitude higher than the write volume.
• In a distributed system, there is a concept of consistency and availability. In other words, this can be rephrased as: Are we more concerned about inaccurate data or application downtime? Again, it depends on the situation. For fintech applications, consistency (accurate data) is long important.
• long old data is important vs. fresh data? How does this relate to read and write load? Does our database allow us to enforce a strategy to handle concurrent writes and reads? For example, my wife withdraws cash from my bank when I swipe my debit card, how can I prevent the classic Double Spending problem?
• What is the read mode? Do you need flexible access to your data, or do you often define data up front? Did you perform longest joins in different datasets?

In addition to technical considerations, it's important to understand the following:

• How many engineers long proficient in this technology? Longest engineers really want to build with this technology?
• If we want to fork the underlying code and make adjustments, is there a way to get positive support?

The future of Ethereum

Now to tie it all together in its entirety - there is no such thing as a perfect Blockchain. Good engineering is about trade-offs, and there is no one-size-fits-all approach. So, how did Ethereum become such a "dominant" platform? Why is Ethereum priced as if it were the perfect Blockchain? Finally, what's next for Ethereum?

**How did Ethereum become such a "dominant" platform? **

Four years ago, Ethereum was the first choice for building smart contracts platforms. Compared to every other platform, it has excellent development tools like Hardhat, CryptoZombies, etc. In addition, it has a loyal user base, and the chain and tokens are "Decentralization". At that time, centralized Blockchain was more likely to be a scam. ETH is also cheaper as an asset, which means lower gas fees.

Today, developers have more long smart contracts platforms to choose from, each with unique trade-offs. While scams still exist, they have decreased significantly compared to four years ago with more long talent and capital entering the space.

The reason for Ethereum's past success is also the reason why it will fail in the future. There was a time when Ethereum was the only viable smart contracts platform for developers. Legitimate use cases (Decentralized Finance, NFTs) provide ETH with a huge head start. But at this stage, the focus shifted to value accumulation (super-stable coins) and competing with Bitcoin as the internet's native default store of value (flipping).

The desire to become both a smart contracts platform and a decentralization "super stable coin" adds significant friction (higher gas costs, congested networks) to marginal users and developers. AS CONFUCIUS (AND GCR) SAID: THE MAN WHO CHASES TWO XTZ CATCHES NOTHING

**What's next for Ethereum? **

Users will flow to where the app exists and the cost is reasonable, while app developers tend to be more cautious and long-term. Because their overhead is longest larger than the users themselves. Developers will build on platforms where their applications have the potential for long-term rise and expansion.

Now look at Ethereum, which has an average transaction speed of 15-20 TPS and gas fees typically soar to $200. There are very clear limits to the applications that can be built on Ethereum, and these applications require very little interaction. For example, borrowing protocol is a good app on Ethereum because I might interact with it a few times a year.

But if I'm an app developer and I'm going to build an app that intends to scale to 100,000 or 1 million users and has a higher usage pattern, it's not feasible to build such an app on Ethereum.

This is becoming more and more evident as viable alternatives come to the fore.

• FriendTech is built on Base L2
• Pacman and the Blur team are considering launching their own L2
• DYDX uses their own specific AppChain

The modular blockchain framework provides a set of trade-offs that Blockchain can choose from. We're now in a state where support for Blockchain infrastructure along the point of the trade-off curve is starting to emerge.

Last but not least, there are incentives.

As Charlie Munger has always said, "Show me incentives and I'll tell you the results." The incentive structure built on Ethereum is inferior among other existing Blockchains. Venture capital firms and new L1 teams are very interested in building a strong, thriving ecosystem. As an investor, I wonder why my team is still building on Ethereum when Tokens are so decentralized and the ecosystem is already so crowded? Why not promote app development on the Blockchain I have a stake, where L1 valuations are longer lower.

The reply in this tweet makes things very clear.

ETH is no longer at the effective forefront of Blockchain design. No matter where you want to be on the trade-off curve, there are better options for smart contracts platforms, as do incentive structures. Unless Ethereum undergoes fundamental changes in the way its community and organization operates, its relative advantage in valuation and usage has peaked.

Originally written by Matt Hougan, Chief Investment Officer, Bitwise

Original compilation: Luffy, Foresight News

Spot Bitcoin ETF has been a great success. Since their launch on January 11, they have attracted $11.7 billion, making them the most popular ETF of all time.

Now everyone wants to know: who's buying, exactly? Specifically, people want to know whether professional investors or retail investors are driving the flow of money.

This is an important question. The great promise of Bitcoin ETFs is that they can open the door for professional investors to buy Bitcoin in large quantities, thereby significantly increasing the pool of funds to invest in Bitcoin.

If it's a professional investor buying, that's certainly good. But if it's all retail investors, it's not so encouraging. Why? Because the scale behind it is not the same at all.

In the first few months after the ETF launched, there was no answer to this question. Investors buy ETFs through brokerage accounts, which means that fund companies like Bitwise won't know who is buying their funds. BUT ONCE A QUARTER, THE U.S. SEC REQUIRES INVESTORS WITH MORE THAN $100 MILLION IN ASSETS UNDER MANAGEMENT TO REPORT THEIR HOLDINGS OF PUBLICLY TRADED SECURITIES THROUGH SO-CALLED "13 F" filings.

Technically, these documents should be filed within 45 days of the end of the quarter, which means investors have until May 15 to file their reports. But k people have already submitted reports, so we now have a glimpse of the owners of these ETFs.

The data is very, very interesting, and here are the three most important points.

Point 1: long professional companies have Bitcoin ETF

To write this memo, I analyzed all 13 F filings for 11 publicly traded Spot Bitcoin ETF as of May 9. The big finding is that long professional investors have Bitcoin ETF.

These include some well-known asset managers, such as:

• Hightower Advisors: According to Barron's, the company is the second-largest RIA company in the United States, with $122 billion in assets under management. They own $68 million worth of Bitcoin ETFs.
• Bracebridge Capital: Boston-based Hedging fund that manages funds for Yale University and Princeton University, among others. They hold $434 million worth of Bitcoin ETFs.
• Cambridge Investment Research: A long-40-year-old company with more than $170 billion in assets under management. They own $40 million worth of Bitcoin ETFs.
• Sequoia Financial Advisors: Headquartered in Towson, Maryland, with a market capitalization of $17 billion. They own $12 million worth of Bitcoin ETFs.
• Integrated Advisors: A Dallas-based company with longest 12, 000 clients and $4 billion in assets under management. They own $11 million worth of Bitcoin ETFs.
• Brown Advisory: A $96 billion company headquartered in San Francisco. They own $4 million worth of Bitcoin ETFs.

