On April 9, at the closing ceremony of the 2024 Hong Kong Web3 Carnival, Dr. Xiao Feng, Chairman of Wanxiang Blockchain and Chairman and CEO of HashKey Group, published an Depth Observation of the explosion of Blockchain and Web3 industry applications. Dr. Xiao Feng believes that Web3 is about to usher in its own "1995 moment", and comprehensively analyzes the basic framework for the arrival of this moment, and the timing of the arrival. In addition, Dr. Xiao Feng released the White Paper "First Principles of Web3 New Economy" at this carnival.

1. The "1995 Moment" of Blockchain

1.1 The Distributed Ledger Revolution

Bookkeeping is the foundation of human economic activity. Every major change in the way of bookkeeping is accompanied by the upgrading of the human economic system and has a profound impact on human society.

**Human bookkeeping 1.0 can be traced back to 3500 BC as a clay tablet single-entry ledger of Sumerian society in Mesopotamia. This simple ledger records the borrowing and lending relationships that people developed through temples at the time. As a result, they were able to take inventory and learn to maintain a balance between income and expenditure. This is the source of credit coins, and it is the first time that humans can observe the world and manage their economic activities from a quantifiable perspective.

**Human bookkeeping 2.0 began with the invention of double-entry bookkeeping in Europe in the 1300s AD. **Double-entry bookkeeping combines the seven elements of the art of writing, arithmetic, private property, coin symbols, credit, remote commerce, and capital, and proposes the principle of "borrowing must be loaned, and borrowing must be equal". Double-entry accounting can better protect the rights and interests of fund providers (mainly banks and investors), facilitate the accumulation and circulation of social funds, and shift the perspective of observing economic activities from balance to balance of assets and liabilities, profits and shareholders' equity appreciation. Double-entry bookkeeping is a great progress in human commercial civilization and has played a vital role in the rise of the modern corporate system and the formation of the world's financial system.

**Human bookkeeping 3.0 started in 2008 Satoshi Nakamoto Blockchain technology proposed in the Bitcoin White Paper. **Blockchain technology realizes distributed bookkeeping in a trusted and transparent way, making value transfer as convenient and efficient as information transfer, and does not rely on any intermediary. The digital money and digital assets generated by tokenization not only change the unit of account, but also promote the financing and liquidity aggregation of funds around the world, and economic and financial activities break through the geographical boundaries of sovereign countries and continue to expand into the digital world. The human division of labor and collaboration model is undergoing great changes, individuals are empowered, organizations are restructured, and the new Web3 economy is booming.

1.2 Blockchain infrastructure maturity and application explosion

**Blockchain infrastructure capable of hosting large-scale applications is basically formed. ** Since 2023, the Bitcoin second floor protocol has shown great innovation short. Ethereum is progressing step by step from the initial single chain, to the Rollup central route, the modular blockchain and Cancun upgrade, to the future account extraction and chain extraction. The high-performance Alt Layer1 is constantly iterating, and the ecosystem continues to grow and is full of vitality. At the same time, Xu long developers are working hard in subdivided fields, such as the development of full-chain game engines, the landing of ZK in actual scenarios, and the breakthrough of fully homomorphic encryption.

**Blockchain application development barriers are dropping. **Application projects can range from scalability, decentralization, autonomy, and security

Compare DApps, Rollup Apps, Layer3s, and App Chains from other perspectives, and formulate the most appropriate technical solutions as needed. A variety of Open Source tools that drop the difficulty of application project development, donations from different ecosystems, and platforms and communities for developers to communicate and learn from each other make Web3 application development more convenient and effective.

**Integration of digital money and digital assets into the mainstream financial system. ** The 2024 SEC approval Bitcoin Spot ETF is a milestone in the development of the new Web3 economy. This allows digital assets to connect with a wider range of users and liquidity, and occupy a place in the mainstream financial market. The tokenization of real-world assets and securities (i.e., RWA and STO) will enable further integration of digital assets into mainstream financial markets.

1.3 Welcoming the "1995 Moment" of Blockchain

In the 90s, the birth of the World Wide Web and the retirement of the NSFNET backbone network marked the beginning of Web 1.0 commercialization. The "1995 moment" was a critical moment for the Internet to shift from system and architecture construction to application platform development. Most of the world's Internet platforms, including Amazon, eBay, Yahoo and Google, were born in the 10 years between 1995 and 2005. Looking back at history, the contributing factors of the "1995 moment" of the Internet include: first, technological iteration and infrastructure improvement; second, the spirit of open and free Open Source; third, full of imaginative shorts; and fourth, capital boost.

With all these contributing factors in the current Blockchain space, the "1995 moment" of Blockchain is about to be ushered in. The accumulation of technology in the past 16 years, an active developer community, continuous adventure and innovation, the emergence of generative artificial intelligence, the imminent Halving of Bitcoin, and the integration of digital money and digital assets with the mainstream financial system will give rise to the "Cambrian explosion" of Blockchain applications in the next 10 years. The next 10 years will be the most exciting, and 99% of wealth creation in the new Web3 economy has just begun.

Second, all value can be tokenized

2.1 The value law of the new Web3 economy

The new Web3 economy is the "borderless economy". ** Subject to the limitations of technology, transaction costs, trust radius and contract enforceability, most of the traditional economic activities of human beings have boundaries, the small ones are limited to one enterprise or one industry, and the large ones are limited to one country, and a unified market can only be formed through complex trade relations. The new Web3 economy is built on the Decentralization and Trustless of Blockchain and the automatic execution of smart contracts to ensure the automatic execution of contracts, which naturally has the characteristics of cross-time and shorter, cross-organization, cross-industry and even cross-jurisdiction. As an open and transparent global public ledger, Blockchain supports borderless value creation and circulation, and is the most suitable ledger system for the new Web3 economy.

The new Web3 economy has the law of high fixed costs and low or even zero marginal costs. This law determines the difference between the Web3 new economy and the traditional economy. In the new Web3 economy, the construction of the protocol layer and infrastructure requires a large fixed cost, but once the construction is completed, the application layer's invocation of the protocol layer and infrastructure is low or even zero marginal cost. On the one hand, this will accelerate the development of Web3 applications, and on the other hand, it will allow more long value to be deposited into protocol layer and infrastructure.

**Value in the Web3 new economy exists in the form of tokenization, i.e. digital money and digital assets. The technical basis of tokenization is Cryptography and Blockchain. The registration, issuance and circulation of digital money and digital assets are based on distributed ledgers and distributed ledgers, and a distributed financial service system and distributed business applications are established based on smart contracts and tokenomics. Since 2009, Blockchain-related technology research and development, market innovation, and regulatory breakthroughs can all be regarded as building the financial infrastructure of the Web3 new economy, which is fundamentally different from the TradFi financial infrastructure (see Part 4).

In the new Web3 economy, value has two important characteristics in addition to tokenization. First, the path to maximizing value lies in open and permissionless access rights. Whether in the protocol layer or the application layer of the new Web3 economy, in order to maximize the value after the system development is completed, it is necessary to adopt an open source, open and free strategy, and create and aggregate value through network effects; Second, the right to use is more important than ownership. As systems become Open Source, open, and permissionless, the importance of ownership declines, and the right to use becomes the key to maximizing value. As can be seen from Bitcoin and Ethereum, the Web3 new economy is an open right-of-use economy.

2.2 Digital Money

In the new Web3 economy, as the bookkeeping method shifts from centralized to distributed, the unit of accounting shifts to digital money. In a bank account system based on traditional bookkeeping, the unit of account is legal tender coins. In the Internet account system that relies on online registration accounts and bank accounts to support electronic payments, the unit of account is the platform coin associated with the fiat coin. In the Distributed Ledger, the unit of account is Digital Money, which is mainly divided into the following 3 categories.

**Statutory Digital Money, also known as Central Bank Digital Money (CBDC). **Legal digital money is a digital money issued by a central bank and belongs to the category of basic coins (M0). Fiat Digital Money is essentially a digital form of cash.

**Institutional Digital Money, represented by stablecoins. **In the mainstream financial system, the central bank is only responsible for the issuance of the base coin, while the commercial bank creates the coin through credit activities and multiplier effects on the basis of the base coin, thus forming Broad Money (M2). Stablecoins are created by commercial institutions rather than central banks and fall under the M2 category.

Native Digital Money, including native Token in Blockchain protocol such as Bitcoin and Ether coin, as well as smart contracts-native Token built on standards such as ERC20 protocol. **Native Digital Money is the most innovative Digital Money through Algorithm issuance and not associated with legal coin. There is some overlap between native digital Tokens and the utility Tokens described below.

2.3 Digital assets

With the introduction of new accounting units, a new asset class of digital assets has emerged in the new Web3 economy, which is mainly divided into the following 4 categories.

**Utility Token, representing virtual goods. ** The purpose of users to purchase functional Tokens is to obtain the right to use virtual goods, so functional Tokens are essentially sharedization of the right to use virtual goods.

**A security token that represents the sharedization of a company's ownership. Traditionally, company ownership is converted into shares. With the application of Distributed Ledger, corporate ownership has resulted in security tokens through tokenization.

Digital tokens, i.e. NFTs. In the real world, verifying the identity or relationship between individuals and institutions often requires relying on evidence from longest independent institutions. In the digital world, relying on an independent third party for identity verification has become difficult, and NFTs have significant value as a tool for self-certification. NFTs are not only proof of identity and seniority, but also proof of work, contributions, and equity and power, and can even become a self-proof tool for everything in the digital world.

Real-world asset tokenization, i.e. RWA. **Real world assets including REITs, credit assets, securities and funds can be issued to investors in the form of tokens. Some RWAs can be listed and traded in digital asset exchange, while others can be traded in Token form between institutions.

It is necessary to discern several concepts related to digital money and digital assets. First, digital money and digital assets are tokenization products and do not include coins and assets based on traditional account systems and double-entry accounting in TradFi infrastructure, although they are also digital (see Part IV). Second, encryption assets are a subset of digital assets. According to the definition of the Basel Committee, except for legal digital money, other digital assets belong to the category of encryption assets. Third, data assets come from the data element market. On the one hand, data assets have nothing to do with TradFi financial infrastructure or Web3 financial infrastructure, generally stored in databases, structured and unstructured, on the other hand, easy to copy, can be used by longest individuals at the same time, use will not cause consumption or impairment, and it is difficult to clearly define ownership, to a large extent, with the characteristics of public goods. Digital money and digital assets have clear ownership, and related transactions are reflected as ownership changes, which are typical private products.

3. Individual empowerment and organizational restructuring

Technology drives society, and technology reshapes the future. The productivity transformation triggered by the Web3 new economy will inevitably lead to the innovation of production relations, which is first embodied in individual empowerment and organizational restructuring.