As of last Thursday, a total of 563 professional investment firms reported holding $3.5 billion worth of Bitcoin ETFs. By the May 15 filing deadline, I estimate that we could end up with longest specialist firms and close to $5 billion in total Assets Under Management.

It's definitely a big deal. For any financial advisor, family office, or institution wondering if you're the only one considering investing in Bitcoin, the answer is obvious: you're not alone.

Point 2: Historical size of holdings held by professional investors

For a new ETF, this Holdings size is extraordinary. Large long ETF attracted very few 13 F filers in the first few months of the listing. Bloomberg ETF analyst Eric Balchunas said the number of large investors in Bitcoin ETFs is surprising.

The closest comparison I can find in history is the gold ETF launched in late 2004. At the time, the launch of a gold ETF was considered the most successful ETF ever, raising more than $1 billion within five days of listing. But at the time of the first filing of the 13F file, the gold ETF was only invested by 95 professional companies.

In terms of breadth of ownership, Bitcoin ETFs have been a historic success.

Point 3: Retail investors hold the majority of the outstanding shares of the Bitcoin ETF

While I think $30-5 billion and 563-700 companies have been a huge success, it's important to remember that Bitcoin ETFs have $50 billion in assets under management. Therefore, as a percentage of the total investment, professional investors own only 7-10% of all assets.

I suspect the media will catch on to this number, suggesting that these ETFs are "retail-driven" funds. In a way, their claims make sense: retail investors do invest a lot of money in Bitcoin ETFs, and that's a good thing. This means that they are able to access these investments on the same terms as the largest institutions in the world.

But I think this statement ignores a key pattern that we see in institutions in terms of Crypto Assets allocation.

Let me explain.

Why these 13 F files make me unusually optimistic

Bitwise has been helping professional investors acquire Crypto Assets for more than seven years. Today, we serve k companies, including RIAs, brokers, family offices, and institutions.

One thing I've learned from my seven years of practice is that most long investors follow a familiar pattern:

• Step 1: Due Diligence. Large long professional investors need 6-12 months to evaluate Crypto Assets. It is extremely rare for a client to allocate funds into the field immediately after the initial meeting.
• Step 2: Personal Configuration. We often see professionals making a small amount of personal configuration before configuring on behalf of their clients. They want to test investors before they bring them to market.
• Step 3: Configure independently for the customer. Next, these professionals typically make configurations on behalf of a small number of clients, usually those who actively ask them about Crypto Assets.
• Step 4: Platform-wide configuration. Beginning about six months after the initial allocation, Xu long began allocating across its entire client base, ranging from 1% to 5% of the portfolio.

Not all advisors fit this pattern, but that's what we usually see.

This tells us that the Bitcoin ETF configuration shown in the recent 13F file is only a preliminary attempt. For example, Hightower Advisors may allocate $68 million to Bitcoin ETFs today, which is great, but that's only 0.05% of its assets. If they follow the above pattern, this distribution will increase over time. Specifically, allocating 1% of their portfolio to Bitcoin would be equivalent to $1.2 billion, and these are just from one company.

Add to that the number of professional investors involved in the space rise continue to grow, and you can see why I'm so excited.

Link to original article

Source: Bloomberg

Compilation: Ning

KOL, for the encryption field, is undoubtedly a very special existence.

Because they often have a large following, under the influence of influence, they can often be used as a weapon to draw attention, but also a powerful object for being played for suckers. To use an inappropriate metaphor, KOLs can be both referees and athletes.

However, for encryption, an industry where sentiment and liquidity occupy an important position, KOLs who are closer to first-tier investors than institutions largely have more advantages than disadvantages, after all, the marginal cost of issuing coins is close to zero, but liquidity is priceless. Obviously, the project party also smelled this shareholder wind.

In recent months, there has been a lot of discussion about KOLs and VC, because KOLs tend to have shorter unlocking periods and lower valuation discounts, but compared to VC who not only have to invest a lot of real money but also share resources in sales, operations, and technology, it long seems that KOLs can only send a few tweets to end their obligations.

In this regard, some VCs complained, and even retail investors believe that KOLs are easier to obtain benefits in the Bull Market. But is that the case?

In the midst of various controversies, Bloomberg recently released an Depth Report on the KOL round, analyzing the advantages and challenges of KOLs, and the following is a full text compilation of Gyro Finance:

Back in March, the Crypto Assets market was booming, with Bitcoin continuing to hit record highs and billions of dollars flowing into Spot ETF. And among them, there is a special group of investors who cheer more than the other large longest investors.

At the time, the startup Monad Labs closed a new round of funding, valuing venture capitalists, including Paradigm, at $3 billion. Mona is already a very large fundraising project by Crypto Assets standards, but it has another distinctive feature — according to people familiar with the matter, some people known in the industry as "KOLs" are allowed to invest at just one-fifth of Paradigm's valuation.

These so-called "KOL rounds" are quite similar to the celebrity marketing cracked down by US regulators in recent years, and as digital assets rise from the bear market, "KOL rounds" have also sprung up like mushrooms and become a major spectacle in the encryption world. Investors who get preferential terms are more likely to be encryption authors or influencers than ordinary marketing targets for athletes or other celebrities than celebrity deals.

According to interviews with KOLs, entrepreneurs, and legal experts, KOLs typically receive longest favorable conditions such as valuation discounts and shorter lock-up periods in return for promoting Crypto Assets projects. In recent months, similar deals have become a source of controversy, with opponents focusing on inadequate information disclosure and potential risks to retail investors.

Several industry insiders with knowledge of such deals said that at least some start-ups did not require KOLs to disclose project affiliations when raising funds, which is a clear violation of US regulations.

Of course, there is no indication at this time that Monad Labs' financing violated any U.S. securities regulations. One investor said the company did not make any explicit requirements for KOLs, while CEO Keone Hon declined to comment on the lock-up terms and disclosure rules given to such investors.

San Francisco-based Paradigm, which runs one of the largest encryption venture capital funds, also declined to comment.