3.1 Individual Abilities "Rise"

**Network state, i.e. short network short across time spans. ** The new Web3 economy is built on the interconnection of hundreds of millions of computer users to connect and reconnect, resulting in a new social short – a global, free, and short timeless network short that can be called a "cyber city-state". On the one hand, digital technology transcends geographical boundaries and decouples economic functions, breaking the geographical restrictions of traditional employment relationships, allowing employees and employers to live and work in different jurisdictions. On the other hand, the globalization of the digital economy transcends the boundaries of sovereign states and accelerates the trend of global division of labor and crowdsourcing collaboration. After the digitization and virtualization of user groups, economic activities are increasingly long in cyber city-states. This will fundamentally change the cost of information and transaction costs, which in turn will revolutionize the logic of economic and business activities. The influence of global factors will rise, and the influence of regional factors will decline. The new Web3 economy is not limited to users in one country or one place, but expands greater business opportunities for global users.

Sovereign individual, i.e., the ability of the individual to transcend the organization. ** Web3 and AGI will greatly enhance the productivity of individuals with special skills and talents. Most artificial career boundaries will be broken, and people will no longer need to follow the 10,000-hour rule to learn new knowledge, and will be able to access any professional knowledge such as law, medicine, programming, and art at a lower threshold and lower cost. The economic value of memory as a skill will decline, and skills such as information synthesis and creative application will become more important. This will inevitably break the original power structure and management model of economic activities. The advantage of business organizations in information and transaction costs is declining,

Capital taxes will be dropped in the face of competition, the artificial economies of scale that sustain companies in the long run will no longer exist, and the phenomenon of lifetime employment will disappear. At the same time, sovereign individuals are on the rise, will have access to more long economic and social resources, and will reshape the way resources are allocated. In cyber city-states, the law of survival based on individual autonomy will be carried forward, and sovereign individuals are expected to obtain both individual autonomy and excess returns. In the future, longest wealth can be created and earned, consumed and traded anywhere, and businesses need to adapt to sovereign personal development so that they can realize maximum value.

Digital nomad, living by **** "** water grass ****". ** In 1997, former Hitachi CEO Makinomoto coined the concept of digital nomads, which refers to people who earn first-world income through the Internet, but choose to live in a place where prices are in developing countries. The new Web3 economy has accelerated the development of digital nomads as a way of living. With the emergence of cyber city-states and the rise of sovereign individuals, the flow of talent, knowledge sharing, and cultural collision between transnational virtual communities is taking place at an unprecedented scale and efficiency. For example, Zuzalu, an experimental mobile community conceived by Vitalik Buterin, is joined by talented people from around the world in the fields of encryption, biological sciences, philosophy, politics, and art. A series of spontaneous topics have emerged in the community, covering cutting-edge propositions such as longevity, public goods, zk-SNARKs, synthetic biology, and cyber nations. They dispersed after experiencing human group cohabitation for 2 months, spreading their pioneering ideas around the world. In February 2024, the Japanese government opened the status of residence for "Digital Nomad Designated Activities" to IT workers around the world, allowing them to waive a visa for 6 months.

These phenomena around the world seem to be random, accidental and distributed, but the logic behind them is the new way of life and production spawned by the new Web3 economy, which is manifested in the combination of liquidity and aggregation, the combination of digital shorts and local culture, and the combination of globalization and individualization.

3.2 Business Organization "Transformation"

In the new Web3 economy, business organizations need to rethink the organizational model of human-machine collaboration, and reposition the division of labor and cooperation between agents.

We are pleased to see that OpenAI has adopted a unique equity structure. **At present, OpenAI has established a company limited by shares, but there is a cap on the profit of all shareholders, which is a special governance structure in which non-profit entities and for-profit entities coexist. OpenAI will eventually become an Open Source, open, permissionless and trustless infrastructure that is as common to humanity as the Internet TCP/IP protocol. This architecture is very innovative and difficult to design under the existing model on Wall Street. Only an increasingly digital Silicon Valley tech company like OpenAI would adopt this architecture. They understand their social responsibilities and how in the age of AGI, a new framework for the distribution of benefits and a licensing model for property rights can alleviate concerns about monopolies and super-profits enjoyed by a small group of people.

In the new Web3 economy, all Blockchain protocol are Open Source free, permissionless, and trustless. Anyone can use it, anyone can fork the original protocol, anyone can build their own application on the protocol without any approval. One of the key differences between Blockchain protocol and Open Source organizations is that they have built-in functional Token, standardize and share the right to use, and capture the use value of the network through functional Token, so as to carry out economic incentives and benefit distribution. The design of this mechanism is fully adapted to the value characteristics of high fixed cost and low marginal cost of the digital economy.

**The position of the ownership market has declined and the position of the usufruct market has risen. The industrial economy gives birth to a market of ownership, trading ownership (equity), and the institutional basis is shareholder capitalism. Under shareholder capitalism, the corporate system is the embodiment of the shareholding structure, and the interests of all shareholders are demutualized and traded on the stock exchanges. The digital economy breeds a market for the right of use, the right to trade is the right to use, and the institutional basis is stakeholder capitalism. Under stakeholder capitalism, nonprofits and open source organizations became mainstream. The right to use cannot be demutualized, but can only be tokenization, and the resulting functional Token can be traded digital asset exchange.

Fourth, Global Financial Infrastructure 2.0

4.1 Web3 financial infrastructure

**Web3 financial infrastructure is a product of Distributed Ledger and distributed bookkeeping, which is fundamentally different from TradFi infrastructure based on traditional account systems and double-entry bookkeeping. ** Coins and financial assets carried by TradFi infrastructure, including central bank coins other than cash, commercial bank deposits, Internet payment accounts stored value, and stocks, bonds and commodities recorded in the accounts of central securities registrars or custodians, are essentially values expressed in account balances in the traditional account system. The circulation and trading of these coins and financial assets are essentially debits and credits to related accounts based on double-entry accounting. Web3 financial infrastructure carries digital money and digital assets, and supports their registration, registration, custody, issuance, circulation, trading, clearing and settlement. Digital money and digital assets are both tokenized values with property characteristics, which are key to "occupying is ownership" and "transaction (or payment) is settlement".

**Web3 Financial Infrastructure represents the Global Financial Infrastructure 2.0 version. **Tracing back to the source, the essence of the financial system is the state and transactions, the state is reflected in the distribution of various assets and liabilities among the various participants in the financial system at a certain point in time, the transaction is reflected in the activities in the financial system in a certain period of time, and the transaction drives the state update. The state and transactions of the financial system can be recorded through both the traditional account system and the distributed ledger system. Only by rising to this level can we understand the innovative significance of Web3 financial infrastructure. Web3 financial infrastructure has longest excellent features in terms of management methods, transactions, clearing, settlement and privacy protection.

First, openness is better. Any person or institution can use it without permission and without trust, as long as they follow the Blockchain protocol. This is an important manifestation of the democratization and inclusiveness of finance.

Second, it is anonymous in nature, but supports controllable anonymity. Compared with TradFi financial infrastructure, Web3 financial infrastructure can better protect user privacy and ensure each user's sovereignty over their own data. Web3 financial infrastructure can adapt to financial laws and regulations on Know Your User (KYC), AML (AML) and Counter Terrorist Financing (CFT) requirements. This is the basis for the integration of digital money and digital assets into the mainstream financial system.

Third, peer-to-peer transactions, the transaction is settlement. With the support of Web3 financial infrastructure, any two people, no matter where they are or whether they know or trust each other, can have a convenient and secure value exchange without relying on any third party. This will greatly upgrade the human cooperation model and expand the market reach.

Fourth, transactions are inherently cross-border. From the very beginning, the Web3 financial infrastructure has supported the allocation of financial resources on a global scale, the discovery of the price of financial assets, and the management of financial risks.

Fifth, the value carrier and programming logic (i.e., smart contracts) are combined into one, introducing programmability to transactions, enhancing the composability of activities on the Blockchain, and supporting innovative models that have never been seen in the TradFi field. The innovation sparked by smart contracts has been fully validated by the market in the NFT and Decentralized Finance space.

Sixth, high security. The Distributed Ledger is public, and with cryptography and Consensus Mechanism, it ensures the security and immutability of transaction records, and anyone can download the ledger to verify transaction results. Asymmetric encryption technology ensures that only the owner of the private key can control the relevant digital money and digital assets.

**Web3 financial infrastructure is a natural adaptation to digitally native economic systems. First, in the digital native economic system, activities such as asset issuance and trading are completely digital, without national borders, and a financial infrastructure that supports large-scale free circulation of assets and highly interconnected values is needed. Web3 financial infrastructure supports the most efficient value network on a global scale. Second, the Decentralization feature of Blockchain eliminates the problems of high intermediary costs and high trust foundation in TradFi infrastructure. In the Web3 financial infrastructure, users' sovereignty over their assets, data transparency, and transaction security are better guaranteed. Third, the digital native economic system is an economic system based on the right of use, and the network effect is the channel for maximizing the value of the right of use. Web3 financial infrastructure can better facilitate the liquidity and efficiency of the right-of-use market.

4.2 Web3 New Economic Ecology

The new economic ecology of Web3 revolves around digital money, digital assets, and related business applications and activities, with three main components.

Primary market activity for Digital Money and Digital Assets. **This is the source of the new economic ecology of Web3, involving the generation and issuance of various types of digital money and digital assets listed in the second part. These digital currencies and digital assets represent different values, have different application scenarios, are suitable for different investor groups, and are subject to different regulatory frameworks. Primary market activities mainly meet three needs: first, the financing needs of the project party; second, the liquidity needs of investors in the early stage of the project; third, the needs of the project to build a network and promote ecological development. High-quality digital money and digital assets are the key to the success of the Web3 new economy, which is inseparable from professional work in legal compliance, tokenization, technology research and development, and market expansion.

**Secondary Market activity for Digital Money and Digital Assets. **The core of the secondary market is the trading platform for digital money and digital assets. They provide liquidity for digital money and digital assets, facilitate price discovery and resource allocation, enable investors to flexibly enter and exit markets, and support risk management. At present, the secondary market of digital money and digital assets is active and longest in various forms. Professionals and licensing play a crucial role in ensuring the compliance of transactions and the normal functioning of the market. Regulators develop and enforce strict market rules to prevent market manipulation, protect investors' interests, and maintain market stability and transparency. Effective regulation can also help boost market confidence, attract more long players, and drive the maturity and development of the entire digital financial ecosystem.