01, KOLs and Crypto Assets

Michael Selig, a partner at Willkie Farr & Gallagher LLP who specializes in securities law, replied in an email: "Including KOLs and influential industry influencers in a funding round, with the hope that these people will promote the Token of the project, could be scrutinized by U.S. SEC." ”

Part of the reason for the KOL round is the uniqueness of the Crypto Assets market. In encryption financing, digital asset startups typically provide equity to raise venture capital funds, while others raise capital through the sale of issuance Token or affiliated Token. The valuation of the project depends on the number and price of Tokens sold, similar to a stock sale, in which there are also hybrid funding rounds that mix Tokens and equity, such as the aforementioned Monad Labs.

Buying Tokens generally doesn't give investors the same protections as equity financing, but it does offer a clear advantage: investors can sell Tokens in as little as a few months, while equity investors are often tied up for years before liquidity events like IPOs occur.

In addition, the role that KOLs play in the Crypto Assets market is also very unique. Over the past long years, Crypto Assets has incubated a alts industry as celebrities, from celebrities to athletes to self-proclaimed experts, continue to promote projects online. In the ICO boom of 2017, having a large number of followers on Twitter may be a ticket to riches for authors, the specific operation is to get popular tokens at a discount in advance, and then sell them to get huge profits after the coin price rises.

02, the temptation of "making a lot of money".

It's important to note that to become an influencer investor, you don't necessarily need to have too long followers.

Simon Chadwick, co-founder of Crypto Assets platform Eclipse Fi, said: "Almost anyone, with some influence or community, can become a KOL. "For example, this could be someone who has 5,000 users on Twitter and writes a research report," he said. He was referring to the social media platform now known as X.

Eclipse Fi's main business is to assist projects in issuance Token on the Cosmos Blockchain. Chadwick mentioned that to make coin more convenient, the company has assembled a network of long 400 KOL investors that start-ups can take advantage of. "The potential for quick returns is so great that some KOLs try to set up longer accounts using fake social media accounts, which allows them to invest longer times in the same funding round."

Chadwick highlighted that KOLs who participate in this type of trading can receive a 20% to 50% discount, as well as a shorter unlocking period, in short, they can sell their tokens earlier than other investors.

The KOL round is indeed a blessing password. "Some KOLs have invested in hundreds of rounds and made a lot of long money." He said.

The U.S. SEC, as the regulator, has been cracking down on influencer marketing for Crypto Assets projects. In October 2022, Kim Kardashian agreed to pay $1.3 million to end regulators' allegations against her that she violated U.S. rules by promoting digital tokens by failing to disclose that she was an employee, although she did not comment on those allegations. Four years ago, the U.S. SEC fined Floyd Mayweather for failing to disclose similar Crypto Assets marketing plans.

Emily Meyers, general counsel and chief compliance officer at encryption venture capital fund Electric Capital, said she would caution projects against KOL funding in light of the SEC's prosecution of Kardashian, as well as similar cases last year, in which the SEC charged eight celebrities, including Lindsay Lohan, with being paid for undisclosed Token promotion.

The six accused celebrities, including Lohan, reached settlements without acknowledging or denying the SEC's charges.

At the moment, the SEC did not respond to Bloomberg's request for comment on the KOL round.

03. Pull up and sell?

Regardless of the regulatory implications, KOL rounds are undoubtedly controversial in the Crypto Assets space.

An encryption KOL who posts on X under the pseudonym CL and is a member of the early-stage investment group eGirl Capital admits that she has been receiving pitches from Crypto Assets projects lately to invest as a KOL. CL is not based in the United States, and she asked for anonymity due to the sensitive nature of the topic, which they have avoided because of potential reputational risks.

CL, which has nearly 200,000 followers on X, said the KOL deal surge was "an extension of the low-market capitalization Token Accumulation pull-up sell-off, but on a much larger scale."

Eclipse Fi's Chadwick said that in large deals backed by big VCs, KOLs are often willing to accept longer lock-up periods. But for this, they will ask for a higher discount rate in the transaction.

Orla Browne, head of corporate strategy at Dealroom, believes that because the details of KOL investments are often difficult to be transparent, the statistics of venture capital data do not separately list reports on KOL rounds.

In practice, they tend to take different forms, e.g. part of the deal outlines what the KOL should do in terms of promotion in the form of a written contract, while part of the deal is done through Telegram. Some of these are part of venture capital-backed financing, while others are more early-stage projects that are not yet mature enough to attract large wind investors. **

While the vast majority of long KOL deals are made up entirely of Token, there are also deals that combine equity with Digital Money warrants that have not yet been launched.

Bloomberg looked at a written contract for KOL financing, which stipulates that KOLs who invest at a discounted price must promote the project through podcasts and TikTok videos, among other things. protocol also mentioned that KOLs must disclose their affiliation with the project when promoting the project.

But longest projects don't choose to do that.

0xJeff said, "It's not a requirement. He is the operator of Steak Capital, a Crypto Assets consulting firm that lists KOL management as one of its services. It really depends on whether the KOL wants the community to know about their investment relationship and whether they are affiliated with the project or not. "OxJeff is similar to CL in that he asks to tweet anonymously and not use his real name.

04, uneasiness is spreading

Jed Breed, founder of Breed VC, said that large Crypto Assets projects usually don't have explicit requirements for KOL investors. Instead, the issuance's goal is to build a so-called "secret network" within the Crypto Assets KOL community. "I've never seen a venture capital deal go like this, where if you want to get this allocation, you need to do X, Y, Z and so on," Brad said. ”

Of course, there are also startups that are very hot and don't need to offer preferential terms to KOLs.

Humanity Protocol, which is building a Blockchain network that uses palm prints to verify identities, raised money from venture capital firms like Animoca Brands at a $1 billion valuation this month. KOLs poured in about $1.5 million in March, but their investment conditions were "the same as some venture capital firms" and the investment cap was only $25,000 each, Humanity founder Terence Kwok revealed.

Joshua Cheong, a product engineer at Parity Technologies who participated in Monad Labs' funding round as a KOL, said the company didn't ask him to advertise the project at the time of the investment. He declined to comment on the valuation and lock-up period.

According to OxJeff, KOLs in the U.S. are more cautious about SEC scrutiny, so they often choose to disclose their relationship with the project party when promoting a project or token. **

OxJeff believes that no matter where the KOL is located, the unease has begun to creep in across the community. This is in large part because "on-chain detective" ZachXBT, a Twitter user with nearly 600,000 X followers, has begun to publicly baash and expose KOL deals.