Industry services for digital money and digital assets. **These services mainly include Blockchain technical support, issuance processes, legal counsel, project consulting and licensed Financial Service, etc., to provide the necessary support and connectivity for the efficient operation of Primary Market and Secondary Market. Industry services cover the entire process of digital money and digital asset projects from launch to transaction completion, with the goal of ensuring that every step is in line with industry standards and the interests of participants. In the preparation and issuance stage of the project, it mainly focuses on market analysis, Token scheme design and Compliance review, etc., with the goal of ensuring the launch and smooth operation of the project. A professional technical service provider is responsible for building and maintaining the trading platform to ensure its security and efficiency. As applications come to fruition, legal and audit teams provide regulatory compliance and financial transparency support, while cryptographic security experts and AML authorities ensure the security and legitimacy of transactions. Depth market insights and strategic recommendations are provided by data analytics and advisory firms so participants can make informed decisions in complex and longest markets. Overall, the common goal of these services is to provide a stable, efficient, and transparent environment for Web3 industry players to do business, and promote the healthy development of the entire industry.

V. Conclusion: Future-oriented Web3 New Economy

The new Web3 economy will lead the global economy to develop in a more open, efficient and inclusive direction, and contribute to the prosperity and progress of all mankind. In terms of serving the real economy, the Web3 new economy will promote the efficient allocation of resources and stimulate industrial innovation and economic rise vitality through more efficient and transparent coin and asset flows, as well as financing methods. The distributed characteristics and Programmability of the Web3 new economy will provide a flexible and low-cost development environment for emerging technology enterprises and projects, and accelerate the transformation and application of scientific and technological achievements. In terms of promoting financial development, Web3 financial infrastructure, as a global financial infrastructure 2.0, is naturally adapted to the digital native economic system, which can break the geographical and time constraints of TradFi services, make Financial Service more global and interconnected, and provide new opportunities for the integration and innovation of global Capital Market.

In 2024, the hottest track, in addition to the Bitcoin ecosystem, is DePIN, which is the abbreviation of Decentralised Physical Infrastructure Networks. Sun Jing has led the IoTeX team in this track since 2017, and Hashkey's investment partner Sunny also paid attention to and invested in this track in the early days.

Part 1: The Evolution of the Concept of DePIN

Q1. Mempool: Please popularize the concept of DePIN, the definition of DePIN on the market is long, there are reports that the concept of DePIN refers to the replacement of existing infrastructure through hardware investment and Token incentives, for example, Messari believes that DePIN is a encryption protocol to deploy real-world physical infrastructure and hardware networks, I would like to ask you to explain the concept of DePIN as you understand it, what are its core elements?

Sun Jing: There's been a lot of discussion about DePIN lately, and I think it's probably a very new concept for listeners, especially those who are new to encryption. DePIN is actually an English abbreviation, its full name is Decentralised Physical Infrastructure Networks, which translates into Chinese as "Decentralization Physical Infrastructure Networks". In the simplest way to explain it: a bottom-up network of physical infrastructure created and maintained by the community. The core elements of DePIN include three points:

Decentralized (Decentralization): Compared with infrastructure networks led and deployed by centralized institutions such as governments, DePIN emphasizes that all members of the community in different regions and countries can participate in the construction of infrastructure. Physical infrastructure: different types of hardware of different sizes, such as IoT, 5G information towers, various servers, or mobile phones, etc. Token Economy: A network where the economy incentivizes the community to contribute and build together.

Regarding whether this definition emphasizes not emphasizing data on the chain, we should see that DePIN is not only a data network, but also a resource network, an information network, a Computing Power network, etc., and the DePIN network has longest use scenarios, and data is just one of them.

The term Sunny:D ePIN was only widely adopted last year, and before the word appeared, everyone actually explored this track for a long time. Broadly speaking, the concept of DePIN incorporates two core elements:

• Basic physical resources: including the most basic Internet of things and industrial Internet of things, as well as data storage, computing and transmission processes, in addition, this concept has recently been extended to a wider range of resources, such as energy or infrastructure construction;
• A highly complex and dynamically balanced Token Economic System: This system effectively incentivizes the interaction between the provider and the demand side of resources.

***Q2. Mempool: DePIN was proposed by Messari in November 2022 when they did a poll on Twitter asking people to pick a name out of a few words to name the track, and the word DePIN stood out from a list of candidates. Subsequently, the concept quickly gained widespread recognition and popularity in 2023. Such a concept is proposed, and even there are some changes in the connotation and extension, whether these changes will have an impact on entrepreneurs and investors.

Sun Jing: A little bit about the history of IoTeX.

IoTeX can be said to be the earliest promoter of the DePIN track, and it is also the earliest public chain project of the DePIN track, and its original intention is very consistent with DePIN, but there was no concept of DePIN at that time. IoTeX was originally intended to be a internet of things of Decentralization, and it emphasized the connection of various devices to connect what happened in the physical world, information, assets, etc., to the Blockchain, Blockchain played the role of a Decentralization ledger at the time, and did not realize that the most important function of Blockchain at the time was an open financial infrastructure.

Until the second half of 2020, when the public chain mature infrastructure was ready, Decentralized Finance began to emerge and lead the application development of the entire encryption industry. After Decentralized Finance, GameFi emerged. At this time, we realized the important value of Blockchain as a value circulation system. **

By the end of 2021, IoTeX came up with the MachineFi concept, which was seen as an early form of DePIN. The biggest difference between MachineFi and the previous Decentralization internet of things is the introduction of Token Economy to realize value delivery with the help of Blockchain, thereby unlocking the potential economic value of internet of things in the Web2 physical world.

Gradually, we found that later different investors and practitioners also saw the same vision, some people proposed Token Incentivized Physical Network, that is, TIPIN, and some investors proposed EdgeFi, emphasizing the use of Edge Computing devices to facilitate a network, everyone came up with different words, until Messari proposed the concept of DePIN, which won the consensus of the industry. Through this word, everyone with the same vision is united, and the resources of all parties are linked and united, and the track of DePIN is slowly formed.

Sunny: From the perspective of an investment institution, HashKey Capital is committed to finding an area that can cause mass adoption of the entire society, such as the token economy, Blockchain technology, and games at the application layer, SocialFi, Decentralized Finance, etc., which have the potential to achieve mass adoption.

At that time, the logic that prompted us to invest in IoTeX's MachineFi was exactly this: if a simple internet of things device such as a watch or a mobile phone could add a crypto-related application to each mobile phone, then its adoption would actually be millions or k million rise, far greater than the pure Crypto application, and from this point of view, DePIN is actually a natural track to achieve mass adoption.

While we are paying attention to this track, we have also seen a lot of long progress and changes, such as IoTeX, Helium, Random and other projects, which have actually completed a wave of very important market education. Through these market educations, we have seen that in the past few years, there have been longest new projects in the fields of data storage, computing and transmission, or more practical applications, such as automotive batteries, energy and other different segments.

At the same time, we have also seen more long people adopt this concept, including some practitioners in traditional industries, such as telecommunications and energy, who are willing to try to introduce Token Economy into their projects, and then test whether this Token Economy can produce a flywheel effect and revitalize the resources of the entire industry. In turn, these entrepreneurs promote the entry of capital into this track. Therefore, we see that there is now a positive cycle and interaction between capital and business. **

Q3. Mempool: Everyone has mentioned 2023 as a tipping point, why 2023, is it infrastructure or something else that has reached a turning point?

Sun Jing: I remember that the whole concept was proposed in November 2022, and after it was proposed, there was a small discussion in the Builder circle who were involved in the development and construction of the DePIN project in the early days, but the concept did not form a track, and there was very little attention from capital.

At that time, IoTeX wanted to connect people and organize an event so that the market could see this new track and understand how it differed from other tracks such as Defi and GameFi. At EthDenver 2023, IoTeX launched its campaign called "R 3a l World" to find all DePIN projects in the market and provide them with a platform to showcase their products. The event was a huge success, and it was the first major event in the industry to focus on the DePIN track, with long attendees being exposed to the track for the first time, with one interesting comment calling it "the WEB3 version of CES" (CES is the largest consumer hardware show in the United States, held in Las Vegas every January).

**Although the event was small at the time, with only twenty or thirty events, the track was already emerging. This is mainly due to two developments: first, Blockchain technology has basically matured, and DePIN projects can be verified on the on-chain; second, the infrastructure of Decentralized Finance has also been established, and in general, each project has begun to find and position its own application scenarios and gradually move forward with development. However, there was still a lack of infrastructure to move data from off-chain to on-chain, which was a key infrastructure that IoTeX later led and launched – W 3 bstream.

This event is just the beginning. Subsequently, through continuous exchanges and activities in the industry, investors began to see its potential, invested more long capital into the market, and long entrepreneurs to devote themselves to this field. At the end of last year, we launched the DePINscan data platform and were surprised to find that the number of projects on the DePIN track on the market has risen from the initial twenty or thirty to more than 600.

Sunny: I'm more curious about where the entire on-chain interactions are concentrated? Last year, especially in the second half of the year, the volume of the entire DePIN track continued to rise, for example, the storage capacity of Arweave is said to have 1.8 billion retrievals, of which 1.2 billion actually happened last year, but in my opinion, the more long interactions actually happened because of pure Crypto projects, judging from your data, is there a more long Web2 IOT Projects or circle-breaking projects focus on Web3 solutions, do you have more long Insights?

Sun Jing: Now the data is basically on-chain interaction, not including off-chain. Because of the rise of such a long project this year, the gradual maturity of the project will lead to the launch of the network, which means that the token and its incentives will start to be generated, and on-chain interactions will also be generated.

That's why we believe the DePIN track is conducive to mass adoption. First, it incentivizes users to contribute devices through the continuous use of tokens, and each token incentive forms an on-chain interaction; second, it truly implements an economic model. Unlike long on-chain projects, which only theoretically have an economic model and do not execute, DePIN projects have an economic model that is completely controlled by the Blockchain on the supply side, which can be analogous to the way Bitcoin operates, that is, clearly define when and how to trigger the Mining mechanism.

We had hoped that Web2 companies would enter the arena and endorse the Web3 economic model, but reality proved that we were overly optimistic. Web2 and Web3 are basically two modes that run in parallel. However, there are still opportunities for Web3 companies to partner with Web2 companies – especially those with a large number of long internet of things devices. DePIN can leverage these devices directly. In the Web2 economy, these devices are usually controlled by a centralized authority and the right to use the data, while in the world of DePIN, the purchaser of each device is not only the owner and user of the device, but also a contributor in the network, and receives a certain amount of income for its contributions, which constitutes a continuous process.

As a result, we believe that for quite some time to come, DePIN's innovation will still be driven primarily by companies with Web3 roots. At the same time, the founders of these companies often have deep experience in the Internet of things or Web2 industry and a deep understanding of the economic model of Web3, allowing them to play a unique advantage in this cross-cutting space.

Sunny: From the conceptual level, applications, and on-chain activity, we can see a strong wave of DePIN in 2023. **Looking at the overall macro environment, we expect a stronger wave of outbreaks on the DePIN track in the next two years. **There are two reasons for this:

• First, from the perspective of the entrepreneur's qualifications, it is necessary to have experience and resources in the Web2 industry, and at the same time, to participate in the participation of people who understand Web3.
• Second, from the perspective of the market environment, the SEC's approval of the ETF in January is equivalent to opening the door at the regulatory level, not only can investment institutions enter the market smoothly through ETF, but also a more relaxed and friendly signal for the regulatory environment, which means that large entities that long want to explore the DePIN field can explore more confidently. If the prediction is correct, then the effect of this large-scale application is that it can pass through the bull and bear cycle because it has a solid set of revenue streams, clear supply and demand, and a clear token economy. We are also optimistic about the explosion of the entire track in the next two years.

Part 2: IoTeX Infrastructure and Economic Model

***Q1. Mempool: Next, I'd like to ask Jing to give us an introduction to the infrastructure of IoTeX, which I believe will help listeners better understand DePIN.

Sun Jing: IoTeX is probably the industry's leading and largest infrastructure platform designed specifically for the DePIN track. This infrastructure platform consists of two main components:

• First of all, IoTeX's public chain, Layer 1, is a key financial infrastructure in DePIN. In the DePIN system, using the Token incentive mechanism to incentivize various contributors in the network, including the supply side and the demand side, is a very important link. All participants ultimately need to trade and settlement efficiently in Layer 1. This is in line with IoTeX's design philosophy of pursuing Decentralization internet of things – having a high TPS (transactions per second) while being able to connect millions or even hundreds of millions of devices in a compatible way, enabling them to Settlement in on-chain at the same time.
• Second, in 2023 we are focusing on off-chain verification and computing facilities, i.e., as middleware or Layer 2, to bring data from the physical world into the on-chain in a verifiable way. However, not all data needs to be stored in Layer 1, in most cases, only the proof of data verification needs to be on-chain, and the computation and storage are carried out off-chain. This involves a key requirement in DePIN networks: zk-SNARKs (ZKPs). For example, the user's vehicle data, such as when the vehicle drove to a certain place, is extremely important to the demand side, such as insurance companies, which rely on this information to set insurance rates. However, users do not want all personal information to be published on the on-chain, so ZKP technology is required at this time.

In addition to the above two points, IoTeX is currently doing two things in depth:

• The first is how to enable the DePIN project party to better develop the project. This involves a lot of long development tools, and these modules can greatly shorten the time from development to launch of DePIN projects, such as from two to three years to two to three months or even a few weeks.
• The second is how to better serve DePIN users, including equipment users and Miners, so that they can participate in different projects more conveniently.

**Overall, IoTeX provides an entire modular infrastructure platform designed specifically for DePIN. **

***Q2. Mempool: IoTeX was founded in 2017 with a focus on Decentralization internet of things. Until then, the concept of the Internet of things has attracted a lot of attention, but the progress of practical application has been relatively slow. As an entrepreneur, do you really feel the accelerated effect of encryption technology on the development of the Internet of things? Please select a few important nodes from the development history of IoTeX to discuss how encryption technology helps the development of the Internet of things industry.

Sun Jing: Before doing Crypto, I was a venture capitalist, mainly focusing on AI, internet of things, VR and AR, which can be said to cover a very long innovation track. However, in the process of investment, we found that no matter what kind of startup, there will be bottlenecks after a certain stage of development. There are two reasons for this:

• The first is the bottleneck of startups. For example, all AI companies face challenges in accessing data – data is longest in the hands of centralized companies, and innovation in AI models alone cannot make these companies grow into a scalable industry. Similarly, Internet of things companies need a huge amount of initial capital if they want to actually build a useful network. They require a lot of money to deploy physical devices and incur high maintenance costs, which is why in the early days only larger companies were able to get involved in the Internet of things space, but it was also inefficient.
• The second is the bottleneck of centralized companies. In the traditional centralized model, the value of Internet of things data is limited by longest limitations, and it is difficult to fully release. This data is controlled by centralized companies, making it impossible to bring more long partners and service partners into the ecosystem in Open Source or more open ways to set the flywheel of rise turning.

The programmability and open source of encryption technology, as well as smart contracts systems, allow us to see new ways to build Internet of things systems in the future. **IoTeX was founded with the vision of building a Decentralization physical system. Although our original intentions were very ambitious, the actual driving process started from scratch and went through several key development nodes:

• The launch of the public chain. **In 2017, the infrastructure of the Blockchain was still very weak, and although Ethereum had been launched, its functionality, performance, and speed were still difficult to meet the needs of the Internet of things system. Therefore, we spent three years building the public chain of IoTeX, a dedicated public chain that can meet the needs of the internet of things. Landing of on-chain devices. **In 2020, after the public on-chain launch, we did not see the Blockchain as just a financial infrastructure, but paid more attention to its Decentralization, Security and Privacy features. In this year, we launched the industry's first on-chain hardware device, Ucam, a smart camera that manages identities entirely by the blockchain, which received positive feedback from the market and is still circulating in the market. Although this step has not yet been fully integrated into the economic model, the key is to realize the integration of hardware and Blockchain, which involves the depth integration of hardware, hardware ID and middleware. Presentation of the MachineFi concept. **By the end of 2021, we recognized the importance of financial incentives in the centralized Internet of things. Therefore, we came up with the concept of MachineFi, which is largely due to the fact that the Decentralized Finance and other NFT scenarios have matured and become a financial module serving other tracks. At that time, we saw the current scenario of the DePIN track: unleashing the economic and financial potential of the Decentralization internet of things, and realizing the financialization and value circulation of devices, resources, and data in the physical world in the on-chain. Development and strategic positioning of DePIN. **In 2023, when Messari proposed the concept of DePIN, the industry quickly formed a consensus. At the beginning of the year, we made DePIN first an important strategy across the network. At present, it has reached cooperation with about seventy or eighty percent of the projects in the industry, becoming the largest and earliest modular infrastructure platform in the industry. We have launched a series of modules, including off-chain computing W 3 bStream, information data platform DePINscan, device identity management Identity, and more. In addition, in order to support the actual landing of DePIN projects and the token economy, we have also established a liquidity center Liquidity Hub to better incentivize users to use products and trade assets, so as to provide longest services and modules for the entire industry.

Q3. Mempool: From a landing perspective, does IoTeX bring some new use cases that have changed users' lives?, or is it still concentrated at the infrastructure level?

Sun Jing**:* IoTeX primarily supports various types of innovation in the DePIN space through infrastructure, with a particular focus on AI-related DePIN scenarios. **We believe that DePIN in AI is likely to be the fastest-growing and largest segment. For example, there's a project called BiTTensor that builds an entire technology stack based on open source AI models and opens it up to AI developers to create subnets that provide a longer variety of services. In addition, we also see that Xu long's AI-based Computing Power platforms and data platforms process very long different types of data, including geographic data, biological data, etc., as well as retail data serving long scenarios such as retail. The core of these applications is still closely related to the collection and use of decentralization AI data, which we see as having great potential. We also looked at vehicle data. Many long companies are focused on mobility, but each has its own focus. Some DePIN projects focus on Decentralization Surdace, others allow users to contribute vehicle data to create Decentralization high-precision maps, similar to the Decentralization version of Waze, and some are doing Decentralization HD maps and so on.

In the future, IoTeX may launch some bolder experimental platforms to push for more long devices to be chained. For example, the recently popular inscription, in fact, is also to create a new fair distribution mechanism for users to participate, but this distribution mechanism is easy to be disrupted by large studios, if there is a layer of authentication based on physical address, device, then the inscription issuance mechanism will be more fair.

We're also seeing some energy companies trying to Decentralization Energy. For example, there is a company PowerPort, they install a device for the tram, and then obtain the green energy data of your use through the device, and this data is itself a credit in developed countries such as the United States, this company will incentivize users according to the time period of use of green energy, and encourage users to charge during the trough period of electricity consumption.

There is also a track that involves the use of existing wearable devices, such as watches and mobile phones, as data collection tools, also known as BYOD (bring your own device). These devices serve as terminals that collect users' daily data, and then contribute this data back to users, forming a closed-loop network. However, there are also challenges in this space, such as how to ensure that users are uploading data that is truly valuable, and how to use that data effectively. But we've also seen better scenarios, for example, a company on our platform called WifiMap has built a network that allows everyone to share their own Wifi resources and use other Wifi resources in the market, which now has 10 million real users.

Q4. Mempool: The economic model does play a very important role in this track, because of the existence of the economic model, this decentralization network is formed, and what are the better models in the industry, and what are the common elements?

Sun Jing: Tokens play a vital role in the overall Decentralization Network, not only accelerating the flow of value within the network, but also making it possible to quantitatively price the value of the different contributors, service providers, and users in the network. IoTeX itself is a public chain with a staking model in addition to the basic payment network Gas.

• First, the gas fee charged on a per-transaction basis, that is, the fee required to use the Blockchain network;
• Second, stake in exchange for network services. Staking can first enhance Consensus security by allowing the network to reach Consensus. In addition, staking also gives stakers the right to participate in the network, such as demand parties can obtain standardized services provided by the network, such as verification or data services, by staking the tokens of the DePIN network. For example, IoTeX's W 3 bStream is an infrastructure service that provides off-chain Decentralization compute to validation. If different node operators want to participate in W 3 bStream and provide services, they can do so by staking IoTeX tokens, and for projects that need these services, they also need to stake IoTeX Tokens to access the services provided by these nodes.

In addition to the economic model of IoTeX, there is also a BME (Burn-and-Mint) model for obtaining services, which burns Tokens, a mechanism that converts Tokens into a unitized commodity purchasing power. In the DePIN track, Helium was one of the first projects to actively promote this BME model. In this model, the network will have two tokens: one is the token of the network itself, and the other is the universal Token used within the network, which can be thought of as a credit in a Web2 company, or a stablecoin used in the network. This stablecoin-like Token is important because the token price of the network itself is usually Fluctuation larger, but the purchasing power of goods and services is relatively stable, so users can burn a certain amount of Token and convert it into a corresponding amount of stablecoin to purchase goods. Of course, there are long many other applications, but stake and burning are the two most important ones, both of which aim to enable participants in the network to participate in the network economy through the use of Token, while providing a relatively rational and calculable pricing model for the economic vitality of the network from outside.

Part 3: Market Size and Integration of DePIN and AI Track

***Q1. Mempool: What do you think of Messari's report that DePIN's flywheel will add longest, if not $10 trillion, to global GDP in the future?