"I'd be lying if I said KOLs don't worry, and all KOLs are panicking at the moment," OxJeff said. Especially at present, there are countless KOL rounds long, and in long, they are not going well. ”

Grand Cayman, Cayman Islands, May 16th, 2024, Chainwire

With the launch of Netki’s DeFi Sentinel on Sui, protocol developers can opt to screen transactions before finalization on the blockchain, easing a significant compliance burden

Today, Netki, a digital identity verification leader, announced the launch of their pioneering compliance oracle – DeFi Sentinel – on Sui, the Layer 1 blockchain and smart contract platform. The integration introduces an essential tool for developers that automates compliance within their protocols, allowing them to focus on shipping high-impact projects instead of spending time developing tools to meet complex, ever-changing regulations that often differ across jurisdictions.

Institutions are eager to engage with DeFi protocols and technology but need to ensure that all of their trades, and trading partners, meet their compliance standards. Until now, these institutional players have been forced to either trade in manually managed pools with limited liquidity and trading volume, or to avoid DeFi altogether. With DeFi Sentinel on Sui, developers can meet institutional as well as regulator requirements via a one-time integration.

DeFi Sentinel leverages Netki’s advanced technology to provide real-time KYC/AML, wallet screening, financial transaction monitoring, securities compliance, and tax compliance, all now integrated directly within the DeFi protocols on Sui that choose to implement the tool. The solution combines on-chain and off-chain data to ensure each transaction adheres to institutional risk, as well as regulatory standards.

Sui will also integrate Netki’s OnboardID, which, for protocols that enable it, enhances user onboarding and identity verification processes, reducing costs and simplifying compliance around the onramping process for Sui developers’ applications. Netki’s integration represents a significant advancement in making decentralized financial s safer and more accessible globally.

“DeFi protocols are poised to transform financial services by enhancing accessibility and transparency, but many of the best ideas fail to get off the ground due to compliance concerns,” said Evan Cheng, CEO of Mysten Labs, the original contributor to Sui. “Netki’s integration not only fortifies the security and compliance of transactions on Sui but also assures institutional and individual participants of their adherence to evolving regulatory requirements, and most importantly, gives developers the peace of mind to build with confidence.”

Netki’s DeFi compliance oracle is unique in the industry, enabling transaction-by-transaction compliance, which is crucial for institutional adoption of DeFi tools. With features like real-time name and wallet screening, the solution ensures that compliance and risk management are seamlessly integrated into the transaction flow without compromising the user experience or developer agility.

“By integrating DeFi Sentinel with Sui’s robust and scalable blockchain infrastructure, we are setting a new standard for safety and compliance in the DeFi space,” said Justin Newton, CEO of Netki. “We aim to enable the safe and widespread adoption of DeFi technologies, ensuring that developers can focus on innovation while evolving and expanding compliance requirements are effortlessly met.”

Contact

Sui Foundation
[email protected]

Words: Haotian

What do you think about @BuildOnCyber protocol upgrading to a layer2 public chain focusing on social networking - Cyber? After completing a series of staking and restaking community incentive activities, CyberConnect's new social public chain built based on the OP Stack was officially launched. What are the potential impacts of the new Cyber chain? Next, I would like to briefly share my thoughts:

1. How to build a popular social app and when it appears seems to be a random "emergence" event, and even if it suddenly explodes, it is difficult to escape the curse of a short life cycle. In my opinion, this is due to the past development of Social, either like Farcaster and Lens, the overall architecture of the communication protocol layer changes, relying on the adaptation of other chains and applications to integrate applications; Either Friendtech, Degen, etc., can only be driven by apps and communities, and eventually they will not be sustainable due to the cumbersome economic model.

And an exclusive social chain that focuses on user experience and designs a user retention mechanism for the C-side, and tries to motivate developers to build social applications for the B-side, may be the best solution to give birth to popular social apps?

2. Cyber quickly enters the layer2 field to make an exclusive social chain, and draws on the strengths of others in terms of technical architecture:

1. Choose to build based on the OP Stack and join the Optimism super chain family, fast chain is the appearance, more importantly, it can connect the resources behind the OP Stack Alliance, share users and liquidity (potential Airdrop);

2. The Altlayer-based RaaS service realizes the availability of DA data beyond the flexible integration Ethereum, which can significantly drop the cost of application construction and operation and maintenance in the initial stage.

In addition, CyberConnect's own CyberConnect protocol social graph, CyberDB Decentralization storage solution, identity authentication methods such as account abstraction (AA), Passkey, WebAuth, and Paymaster Gas are all beneficial to attract developers to develop applications. The key is that a social chain must have a low user entry threshold and an optimized product use experience, and when the chain becomes a unified entry layer, the original unified decentralized identifier (DID) mechanism of CyberConnect will be amplified and become a strong label for its social entrance.

3. The reason why Cyber wants to upgrade from a decentralization social protocol to a chain, in essence, the goal is to further gather a larger range of resources through the bottom layer of the chain, for example: when finally upgraded to EigenDA, the new Cyber chain will have continuous asset gain in Staking and Restaking.

Not only does it adopt the secure consensus layer of AVS, but it also introduces a re-staking mechanism to introduce LRT assets such as ETH, stETH, ezETH, and pufETH to the Cyber Chain. It realizes the implementation of the story told by Eigenlayer as a practical use case, and at the same time finds a new application scenario for CYBER Token to maintain the security consensus of the chain through the dual stake model, which is equivalent to upgrading the token model.

In short, the new brand story of CyberConnect from protocol to chain will obviously have a "gain" effect.

Although the impression of the "social chain" may eventually have to be deepened by the birth of several phenomenal social applications, the Cyber linkage OP Stack super chain, the Eigenlayer AVS re-staking model, and the depiction of a new entry layer story for its CyberDID will also lay the foundation for the development of its social chain in the imaginary shorts of the short-term resource aggregation narrative.

Author: Frank, PANews

The man who led the retail vs. Wall Street is back. Twitter user @Roaring Kitty (real name Keith Gill) was the initiator of the 2021 retail Airdrop that drove GameStop's stock price to a surge. On May 13, Roaring Kitty became active on Twitter again, posting a large number of small videos on Twitter and hinting at a new retail revolution in the community. (Related reading: GME short squeeze promoter Roaring Kitty returns after three years of "disappearing", will it usher in a new round of upward pumping?) ）

Affected by the news of his return, the MEME coin related to him also ushered in a wave of big pump. Among them, KITTY and GME are the tokens with the most direct correlation, and they are also the two Tokens with the most eye-catching market performance. GME (solana chain) has pumped up 257 times in the past week, and KITTY (BASE chain) has pumped up 157 times.