Sunny: In my opinion, the long field is still in the exploratory phase. For example, long-term projects in this space, such as IoTeX, Helium, and Render, have been rising data volumes over the past few years as large enterprises gradually begin to shift some of their storage and computing power to decentralization networks. At the same time, some automakers and different device manufacturers have also begun to incorporate the Token Economy into their devices. In addition, we have seen encryption-native projects, such as the launch of the Saga phone on the Solana ecosystem and Helium's attempt to promote 5 G, embedding apps into devices by selling mobile phones, which are all explored on different levels. The essence of DePIN is supply and demand, which means that a product must have a strong market demand in order to attract the corresponding purchasing power. It is only when purchasing power persists that the flywheel effect, or economic efficiency, continues to increase and expand. At present, Xu long projects are focusing on the supply side, promoting competition for supply-side resources through the so-called flywheel effect to drop costs and attract market demand. However, market demand is a longing dimension, involving longest factors such as user experience and cost, so we are both optimistic and cautious about this track. **

Sun Jing: We recognize what Messari says about rise future based on two factors:

• First of all, the share of machines and equipment in global GDP has been rising throughout the development history of society. With the development of technologies such as artificial intelligence, the need for manpower is gradually decreasing. We expect this to exceed 40% in the future, which has created a huge trillion-dollar market. However, at present, there is no unified way to increase the value of the productivity formed by these machines, which leads to the locking of data value, resource value and network value, and DePIN can unlock these previously bound values to a large extent.
• Second, the size of the physical infrastructure market itself needs to be considered. We believe that DePIN represents a new type of community-driven, bottom-up resiliency model that takes a sharing economy approach to building infrastructure. Although many long countries already have centralized infrastructure, community-owned Decentralization infrastructure is needed as an alternative. For example, the current war situation in Ukraine has shown that centralized infrastructure can be easily breached. Decentralization alternative infrastructure that is difficult to control directly is extremely important for the survival of the country and even people's livelihood. For example, in the field of AI, the most powerful AI infrastructure is now in the hands of tech giants such as Microsoft and Google, who use a lot of resources to build centralized AI Computing Power systems. If there is a set of decentralization systems, whether it is models, computing power or basic chips, it is a kind of protection for longest ordinary people.

Therefore, while the DePIN segment may not be able to compete directly with state-of-the-art centralized infrastructure in the short term, its market share will gradually rise. Even 10% of all infrastructure would create a multi-trillion-dollar market. **

Q2. Mempool: We see that on the one hand, DePIN can bring some solutions to AI, and on the other hand, AI can indeed bring new narratives and needs to the DePIN track, what are your observations on this segmented vertical, and what opportunities are there in the future?

Sunny: First, we can explore the application of AI+DePIN: since the launch of ChatGPT in 2023, it has revolutionized the entire encryption technology industry. Analysis from the following aspects:

• AI technology optimizes the entire technology development process and makes the technology stack more efficient.
• As an automated and self-maintaining Internet of things network, DePIN not only improves the automation and decision-making maintenance capabilities of the network by introducing AI algorithms and large-scale models, but also enhances the intelligent identification of abnormal behaviors, so that the efficiency, automation and security of the DePIN physical network have been significantly improved.

Next, let's take a look at the role of DePIN+AI in advancing the AI space, starting from the needs of the AI technology stack:

Computing Power. **AI infrastructure requires strong computing power, and these resources are currently concentrated in the hands of a few large companies. The key requirement at this stage is to integrate these scattered computing power resources through a decentralization network, so that small and medium-sized enterprises can also access high-quality Computing Power resources. Collection and storage of data. **These can be naturally integrated into DePIN's physical network, providing AI with more distributed or even lightweight on-device storage and compute power, which is exactly what DePIN was designed for. ***Model. An effective data model requires data circulation and distributed computing power, and this is where DePIN can naturally meet the needs of AI.

Finally, we pay attention to the popularity and practicality of the application layer:

• AI can make hardware more intelligent and human-computer interaction more engaging and interactive;
• Explore how devices, algorithms, and the token economy are combined, which is a natural convergence point for AI and DePin.

Sun Jing:** AI is one of the most powerful productivity tools of human society to date, and DePIN represents a new way of infrastructure construction and economic distribution model, which complement each other. **AI can be broadly applied to DePIN's infrastructure, making DePIN networks smarter, easier to use, and more valuable, which in turn spurs stronger demand.

First of all, DePIN can serve AI at long levels, such as Computing Power, model, and data, and unleash the capabilities that AI originally did not have in a Decentralization way. For example, DePIN allows more long people to participate, putting idle resources into the AI network. We've seen long DePIN's AI Computing Power platforms that allow people to use their idle resources for Computing Power services for AI networks. In the field of Decentralization AI, while the current focus is on developing large, general-purpose AI models, the actual needs of long are actually smaller, custom models that require accurate, real-time data. The DePIN method can ingest these necessary data to solve the data requirements of this small model.

Furthermore, DePIN makes AI more open source, transparent, and secure. For the general public and even AI practitioners, security is both a box and a black box for long. Closed sources lead to opacity of issues and risks, and people can only rely on the opinions of top scientists and experts in centralized companies. But if AI becomes more open source, everyone can better understand internal problems, monitor potential risks more effectively, and brainstorm solutions.

Data on April 1 shows that in the past 24 hours alone, more than 27,200 independent transactions have occurred in just four days after the launch of the L3 chain Degen Chain, with a transaction volume of nearly $100 million, and the highest price in the day exceeded $0.06, and DEGEN has pumped more than 40 times in the past half a month. The market capitalization of the Degen project has also surpassed $1 billion in just three months, and its platform Farcaster is breaking user activity records, showing its rapid rise momentum, and the market is also sending a signal of increasing excitement for L3 networks such as DEGEN Chain.

However, while the market is excited about the L3 network, this phenomenon has caused controversy in the community. PolygonLabs CEO Marc Boiron expressed his displeasure with Layer 3 (L3) networks, saying that their existence is taking away Ethereum's value, a view echoed by HelusLabs CEO Mert Mumtaz, who argues that characterizing L3 as essentially a centralized server and positioning it as other centralized servers controlled by multisigs (L2).

With the popularity and influence of DegenChain, the L3 network narrative has stood on the stage and gained enough attention. This article will focus on Layer 3 networks, from the popularization of underlying concepts to the successful analysis of DEGEN, and then share several excellent and well-known Layer 3 projects to discuss this blue ocean full of opportunities.

The history of Blockchain network solutions

Before learning about Layer 3 networks, it is important to understand Layer 1 and Layer 2 Blockchains.

Layer 1 refers to the base layer of the Blockchain network. Some common examples of Layer 1 include Bitcoin Chain, BSC Chain, Ethereum Chain, etc. Layer 1 Blockchain networks provide the infrastructure for developing dApps, and developers can create layers for smart contracts, dApps, and other Blockchain layers for transaction settlement and validation. Another important highlight of Layer 1 Blockchain is that they are not dependent on any other network. With the mushrooming of projects on Layer 1, the network cannot bear the increasingly long amount of execution and computing brought about by the rapid development of the ecosystem short Layer 2, and has to pay high Transaction Cost to complete transactions in the congested environment of the public chain.

Layer 2 networks are a key component in the development of the Blockchain and Web3 landscape. Some common examples of Layer 2 include Arbitrum, Optimism, Polygon, and others. The basic optimization logic of Layer 2 is to strip and layer the functions of the public chain, leave the Consensus Mechanism that provides security assurance in Layer 1, decentralize computing and execution to Layer 2, and promote the public chain to become the settlement layer of Layer 2, which is easier to implement and operate than mechanisms such as cross-chain and Sharding. While maintaining the Decentralization model, Layer 2 maximizes operational efficiency, but is still insufficient in highly customized application scenarios and interoperability between protocol, which is where Layer 3 comes in.

The Layer 3 scaling solution is the next upgrade and improvement of Layer 2, and Ethereum founder Vitalik also summed it up when talking about the real-world application of Layer 3: "L2 is used for scaling, L3 is used for customizable scaling, and this customization accurately connects with the special scenarios used by users and the application direction preferred by developers." At the same time, L3 has the characteristics of weak trust extension, leaving data availability to trusted third parties or committees, further ensuring user privacy and use security." Protocols to that, Layer 2 solutions fail to facilitate communication between different protocols. Users seek interoperable protocols and cross-chain dApps that allow them to move seamlessly throughout the decentralization service environment. The use cases for Layer 3 solutions are clear, and the requirements have become imperative.

L3 Chain The Rise of DEGEN

Degen launches in January 2024 on the Degen channel on Farcaster, distributing tokens among builders, content creators, and users. It reinvents the Farcaster ecosystem, allowing Casters to tip premium content creators using DEGEN tokens. As of April 1, the DEGEN Token has 83,000 holders, more than 553,000 transactions, and is still rising rapidly.

DEGENChain is an L3 tailored for the Degen community, which can make new attempts in tipping, community rewards, payments, games, etc. The team behind it is Syndicate, which has worked with longest vendors such as Conduit, Decent and Airstack to refine the convolution, bridges, and data APIs. L3 is built with ArbitrumOrbit, Base for settlement, and ArbitrumAnyTrust for data availability, guaranteeing low cost and scalability. This effort marks a significant step forward for EVM-compatible Layer 3 solutions to expand the reach of community rewards, tips, and payouts. It is worth mentioning that DEGENChain is unique in that the DEGEN Token is also the native gas Token of the chain, making it a pioneer with its own L3 among community Tokens.

Unique Factors for the Rise:

1. Innovative Airdrop and tipping mechanism: DEGENChain incentivizes users to create and share high-quality content by introducing a unique Airdrop gameplay and allocating tips according to users' activity and engagement, while also promoting the circulation and value rise of DEGEN Token. Since January, Degen has quickly become popular in the Farcaster community through high-quality tipping activities, where community members can tip their favorite high-quality content in the form of the number of comments + DEGEN. The Airdrop quota is based on the total amount of tips received by users per quarter, so users need to post good content on Farcaster to get tips, and it is very long that active users can even reach $k per day.

2. Community-Driven Development: DEGENChain originated from the Farcaster community, and the active participation of this community provides a solid foundation for DEGENChain. Community members use DEGEN Tokens by rewarding high-quality content creators, and this interactive model greatly enhances the cohesion and activity of the community.

3. Longing application scenarios: DEGENChain is not limited to a single application, but expands the application scenarios of its tokens through cooperation with longing projects and DApps, such as Drakula, DegenCast, etc. This longing strategy makes the DEGEN Token useful across different platforms and applications, increasing its usefulness and appeal.