MEME CONJECTURE TRIGGERED BY A SMALL VIDEO

All of a sudden, Roaring Kitty once again became synonymous with wealth codes in the market, and retail investors began to focus on Roaring Kitty's Twitter content to try to discover new wealth codes. And he himself seems to be very keen on posting small videos, posting dozens of them every day. Some encryption users have launched relevant MEME Token based on their video footage, trying to rub the popularity of Roaring Kitty.

Roaring Kitty's videos are basically clips and splices of some movie clips, with a duration of less than a few tens of seconds, and there is no clear theme, but the overall content seems to be related to heroism and resistance. For example, the clip of the brave heart male protagonist shouting Freedom before being executed, or the scene of the Avengers against Thanos, etc. In addition, he will deliberately enlarge the subtitles of these videos and mark them in red or highlight some of the keywords.

PANew counted 46 keywords that appeared in Roaring Kitty's videos in the last few days, and found that the number of MEME coin created on Solana based on these keywords reached 202. This grand occasion is quite like Elon Musk's lead order on Ethereum.

NINETY PERCENT OF THE RELEVANT MEME IS UNTRADED

However, it may be that MEME players overestimated Roaring Kitty's MEME influence, and of the 202 MEME coin released from his videos, only one JUST UP Token was out of shape, pump 10 times in a short period of time after a Chinese MEME KOL's advocate, but as the popularity faded, the Token also quickly fell fall, and the price has now fall 94% from its high, with a market capitalization of only $16,000.

Longest of the other Tokens were not bought or sold after launch, and only 4 of the 202 Tokens had some transactions.

Why is there such long worthless Token being issued? The main factor behind it is from the Pump.fun this one-click coin tool makes the cost of coin lower and lower, in the past, it takes at least a few hundred dollars to issuance a MEME coin on the Ethereum, if the benefits of the coin can not even cover the cost, then this kind of keyword will not appear very long Token. The cost of issuing coins on Solana is now reduced to about $2, which is almost negligible for users who want to earn a pot of gold by issuing coins. As a result, it can be seen that almost all MEME coin related to Roaring Kitty were released on Solana.

Another reason is that Roaring Kitty's videos are posted very frequently, and there are longest keywords in one video. If you issuance Token all the keywords in the video, then hundreds of new Token can appear almost every day. These keywords also have little follow-up remarketing opportunities. In this regard, it is completely different from the MEME coin of Musk's previous TROLL and GROK, the keywords caused by Musk are generally mentioned repeatedly, and the keywords themselves represent an event or a product, which is random and developing. As time progresses, every time these keywords are mentioned again by Musk or there is some progress, it will affect the market performance of such MEME coin. Roaring Kitty's video footage doesn't have these characteristics, it's just wishful thinking on the part of retail investors.

Distraction is no longer difficult to get out of the golden dog

While the Solana and Base chains have caused a MEME coin hot state for nearly half a year, Cointelegraph reports that more than 1 million new Crypto Assets have been launched since April, including 640,000 on Solana and about 320,000 on Base. At the same time, Solana's DEX volume also exceeded $1 billion for several consecutive days. Behind this excitement, for MEME coin players, it does not mean that the opportunities are more long, but that the heat is more dispersed, and it is more difficult to find the "golden dog".

Taking Roaring Kitty as an example, this round of hot chases is not only focused on a certain on-chain, GME and KITTY have issuance in Solana, Base, and Ethereum on-chain, and they have nothing to do with each other. This leads to the popularity being dispersed across longest coins, and it is difficult for funds to concentrate on promoting a project to create a hot effect.

For the player, this also increases the probability of stepping on the pit. According to PeckShield monitoring, a GME MEME coin of the same name was instantly zeroed out by the project party dump, and $270,000 of ETH was robbed of the disk. And even the most direct Token of Roaring Kitty's hot spot has generally big dumped after a brief rally. The average falls are around 70%.

Overall, making money on popular MEME coin doesn't look like an easy task. In addition to hot spots, there are also issues such as the safety of the contract, whether there is a direct push behind it, and the timing of buying and selling. Otherwise, blindly chasing hot spots will not avoid the result of being play people for suckers.

Original author: Nancy, PANews

As Hong Kong's Web3 environment becomes more and more open, in addition to long Hong Kong investment institutions buying American Bitcoin Spot ETF in a big way, more and more long Hong Kong stocks are also entering the crypto track. This article takes stock of 8 Hong Kong-listed companies that have joined the Web3 wave this year, in addition to large-scale allocation of encryption assets, these institutions have also combined their own business with Web3 technology, and invested in related encryption projects to promote business longing development and even transformation, which has a certain effect on their stock prices.

Boyaa Interactive: Plans to purchase up to $100 million Crypto Assets long, driving the latest quarterly profit rise 1130% year-on-year

Boyaa Interactive, a Hong Kong-listed company whose main business is games, began to test the encryption market in the second half of last year, aiming to fully transform into a Web3 listed company. As of May 16, Boyaa Interactive's share price has increased nearly 3.6 times from its peak at the beginning of the year, once hitting an all-time high since February 2016.

In August 2023, Boyaa Interactive announced that its board of directors had approved a budget of US$5 million to purchase Crypto Assets such as Bitcoin and Ethereum, which is funded by cash reserves generated by the Group's operations in Hong Kong and overseas. After a lapse of several months, Boyaa Interactive once again announced that it intends to purchase up to long US$100 million Crypto Assets in the next 12 months, including Bitcoin, Ethereum and USDT, etc., and said that the purchase and holding of Crypto Assets is an important measure for the group's business layout and development in the Web3 field and an important part of the group's asset allocation strategy.

According to the announcement data in March this year, Boyaa Interactive purchased a total of 1,110 Bitcoin coins at an average price of about $41,790, a total of 14,855 Ethereum coins at an average price of about $2,777, and about 8 million USDT. Based on the current (May 16) prices of these Crypto Assets, Boyaa Interactive has a total floating profit of more than $30.335 million. According to the latest announcement of Boyaa Interactive, its profit in the first quarter of this year rises by 1130% year-on-year due to crypto assets.

In addition to the purchase of Crypto Assets, Boyaa Interactive has also invested in long Web3 projects, including in April this year, Boyaa Interactive signed a subscription protocol with Pacific Waterdrip Digital Asset Fund SPC, investing $1 million in the fund, and making strategic cooperation in the field of Web3 game development and Bitcoin ecosystem, the latter mainly invests in Metaverse, NTF and the Blockchain field of Web3 infrastructure; Boyaa Interactive participated in the $1.25 million seed round of RootData, a Web3 asset data platform; AWAKENING VENTURES, a Web3 venture capital fund, has received a $500,000 investment from Boyaa Interactive, which is mainly used to invest in Programmability Bitcoin web, Web3 games, Easy Smart Earn (ESE), application infrastructure (such as Application Layer protocol), etc.

In addition, Boyaa Interactive revealed that it has established a Web3 research and operation team, which will focus on the development of Web3 games and related Web3 infrastructure research and development, including Wallet, Decentralized Finance products, etc.

Coolpad Group: It has purchased $27.86 million in encryption assets and plans to spin off Bitcoin Mining company to go public in the United States

Hong Kong-listed Coolpad Group is a Chinese mobile communication terminal equipment development and software development enterprise, the core business is mobile phones, but it has faced losses for longing years. According to the 2023 interim financial report disclosed by Coolpad Group, its revenue was HK$172 million and its net profit loss reached HK$117 million, while its revenue peaked at HK$24.9 billion in 2014. Due to the latency of Coolpad Group's release of its 2023 performance statement, it has been in a state of suspension for longest, and the 2023 audit is expected to be completed by the end of June 2024.

Due to the poor mobile phone business, Coolpad Group began to explore new businesses. Recently, Coolpad Group announced that the group is actively seeking opportunities to enter the digital money field, which the company sees as an opportunity to expand its encryption business, and also make the group's business more longer and provide another revenue channel. Its wholly-owned subsidiary, Digital Tech, has purchased $27.86 million in encryption assets, acquisition 1,500,000 shares of the Bitcoin Mining company's Cleanspark CLSK (approximately $15.89 per share) for a total consideration of approximately $23.84 million between April 16 and May 8, 2024, and acquisition 113,000 IBIT shares for a total consideration of approximately $4.03 million between April 19 and May 8, 2024 shares (approximately $35.64 per share). At current prices (May 16), Coolpad Group's floating profit exceeded $2.074 million.

It is worth mentioning that in addition to launching a new business related to the Mining of encryption assets by the end of 2023, Coolpad Group has also made large capital expenditures related to property, plant and equipment, such as spending more than $12 million to purchase electronic computing servers for encryption Mining between August and November 2023, and is also considering the possibility of spinning off its wholly-owned subsidiary, Coolbit Technologies Limited, and listing it independently on the NASDAQ in the United States. It is reported that the subsidiary has launched a Digital Money investment business since the second half of last year, focusing on Bitcoin Mining.

Blue Harbor Interactive: Increase the Crypto Assets purchase limit to $6 million

Mobile game developer Langang Interactive began to enter the Web3 business and related assets as early as last year. In September 2023, Blueport Interactive issued an announcement announcing the purchase of a total of 92.4712 Bitcoin in open market trading on June 15, 2023, July 7, 2023, August 8, 2023 and August 17, 2023, respectively, and in the 12 months prior to the date of this announcement, Blueport Interactive also purchased 93.85 Bitcoin for approximately $2.7 million.

Since entering 2024, Langang Interactive is accelerating the layout of encryption business. In late January, Blueport Interactive announced that the board of directors is authorized and empowered to adjust the maximum amount of Crypto Assets to be purchased in open market transactions from a maximum of long $5 million to $6 million. At the same time, Langang Interactive has also announced investments in long encryption projects, such as BiHelix, an infrastructure in the Bitcoin RGB field, Merlin Chain and Bitcoin cross-chain bridges XLink for Bitcoin Layer 2 expansion solutions.

As of May 16, Blueport Interactive's share price has increased nearly 2.7 times since the beginning of the year, and once hit a new high since March 2020.

Guofu Innovation: Plans to spend 5 million Hong Kong dollars to buy Crypto Assets, which has been laid out longing times before

Hong Kong-listed Guofu Innovation is also actively carrying out Web3-related business layout, and believes that Crypto Assets investment will enable the group to better adapt to changing market conditions, and will help the business transform from TradFi industry to innovative finance and Fintech.

As early as August 2023, Fortune Securities, a wholly-owned subsidiary of Guofu Innovation, submitted an application to the Hong Kong Securities and Futures Commission to engage in virtual asset-related activities, aiming to provide investors with a strategy of longing services to open up new revenue streams. Soon after, Guofu Innovation announced its entry into the virtual asset space again, and its wholly-owned subsidiary, Fortune Genesis Holdings Limited, proposed to acquisition from Chairman Liu Zhiwei of a $1.6 million equity interest in Summer Feeder Fund Limited, which invests in SEBA Bank AG, a banking entity primarily engaged in Crypto Assets-related banking services.

Recently, Guofu Innovation announced that its board of directors has approved a budget of 5 million Hong Kong dollars for the group's investment in Crypto Assets and virtual asset funds in the next year. The budget will be mainly used to purchase Crypto Assets (mainly including Bitcoin) on regulated and licensed trading platforms; and subscription to a Hong Kong Compliance Virtual Asset Fund (i.e. a virtual asset fund in which the fund manager is authorized to carry on Type 9 regulated activity under the Securities and Futures Ordinance and is approved to invest longest 10% of the total asset value of the portfolio in virtual assets or indirectly invest in virtual assets). In addition, Guofu Innovation has previously invested in virtual asset management company MaiCapital, stored value payment instrument company Yuan coin technology, digital exchanges TideBit and digital asset bank SEBA Bank, and recently invested $1.5 million in Web3 music startup Star Nest through its wholly-owned subsidiary Chuangqi International Limited.

Since Guofu Innovation announced plans to buy Crypto Assets, as of May 16, its share price has only achieved a single-digit pump, but it has hit a new high since December 2020.

Ying Universe: Plans to spend $100 million on Crypto Assets over the next 5 years

Ying Universe is an interactive social platform listed on the Hong Kong stock market, which was renamed in 2022 due to its entry into the Metaverse business, and its products include Yingke Live, Opposite, Super Like, Jimu and other long products, mainly involving live broadcast, blind date and social three major business zone. According to the 2023 annual performance financial report released by Ying Universe, its total revenue in 2023 will be 6.84 billion yuan, and its net profit will reach 400 million US dollars, a year-on-year rise of 337.8%.