Decentralization Douyin Dracula on the Base on-chain was launched on 3.14, Dracula's app uses DEGEN Token as a token, and users can use DEGEN Token to buy favorite bloggers, adding scene and value to the application of DEGEN Token.

4. Angel round financing brings financial support: In February, Degen announced the completion of an angel round financing of 490.5 ETH (about $1.47 million), which will be used to develop the Degen ecosystem and community. Some of this share goes to community projects such as Drakula, which also paves the way for Degen's utility.

5. Unique market positioning: DEGEN Chain is positioned as a paradise for meme coins and experimental projects, and this unique market positioning makes it stand out in the Crypto Assets space. It not only provides a testing ground for emerging projects, but also provides investors with high-risk, high-return investment opportunities.

DEGEN Chain Ecosystem:

DEGENChain quickly stands out with its community-first approach and innovative layer-3 Blockchain technology as a vibrant, rapidly expanding platform in the Farcaster ecosystem. Within the first week of launch alone, the developers launched longest apps on DEGENChain, the most notable of which were:

• DegenSwap: DegenSwap is the leading DEX exchange on DEGENChain that facilitates the trading and exchange of various Crypto Assets and plays a vital role in the Liquidity and User Engagement of the ecosystem.
• Commemorative coin: The popularity of various Memecoins such as $CET, $DINU, $PURP, etc. has soared. These Token not only attract attention, but also encourage more long users to connect with Decan Chain and promote its active marketing activities.

DegenChain is rapidly evolving into on-chain Las Vegas, providing a sandbox for Crypto Assets developers to explore community engagement through tips, rewards, and gameplay.

Shared by well-known Layer 3 projects

1.StarkWare Appchains

It is a Layer 3 solution from StarkWare, one of the pioneers of Layer 2 solutions.

StarkWare Appchains offers a high degree of customization, and developers can choose different consensus mechanisms, data availability models, network configurations, fee mechanisms, and even issuance their own tokens to collect fees according to their needs. By using Appchains, dApps can achieve better performance and cost-effectiveness on top of Starknet. Appchains allow for optimized performance, increased throughput, and powerful custom solutions for decentralization applications. They also enable lower transaction costs and greater scale, resulting in a better user experience for users.

Related Links:

2.Nautilus Chain

It is a public chain launched by the Zebec community and is considered to be one of the latest Layer 3 system architectures in the industry. Backed by Layer 0 facilities such as Celestia and Eclipse, Nautilus Chain aims to provide parallelized, high-speed EVM Rollup scaling. Features of Nautilus Chain include a modular chain design, as well as enhanced privacy through ZK Rollup technology. The project also plans to launch a global tour to drive adoption of the Layer 3 concept and engage developers.

Related Links:

3. ArbitrumOrbit: It is a framework in the Arbitrum ecosystem that allows development teams to create and launch their own private chains, which can be Layer 2 or Layer 3 chains, and Settlement them into Arbitrum's Layer 2 chains, such as ArbitrumOne, ArbitrumNova, or ArbitrumGoerli.

Arbitrum Orbit offers unmatched customization capabilities, allowing developers to tailor their gas Token, privacy settings, permission controls, and more to the specific needs of their projects. The Orbit Chain leverages the Arbitrum Nitro technology stack, the most advanced Blockchain scaling technology available, and the Orbit Chain could benefit from future upgrades to the Nitro technology stack, including performance optimizations, permissionless verification, and Arbitrum Stylus, among others.

Related Links:

4.zkSyncHyper Chain

zkSync is a Layer 2 solution based on zk-SNARKs, and HyperChain is its proposed Layer 3 solution. zkSyncHyperChain leverages zk-SNARKs (ZKP) technology, which is an encryption method that allows one party (prover) to prove a statement to another party (validators) to be true without revealing any information about the proof process. And unlike other solutions, zkSyncHyperChain can inherit the full security of Ethereum because it uses ZK-rollups technology. This means that all transaction data is verified on the Ethereum mainchain, ensuring the same level of security as Ethereum. The goal of zkSyncHyperChain is to achieve hyper-scalability, i.e., to process an unlimited number of transactions without marginal impact on security or cost.

Related Links: 3 EC 8 AC 45896 EA 13 BC 6929 B 44 F 2 A 9 D 9 E 0712057 D 120182 3D F 5 EC 764 C 320054179

5.DappLink

This is a general-purpose Layer 3 technology solution, DappLink adopts a modular and pluggable design method, and supports different module plug-ins such as social games and Decentralized Finance. This design allows different Layer 3 modules to be launched depending on the application scenario to meet specific needs. DappLink's core technologies include cross-chain interoperable protocol, Layer 3 reverse stake protocol, and Layer 3 AppChain. cross-chain interoperability protocol support a wide ecosystem that allows assets to be transferred between different chains, while Layer 3 reverse stake protocol ensures the operation and security of the Layer3 AppChain Node network.

Related Links:

These projects are just a small part of the Layer 3 space, and there are longest others in the process of exploration and development. With the development of Blockchain technology and changes in market demand, we can foresee that more long Layer 3 projects will emerge in the future to meet the needs of different industries and application scenarios. The emergence and development of Layer 3 projects marks the progress of Blockchain technology in solving scalability, cost and security issues, and the emergence of new things is always accompanied by controversy and doubts, but it is deniable that it also further promotes the maturity and prosperity of the Web3 ecosystem.

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What is a wormhole and what importance does it have in the coin world; Check out our guide for W coin reviews, details on its future, and a review of the Wormhole project!

What is Wormhole?

Wormhole is an advanced protocol that enables the transfer of assets and information by establishing bridge between various blockchain networks. This technology takes its name from the "Wormhole", a concept in the general theory of relativity; Just like Wormholes, which create a short path between two points in space, Wormhole speeds up and streamlines the flow of data between different blockchains.

Working Principle

Wormhole uses blockchain technologies such as smart contracts and cryptocurrencies to securely transfer data from one network to another. This protocol consists mainly of two main components:

1. Bridging Mechanism: The bridging mechanism, which enables data transfer between different blockchains, ensures compatibility and integration between these networks. This increases interaction and liquidity, especially between applications on different networks.
2. Smart Contracts: Wormhole uses smart contracts to manage and verify transfer transactions. These contracts are designed to ensure the security and accuracy of transactions, helping to protect transferred assets on both ends.

The Importance of Technology

Blockchain technology has an inherent problem of incompatibility between different networks. Protocols like Wormhole remove the barriers between these networks, allowing for broader integration and collaboration. This brings with it the following benefits:

• Liquidity Increase: Increases liquidity in the markets by providing easy transfers between assets on different networks.
• **Low Costs: ** Reduces the time and costs required for operations, thus providing more economical solutions for users.
• Increased Security and Transparency: Since transactions are recorded on the blockchain, the risk of manipulation is minimized and transactions become more transparent.

The Wormhole Project and Road Map

The Wormhole project aims to address one of the biggest hurdles in blockchain technology: the incompatibility between different blockchain networks. This project aims to bring great innovation to the cryptocurrency world by facilitating the transfer of assets and information between various networks. Wormhole acts as a bridge that allows users to securely and quickly transfer their assets across different blockchains.

Project Purpose

The main purpose of Wormhole is to create a unifying bridge between blockchain networks, allowing cryptocurrencies and other digital assets to move freely and securely. This increases liquidity in the market while providing more flexibility and access for users.

Main Features

The Wormhole project has the following main features:

• Multiple Network Support: It ensures compatibility between different blockchain networks, allowing users to easily move their assets between various platforms.
• **High Security Standards: ** Uses advanced cryptography techniques and smart contracts to maximize security.
• **User-Friendly Interface: ** It offers a clear and functional user interface that is easily accessible to users of all levels.

Road Map

Wormhole's development roadmap encompasses four main phases from the start of the project:

1. Installation and Initial Integration: To complete the integration with the initial blockchain networks and provide basic functionality.
2. Expansion and Improvement: To include more blockchain networks in the system, increase transaction speed and improve user experience.
3. Advanced Security Protocols: To protect user assets from all kinds of threats by further strengthening security features.
4. **Global Expansion: ** To bring Wormhole technology to a wider audience in global markets and to diversify its usage areas. Fan tokens are examples of cryptocurrencies that are expanding globally. You can follow Coinkolik for fan token news.

Wormhole is an innovative protocol that enables the transfer of assets between blockchain networks. This protocol is designed to facilitate transitions between different blockchains, especially in the cryptocurrency markets. The primary features offered by Wormhole enable users to transact more effectively and efficiently, helping to expand the adoption of blockchain technology.

High Speed & Low Cost

Wormhole saves users time by speeding up transactions between blockchain networks. Compared to traditional banking systems or some blockchain solutions, transfers with Wormhole are much faster and less costly. This feature offers great advantages, especially for transactions that require high trading volumes.

Smart Contract Integration

Wormhole provides full integration with smart contracts. This integration facilitates automated transactions during the transfer of assets across different blockchains and the fulfillment of the terms of contracts. Smart contracts increase the security of transactions while also reducing transaction costs through automation.

Security Features

Wormhole uses a variety of security mechanisms to protect user assets. These security features include encryption techniques, two-factor authentication, and constantly audited smart contracts. These measures make the Wormhole network more resilient to potential cyberattacks and increase user trust.

User-Friendly Interface

Wormhole offers an interface that users can easily access and use. This interface allows users to make transactions quickly, track transfers, and easily make any necessary adjustments. The user-friendly interface makes it possible for even non-technical people to benefit from blockchain technology.

Multi-Blockchain Support

Wormhole works in harmony with many different blockchain networks. This multi-support allows users to freely switch between their assets located on various networks, such as Ethereum, Bitcoin, Solana, etc. This feature contributes to the adoption of Wormhole by a wide range of users.

Wormhole (W) Total Supply

Wormhole made a big splash with its coin, which was released with the abbreviation W. Wormhole, which carried out one of the airdrops that marked 2024, also managed to build a community. The total supply of W coin, on the other hand, attracted attention.

The total supply of the coin is set at 10,000,000,000 W. There are 1,800,000,000 W in circulation. According to the circulating supply, W coin's market capitalization is $1.342 billion.

Advantages of Wormhole Coin

Wormhole Coin allows users to easily switch between different blockchain networks, while also offering advantages such as high security and low transaction costs. These features provide great convenience, especially for investors who manage various crypto assets.

Uses of Wormhole Coin

Wormhole Coin can be used in many areas, such as financial transactions, smart contracts, digital identity verification, and much more. In particular, it plays a fundamental role in the exchange of cryptocurrencies and the transfer of tokens between different networks. The answer to the question of what is Token will also guide you about the working logic of Wormhole.

Wormhole Coin Price Prediction

Despite the volatility of Crypto money markets, the future of Wormhole Coin looks bright based on the platform's technological development and contributions to the crypto ecosystem. With the evolution of blockchain technology and the expansion of cryptocurrency use cases, Wormhole Coin could gain a significant foothold in the market.

Future plans for the Wormhole project include integrating new technological advancements, expanding its user base, and expanding the ecosystem by establishing strategic partnerships. In addition, it is among the goals to respond quickly to the needs of users by constantly updating technology and security measures.

W Coin Reviews

Market experts and user reviews generally positively assess Wormhole Coin's innovative approach and potential growth opportunities in the industry. However, it is important to conduct thorough market research and consider your own financial situation before investing.

Experts predicted a slow growth in W due to its unlocks and a steady increase in circulating supply. According to experts, the W coin could also make a name for itself in the future with its functionality and potential.

Recent cryptocurrency analysis shows that W coin has the potential to experience rise in the next bull cycle.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making decisions.

BEFE Coin is very quickly becoming a very promising opportunity in the world of cryptocurrency. Especially, when it comes to the meme coins, it has cemented its place in the market. According to the Crypto experts, the BEFE coin is set to achieve massive returns in the near future and investing in it now can be one of the most amazing decisions you would take right now

So, in this article, we will have a look at why the BEFE coin has so much potential and how it is it turning out to be one of the biggest meme coins of the year in such a short amount of time

Understanding the BEFE Coin

The BEFE coin stands apart from other meme coins and its aim is to become the undisputed leader of the pack. Should You Invest in the BEFE Coin?

We have to first understand the fact that the steep rise of the BEFE Coin is much more than just memes. Its zero-tax policy, fair launch and community-first approach have earned it the title “coin of the people.” Strategic marketing amplifies its appeal, while a thriving community fuels its momentum.

So, in a way, the BEFE coin has been able to do in a very short period of time what many cryptocurrencies achieve after being in existence for years. How did it do that? Simple, it puts the user at the top and develops the whole technical and utility around them

Why BEFE outperform its competitors?

While BEFE shares explosive potential with typical meme coins, it sets itself apart through a commitment to sustainable growth. Here are the key drivers behind this success:

Scarcity Tactics: Token burning creates an air exclusivity which is a strong influence on any meme coin market.

Meme Power Meets Real Utility: In addressing actual problems and attracting investors looking for long-term worth, BEFE goes beyond short term hype.

Community as Core Strength: By creating powerful network effects through active promotion from loyal communities, BEFE becomes strong through them.

Strategic Partnerships: The Bitgert alliance will improve the credibility and technical capabilities of the BEFE coin.

So, at the end**,** it would be safe to say that the BEFE Coin is a pretty high-risk, high-reward investment opportunity for the Crypto enthusiasts out there. Overall, the meme coin’s tokenomics, utility and marketing tactics have impressed many and experts even think that it is set to become the next big thing in the meme coin market. To know more about BEFE Coin, Visit

Follow Us on Google News Disclaimer: The text above is an advertorial article that is not part of Cryptonews.com editorial content.

Bitcoin’s post-halving effect on altcoins and meme coins promises many surprises for many investors. One such surprise is the Bitgert coin (BRISE). As a project, it stands out for many reasons that bitcoin can not. As a result, it’s not just a contender but a coin with the potential to replace many of the mainstream cryptocurrencies for its transactional speed and extremely low-cost fees for these transactions

In the past, Bitgert has shown a fraction of its capability by moving up more than a 10,000% profit point increase from its launch price in 2021. And now, it’s getting ready for a more explosive move due to the bitcoin post-halving momentum that might hit the crypto market in a few weeks.

Bitgert coin is promising and can deliver more than many investors currently think it would. This post explores why Bitgert might be the next big thing you’d hear about in cryptocurrency

Bitgert Coin, The Special Coin Everyone Would Love

The blockchain trilemma has been unsolvable for many popular cryptocurrencies and various attempts to solve it have either been inadequate or futile. Since Ethereum, Bitgert is the closest we’ve gotten to solving the blockchain trilemma. Bitgert offers unimaginable scalability, security, and a significant degree of decentralization by implementing a Proof-of-Authority (POA) consensus mechanism

Bitgerts offers a speed that supports about 100,000 transactions per second at near-zero transaction fees. These are exactly the solutions blockchain users are clamoring for and right now it’s only a matter of time before the news reaches everyone and Bitgert finally gets to operate at full capacity. Everyone would love Bitgert and investors should start capitalizing on all it offers.

How Bitgert Stands Out from the Herd

Bitgert offers major solutions like lesser transaction time, zero transaction fees, a reliable consensus mechanism, and a throbbing eco. All of these are catalysts and growth instruments that would propel the future value of the coin as we progress

Bitgert (BRISE) takes center stage with a compelling array of features designed to disrupt the crypto sphere. As we know, transaction speed has long been a thorn in the side of blockchain technology, especially since major tokens like Bitcoin offer a sluggish pace at ridiculously high-priced gas fees per transaction. Bitgert coin classically shatters this barrier with the amazingly little time it takes to complete transactions.

Conclusion

With Bitgert finally getting all the attention it deserves, it’s time for the coin to pump like never before and many experts think it all starts in May 2024.

To know more about Bitgert, Visit

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Original title: Upcoming Demand for Bitcoin Block Space and Its Impact on Mining Revenue by Matthew Kimmell

Translator's note: Perhaps different from all previous Halving cycles is the change in the income structure of absenteeism, which is caused by factors such as the future price shorts of BTC and the current development status of the Bitcoin ecosystem.

Image source: Generated using DALL-E 3

Key takeaways

Bitcoin Halving will reduce the main source of income for Miner. This causes Miners to invest in more efficient machines and prepare for lost production.

Money Laundering is also expected to increase significantly due to atypical use between Bitcoin Block short. These expenses are becoming a more significant part of the Mining's revenue, and may even offset the revenue contraction brought about by the Block Reward Halving.

Due to the resurgence of non-coin use cases, projects based on the Bitcoin network, such as on-chain marketplaces, collectibles, and longest platforms, there has been a recent surge in transaction demand.

These projects have also paved the way for other new revenue strategies, such as Miner Extractable Value (MEV) and transaction accelerators, which take advantage of significant changes in the Bitcoin trading market.

In the next Halving period, Money Laundering is likely to become the main source of income for Miners.

It is also very likely and plausible that the upcoming demand for transactions may rise make up for nearly half (~43%) of the Halving's impact on fee income.

Introduction

Everyone is waiting for Bitcoin Block Reward Halving to come. While long in the community are celebrating, Miner are more worried as they face a significant reduction in Mining income. So, as the story usually goes, Miners have been actively preparing for a drop in production. Install more efficient machines, reduce debt, and be optimistic (begging?) that the market price of Bitcoin will big pump.

But what if I told you that other factors in Mining revenue this time might significantly or even completely offset the Halving? And coincidentally, at the exact moment when the Halving came into effect, at the exact Block, it began to increase.

My prediction of a significant increase in fees is based on the motivations behind the changes in long Bitcoin trading. With new ways of using Bitcoin Block short, a whole new realm of users, developers, and enterprises is emerging, and their non-commodity coin use cases are bringing higher differentiation to the fee market. As we know, simple peer-to-peer electronic cash systems are taking more complex forms of settlement. It's not the first time, but it's happening at an unprecedented rate, so much so that these ancillary use cases are becoming real players in the expense market.

Users are choosing to use external software that allows them to see Bitcoin from a different perspective. One of them is like putting on a kaleidoscope of glasses, allowing users to see the supply of Bitcoin dispersed in a unique form of fragments, rather than a flowing ocean of their actual fungible units. Another example is reading a data file that can be attached to a transaction, allowing users to claim ownership of the various media tied to the hard coins they receive (think of NFTs to understand this). Also, some interpret certain normalized messages in longest transactions as the issuance or spending of external assets, observe any such transactions on the on-chain, and create ownership tracking for a completely separate system of record (think sidechains or L2, L3 based on the mainchain...). ）。

It's unconventional. This is also quite controversial. But that's not what this article is about. We will not discuss whether Bitcoin is right or wrong, good or bad. This article will focus on the lesser-discussed parts of Mining Revenue: Money Laundering, and how unusual demand vectors for Bitcoin transactions could offset lost revenue before and after the Halving.

Unusual vector of Bitcoin trading demand

Fungible Token Standard

The initial effort to introduce new assets in Bitcoin was creative but crude. The early experiments actually laid the groundwork for popular Ethereum applications (and Ethereum itself) while highlighting some of the challenges that ultimately stifled Bitcoin adoption.

Projects such as Counterparty, Colored Coins, and Mastercoin (later renamed Omni) were major innovations in the broader Crypto Assets space and led to the birth and popularity of ICOs and DEXs (DEXs), among several other pioneering technologies. However, they have failed to gain widespread adoption and acceptance in the Bitcoin community. Undesirable culture, scalability, and other technical issues, combined with the competitive environment created by the rapid rise of these use cases in the ecosystem outside of Bitcoin, long have stifled their success. The adoption of these projects never really To The Moon and even faded into obscurity.

However, demand for external assets has risen again. New ventures have not solved the challenges that have hindered the development of projects in the past, but today's market timing makes a difference. Today, awareness of Bitcoin has become much more popular, venture capital is longer, and, as silly as it may sound, the meme coin speculation boom is undoubtedly a significant contributor to this trend.

Whatever the reason, or whether it's sustainable or not, we're seeing a number of new Bitcoin Token projects that bring significant rise in transactional demand. BRC-20 assets, for example, have spent more than $180 million (4.8k BTC) in fees for issuance and transfers since their launch in March 2023. These transactions account for nearly one-third (30%) of all Bitcoin transactions and account for 17% of the total fees incurred on the Bitcoin network since launch.

This is especially relevant to the fee market at the time of Halving, as a new standard called Runes is being introduced, with clear upfront demand and rising concern.

The demand for future Runes Tokens has a market capitalization of more than $1.2 billion, which is already half of all BRC-20 assets, and the market has only been open since around November. Note that the issuance of Runes Tokens must be traded in Bitcoin, and when the BRC-20 asset is first issued, the fee level soars to over $16 per transaction and over 300 BTC per day.

The potential impact is that when the Runes Token is released, there will be a large amount of transaction demand on Bitcoin for the issuance of external assets that happen to be at the same block height as the Halving. At the same time, other standards will not be abandoned with the launch of Runes, and updates to BRC-20, Taproot Assets and RGB are still in progress.

If these transaction demands were similar to when BRC-20 was first released, the fees would likely reach 150 Bitcoin per day, which would offset a full third of the Mining revenue reduction due to the Halving.

However, Runes won't be the only catalyst to build trading demand.