In March this year, Ying Universe announced that Crypto Assets investment is an important part of the group's Web3 business development strategy and asset allocation strategy, and its board of directors has approved a budget of $100 million for the group to purchase Crypto Assets on any regulated and licensed trading platform in the next five years, funded by its existing cash reserves. The stock price of Ying Universe did not pump significantly because of the news, but it hit a new high this year.

CMGE: Cooperate to develop Web3 games and purchase virtual assets

CMGE, a Hong Kong-listed company, is a global IP game operator, with a total operating income of 2.6 billion yuan in 2023 and a net profit of 5.379 million yuan. In addition to being a member of the Hong Kong Web3.0 Association, CMGE has recently reached a cooperation with Hashkey Group to promote the development of Web3 games and game platform business, and will open an account on HashKey Exchange to purchase virtual assets. In addition, HashKey Group will also provide institutional virtual asset custody services for CMGE.

Or affected by this news, as of May 16, CMGE's share price has pumped by more than 23.8%, once hitting a new high so far in 2024.

Wealthking Smart Investment: Will delve into the Crypto Assets market and capture investment opportunities

Wealthking Intelligent Investment is a cross-border cross-border investment platform listed on the main board of the Hong Kong Stock Exchange. In addition to announcing the opening of HashKey Exchange last year, Wealthking Intelligent Investment also recently announced that its wholly-owned subsidiary entered into a fund subscription document and limited partnership protocol on April 23 this year in respect of a fund established and managed by Tide Capital called "Tide Investment One Limited Partnership". At the same time, Wealthking Intelligent Investment said that the fund investment aims to enable the company to penetrate the digital asset and crypto assets markets, and capture investment opportunities in this field with TideCapital's professional advantages.

Since the announcement, the share price of Wealthking Intelligent Investment has not changed significantly.

Victory Securities: Hong Kong's first virtual asset retail brokerage, which has launched a virtual asset trading business

Victory Securities is Hong Kong's first virtual asset retail brokerage. According to the data disclosed by Chen Peiquan, executive director of Shengli Securities, at the end of 2023, the average monthly turnover of its virtual asset trading and trading services has reached US$10 million and has already achieved profitability.

This year, Victory Securities not only launched the stock coin trading app VictoryX to allow users to trade stocks and Crypto Assets on the same platform, but also reached Depth cooperation with encryption projects such as HashKey Exchange and TokenPocket, and also became the only participating securities firm in the first batch of Bitcoin and Ethereum Spot ETF in Hong Kong to accept physical subscriptions.

In terms of market performance, after a long period of sluggishness, Shengli Securities' share price began to pump sharply at the end of November last year and hit a record high in April this year.

Link to original article

Author: Deep Tide TechFlow

For sucker, paying attention to the advocate of all kinds of KOL bloggers is an important source of wealth passwords.

So KOL advocates orders, is it a winning general who always earns, or is it an accidental coincidence again and again?

Different bloggers have very different answers to this question. A 100-fold correct advocate, or a zero-down false recommendation, can become a very subjective survivor bias.

From the perspective of the entire industry, what is the final record of KOLs with orders?

In February, several researchers from Harvard Business School, Indiana University Business School, and Texas A&M University published a paper called "Crypto Assets Influencers."

The article examines the performance of encryption asset-related returns mentioned in approximately 36,000 tweets posted by 180 of the most prominent Crypto Assets social media influencers (KOLs) over the two-year period ending in December 2022, covering more than 1,600 tokens.

Key Results:

After using machine learning to classify tweets and track the tokens mentioned in the tweets and their subsequent price performance through longest statistical descriptions and tests, the key results are as follows:

1. Crypto Assets influencer's tweets initially with positive returns. But these tweets were followed by significant long-term negative returns, suggesting that the long-term investment value they generate is minimal. **
2. These tweets have the most pronounced impact when they have small coins, large Twitter followers, and self-proclaimed experts. **
3. The paper classifies Tweets using a machine learning approach and finds that the above result patterns are stronger when Tweets have a more positive sentiment or are associated with a "buy" recommendation. **

Data illustration

Tweets from Crypto Assets influencers show positive short-term return effects:

Tweeting advocate a coin has an average one-day (two-day) return of 1.83% (1.57%).

Crypto Assets projects outside the top 100 by market capitalization returned 3.86% one day after advocating orders

The earliest time earnings started to drop significantly was five days after the tweet was posted. The average return from day two to day five was -1.02%, suggesting that more than half of the initial pump was wiped out within five trading days.

From a longer-term perspective, the average cumulative return 10 and 30 days after the tweet was published was -2.24% and -6.53%, respectively. We further documented these negative after-the-fact returns, which were even more negative for low market capitalization Crypto Assets (where information and Liquidity issues were the most severe).

**A rough estimate indicates that an individual investing $1,000 to buy a non-top 100 encryption Token on the date of the Tweet and holding the investment for thirty days would incur a loss of $79 (7.9%), representing an annualized loss of 62.8%. **

What is an expert: When an influencer calls himself an expert, the post-event return is more negative; And when these experts have longest followers, the rate of return is worse. **

Overall, the findings suggest that the long-term investment advice provided by Crypto Assets influencers is, on average, unprofitable. Only by exiting the position immediately after the tweet is published can you profit from it, but this strategy may not always work due to insufficient market liquidity. Moreover, this act of selling immediately is contrary to the "never sell" culture in the Crypto Assets community. **

Think

The collective evidence in the paper suggests that investors should be cautious about following the investment advice of Crypto Assets KOLs, as large longing gains disappear shortly after tweets.

But the author of the article also admits that the evidence is not yet conclusive. Crypto Assets KOLs may simply benefit financially by chasing trends or promoting tokens that will earn them the most visibility and fans.

In addition, a more innocuous alternative explanation is that Crypto Assets influencer does believe that encryption asset will eventually experience a high level of rise. Influencers may also simply focus on recommending short-term purchases and assuming investors know to sell immediately.

Still, the paper's results provide a wealth of information, as they provide clear evidence that investment advice is unlikely to be useful if a person holds Token for more than a few months or even years.

At the same time, the paper suggests that regulators and the commercial media may prompt more long scrutiny of such behaviour to determine whether these activities are related to more long related conflicts of interest.

Addendum: The top 25 Twitter accounts mentioned in the paper (the table is the ranking 2 years ago due to the time of the paper's research)

YESTERDAY (15 MAY 24) USHERED IN THE RELEASE OF BLOCKBUSTER ECONOMIC DATA, AND THE U.S. CPI INDEX WAS BROADLY IN LINE WITH EXPECTATIONS AFTER THREE CONSECUTIVE INFLATION DATA EXCEEDED EXPECTATIONS IN THE PAST FEW DAYS; Retail sales data was unexpectedly flat, continuing the recent weakness in consumer data. Although the current inflation level and momentum are still well above the Fed's target, these two data have alleviated the market's concerns about a re-acceleration of prices to some extent, restored the market's confidence in the Fed's interest rate cut in September, US Treasury yields short term down, and the three major US stock indexes also closed pump around 1%, hitting a record high.

Source: SignalPlus, Economic Calendar

Source: Investing

On the Digital Money side, boosted by weaker U.S. economic data, BTC prices went all the way up above the 66,000 mark, attracting a carnival in the community, and BTC Spot ETF has also seen relatively healthy inflows recently, although IBIT no longer has rise, but yesterday's single-day total inflows also reached 303 $m, mainly contributed by FBTC and BITB. On the other hand, as you can see from the comparison chart below, ETH performed relatively poorly in this round of market, and only half of BTC's pump in the past 24 hours, returning to around $3,000.

Source: TradingView

Source: Farside Investors

Options, the implied Volatility levels of BTC and ETH also show very different changes. The main change in BTC is reflected in the upside of the mid-to-long-end IV, and the Block Trading of the past day is also mainly distributed in the mid-to-long-term, the largest one is the Long Straddle with 277.5 BTC per leg bullish Volatility at the end of June, and the diagonal spread of selling May to buy June Call. ETH Front-End IV moved sharply lower, attracting a large set of Buy 17 MAY vs Sell 24 MAY deals of up to 19,450 ETH per leg, while there were also a number of call options Build a Position Options on-chain at the end of May, and despite ETH's relatively poor recent performance, there are still traders who are betting on their next upside short.

Source: Deribit (as of 16 MAY 16: 00 UTC+8)

Source: SignalPlus

Data Source: Deribit, overall distribution of ETH transactions

Data Source: Deribit, overall distribution of BTC transactions

Source: Deribit Block Trade

Source: Deribit Block Trade

You can search for SignalPlus in the ChatGPT 4.0 Plugin Store for real-time encryption information. If you'd like to receive updates from us, follow us on Twitter at @SignalPlus_Web3 or join our WeChat group (WeChat: SignalPlus 123), Telegram, and Discord to connect with long fren. SignalPlus Official Website：

Original author: Deep Tide TechFlow

For sucker, paying attention to the advocate of various KOL bloggers is an important source of wealth passwords.

So KOL advocates orders, is it a winning general who always earns, or is it an accidental coincidence again and again?

Different bloggers have very different answers to this question. A 100-fold correct advocate, or a zero-down false recommendation, can become a very subjective survivorship bias.

From the perspective of the entire industry, what is the final record of KOLs with orders?

In February, several researchers from Harvard Business School, Indiana University Business School, and Texas A&M University published a paper titled "Crypto Assets Influencers."

The article examines the performance of encryption asset-related returns mentioned in approximately 36,000 tweets published by 180 of the most prominent Crypto Assets social media influencers (KOLs) over a two-year period ending in December 2022, covering more than 1, 600 tokens.

Key Results

After using machine learning to classify tweets and track the tokens mentioned in the tweets and their subsequent price performance through longest statistical descriptions and tests, the key results are as follows:

**1. Crypto Assets influencer's tweets initially with positive returns. But these tweets were followed by significant long-term negative returns, suggesting that the long-term investment value they generate is minimal. **

**2. These tweets have the most pronounced impact when they have small coins, a large number of Twitter followers, and self-proclaimed experts. **

**3.The paper used machine learning methods to classify tweets and found that the above result patterns were stronger when the tweets had a more positive sentiment or were associated with a "buy" recommendation. **

Data illustration

Tweets from Crypto Assets influencers show positive short-term return effects:

Tweeting and advocating a coin has an average one-day (two-day) return of 1.83% (1.57%).

Crypto Assets projects outside the top 100 by market capitalization returned 3.86% one day after advocating orders

The earliest time earnings started to drop significantly was five days after the tweet was posted. The average return from day two to day five was -1.02%, suggesting that more than half of the initial pump was wiped out within five trading days.

Looking at the longer term, the average cumulative return 10 and 30 days after the tweet was published was -2.24% and -6.53%, respectively. We further recorded these negative post-event returns, which were even more negative for low market capitalization Crypto Assets (where information and Liquidity issues were the most severe).

**A rough estimate indicates that an individual investing $1,000 to buy a non-top 100 encryption Token on the date of the Tweet and holding the investment for thirty days would incur a loss of $79 (7.9%), representing an annualized loss of 62.8%. **

What is an expert: When an influencer calls himself an expert, the post-event return is more negative; And when these experts have longest followers, the rate of return is worse. **

Overall, the findings suggest that the long-term investment advice provided by Crypto Assets influencers is, on average, unprofitable. Only by exiting the position immediately after the tweet is published can you profit from it, but this strategy may not always work due to insufficient market liquidity. Moreover, this act of selling immediately is contrary to the "never sell" culture in the Crypto Assets community.

Think

The collective evidence in the paper suggests that investors should be cautious about following the investment advice of Crypto Assets KOLs, as large longest gains disappear shortly after tweets.

But the author of the article also admits that the evidence is not yet conclusive. Crypto Assets KOLs may simply benefit financially by chasing trends or promoting tokens that will earn them the most visibility and fans.

In addition, a more innocuous alternative explanation is that Crypto Assets influencer does believe that encryption asset will eventually experience a high level of rise. Influencers may also simply focus on recommending short-term purchases and assuming investors know to sell immediately.

Still, the paper's results provide a wealth of information, as they provide clear evidence that investment advice is unlikely to be useful if a person holds Token for more than a few months or even years.

At the same time, the paper suggests that regulators and the commercial media may prompt more long scrutiny of such behaviour to determine whether these activities are related to more long related conflicts of interest.

Addendum: The top 25 Twitter accounts mentioned in the paper (the table is the ranking 2 years ago due to the time of the paper's research)