Collectibles

Ordinals protocol unveiled a method for users to voluntarily agree to a tracking system for tracking the smallest unit of Bitcoin, called Satoshi (equal to 0.00000001 or 10^-8 btc). Protocol to the Ordinals protocol, each unit is given an ordered number. By employing such a standard, each segment of Bitcoin is marked and identified along a continuous line of numbers, from the first minted Satoshi all the way to the last minted Satoshi. In other words, when Bitcoin units are viewed in this way, each Satoshi becomes a separate non-fungible unit.

By opting in, users also have the option to embed additional uniqueness for their recognizable Satoshi by attaching arbitrary data files to any cell. These documents are called inscriptions. Users can mix inscriptions with any Satoshi they own, while retaining the ability to transmit and store such modified Satoshi on the Bitcoin network, similar to regular BTC.

As a result, tiny long Bitcoin units are now designated as images, text, or even full video game files, making them uniquely different from each other and providing investors with a reason to value otherwise fungible Bitcoin units in a different way.

Due to the numerical significance or related inscriptions, certain Satoshi's collectible value has been verified by the open market.

To the best of our knowledge, the highest auction price for a Satoshi to date is $240,000, and its inscription is called "Genesis Cat" and is hailed as a culturally and politically significant 1/1 artwork that is part of a series of similar inscription designed to symbolize and support the restoration of previously removed functions in the Bitcoin protocol. Another Satoshi, without an inscription attached, sold for $165, 100 and is advertised as a rare supply unit because its provenance dates back to Bitcoin's first difficulty period.

The evidence of these sales is encouraging for those who are looking for an expensive Satoshi. The purpose of changing Bitcoin units on Secondary Market at a selling price well above their usual market price is to change the propensity of some users to pay Money Laundering. It's safe to say that the purchasing power of collecting one Satoshi can be in the hundreds of thousands of dollars, making fee bids longer higher than longest peer-to-peer transactions.

Given that Halving is a completely predictable and scarce event in Bitcoin history, there is bound to be competition in collecting Satoshi and inscribed inscription of the first Block. The demand for the Satoshi of the first minting is expected to be so valuable after Halving that Foundry USA Mining Pool even plans to share the proceeds with Miner if they are lucky enough to win the Block. It may be short-lived, but this stiff competition will almost certainly lead to a spike in fees.

Shielded transactions

Another possibility for atypical needs is trading accelerators. Marathon launched a product called Slipstream in late February, which opens a way to circumvent Bitcoin's memory pool (native transaction waiting room) by giving users the option to communicate and pay transactions directly with the MARA Pool. Compared to other mining pools, this product does not offer a sustainable advantage in earning fees, but there are still several successful examples.

Although accelerators such as Slipstream are not widely popular, they have the potential to raise fees in an indirect way as long as there is enough demand. If the transaction is submitted directly to the mining pool, it will not be known to any other Bitcoin user in advance. As a result, users may discover that their transactions, the next one to be processed, must actually continue to wait, as those submitted directly to the pool are secretly included. This can confuse consumers as to whether there should be longest or less precise processing fees to encourage timely processing of transactions. With enough transactions flowing to these accelerators, there is a long side market for fees, one that is public as part of the Bitcoin protocol and the other is private.

In the event of extreme urgency, users may choose to pay far more than the open market actually anticipates. This confusing fee market can lead to increased fees. We don't really see this happening on any meaningful scale, but it's certainly worth paying attention to.

Miner Extractable Value (MEV)

MEV is another emerging dimension of Bitcoin Block short demand. MEV refers to situations where Miners have the opportunity to earn additional profits by manipulating the order of transactions within a Block. Previously, MEV was primarily a latent feature of Bitcoin that was often limited due to its more restrictive nature and simpler transaction model. However, due to changes in the Bitcoin software, as well as changes in the way some users make Bitcoin transactions, the possible vectors of MEV will become more apparent, as we mentioned in this article. Here's a quick rundown:

• Collectibles: Certain inscriptions and Satoshi's high-value tags, as well as the inefficiencies of market technology, lead to additional fees obtained by buying or "sniping" and reselling mispriced market items, as well as sacrificing fees in pursuit of higher value Satoshi
• **tokenization Assets (Runes, BRC-20, RBG, Taproot Assets, and possibly others) **: The above protocol provide fungible assets, opening the door for Miner to participate in front-loading and Arbitrage trading for additional rewards.
• Bitcoin plugins: With the rise of increasingly long external platforms, or so-called "Layer 2", and the use of Bitcoin to Settlement value, Miner may be able to exploit vulnerabilities in earlier designs and additional incentives to generate higher revenue.

Another Halving means another reduction in the Block Reward and a relative increase in the importance of Money Laundering for Miners. This is likely to provide additional incentives for miners to drive the benefits associated with trading choices and seek longer ways to earn money. As mercenaries in a highly competitive industry, we believe that the MEV strategy will at least be tried.

The transaction fee market is becoming more and more closely related to Miners

Longest demand for Bitcoin transactions could play a redemptive role in the mining economy. As Halving events reduce Block Reward, these new uses in Bitcoin Block short can significantly increase Money Laundering. This is crucial for Miners, as these fees offset the loss of the Block Reward and maintain its profitability.

As mentioned earlier, the recent increase in fees will be driven by increased competition in new segments, including the issuance of external assets and the search for unique collectibles. Not only do these apps introduce additional Money Laundering, but they may also encourage a more strategic approach to transaction processing.

Ultimately, the shift to a more complex and Money Laundering-dependent economic model highlights the importance of understanding and leveraging new demand vectors to remain competitive.

Looking ahead, the current level of Money Laundering is expected to account for around 14% of Mining revenue after the Halving, a figure that is already several times that of the past few years. However, I expect this percentage to get even higher, well over 50% in some blocks. Looking back at the two-month period at the end of 2023, this was mainly driven by the high demand for inscriptions, with the average fee level accounting for 30% of the mining revenue after the Halving. If you just repeat this average (193 BTC per day), you will be able to cover 43% of the impact of the Halving.

Given the current trajectory, it makes perfect sense that Money Laundering could become the main source of income for Miners during this Halving period. However, the sustainability of these non-coin demand drivers remains an open question, whether they lead a long-term shift in the Bitcoin trading market, or are they just a short-lived symptom of a Bull Market?

In the last 24 hours, when Bitcoin and Ether revived the cryptocurrency market, the prominent category of the day was memecoin.

Bitcoin (BTC) signaled a recovery after a long time. leader cryptocurrency had recently experienced a fall of up to $57,000. The BTC, which exceeded $ 64,000 during the day, was also a lifeline for altcoin. Ether (ETH), in particular, has become a major inflow of money into altcoin.

In the altcoin s, which turned positive and increased the buying appetite, the prominent category of the day was the memecoin. Memecoins have been the fastest recovering cryptocurrencies.

The memecoin that marked the day was dogwifhat (WIF).

Crypto the memecoin frenzy in the money market is back. With Bitcoin (BTC) experiencing a rise of more than 8 percent in the last 24 hours, the stage went to memecoin. Many memecoin marked the day with their sharp rises.

Experts in the Crypto industry argue that memecoin are an important factor that provides cash flow to the market. Crypto investors are shifting to memecoin due to the excitement created by the high return and high-risk environment. The cash that slips here somehow gains a foothold in the crypto industry.

Dogecoin (DOGE) has increased by 20 percent in the last 24 hours, Pepe (PEPE) by 16.97 percent in the last 24 hours, Floki (FLOKI) by 22.32 percent in the last 24 hours and Shiba (SHIB) by 11.67 in the last 24 hours.

Brett (BRETT), the most popular memecoin of the Base network, attracted attention with an increase of 28.16 percent. The list of the most rising memecoin included memecoin from the Solana, Ethereum and Base network.

In the coming days, memecoin are expected to bring more cash flow to the sector. It is suggested that there will be an increase in volume, especially in DOGE, SHIB, FLOKI and PEPE.

It is worth remembering that memecoins are the area that loses the most blood in the fall scenario and recovers the fastest in the rise scenario.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making decisions.

By Tracer, encryption KOL

Compilation: Felix, PANews

How do market makers "manipulate" the market and benefit from it? What are the benefits for traders to keep an eye on market makers? Encryption KOL Tracer said he made more than $130,000 last month by following market makers. Understanding market psychology and not being manipulated by market makers is crucial in the current market.

Usually the behavior of market makers causes large Tokens to Fluctuation. Learn to understand the actions of market makers, and you can get more longing returns. Here's what Tracer shared about the "manipulation" of market makers.

A market maker is a company that enhances the liquidity and depth of the market, and its main task is to create demand and supply. Market makers own a large number of tokens, and they can "manipulate" the market to profit from price differences. Among all market makers, there are generally two types:

• Acting as a market maker for project advisors
• Traditional market makers

The end result is the same for both types, but the tasks are slightly different.

The market maker acting as the project consultant fully assists in the project initiation. With the help of market makers, the project has been successful in several key ways:

• Robust tokenomics and TGE construction
• Successful Token Listing
• Raising funds from IMFs

Traditional market makers never participate in low-market capitalization projects and do not handle a series of tasks:

• Support market liquidity
• Bridging the gap between supply and demand
• Promote efficient transactions

The sharp falls in the market are the "masterpieces" of these market makers.

Partnerships are one of the most popular ways to "manipulate". The recent collaboration between iMe Smart Platform, a messaging intelligence platform, and DWF Labs has significantly boosted the project's Token price. LIME Token short term pulled up 30%, and the pump is also good for the market makers themselves.

All market makers' strategies depend on market sentiment and trends.

During the Bull Market, the main task of market makers is to trigger fear of missing out) (FOMO) among encryption enthusiasts and get them to buy Tokens. Longest unsuspecting users fall victim to these manipulations.

During a Bear Market, market makers' strategies change completely. Their task now is to instill fear in you by making you sell your Tokens and lock in the profits of their positions. The market maker buys at this time and will generate profits in the future.

If you observe a Token movement accompanied by a continuous Pump and Dump shipment, then make sure that there are market makers involved. Be cautious about these Tokens and try to understand the behavior of market makers. If you can do it, you can make a profit.

There are longest market makers in the market, and here are three of the most influential:

• Amber Group
• DWF Labs
• GSR

You need to keep an eye on these market makers to understand their movements and their impact on the market.

Amber Group is a well-known market maker trusted by leading institutional retail investors with a large and highly qualified team. In addition, the market maker recently partnered with Pendle.

DWF Labs has integrated with long 60 leading exchange to provide 24-hour service to exchange volume needs.

GSR is a market maker with more than 10 years of experience. GSR provides Depth Liquidity and personalized services for encryption projects. GSR builds reliable long-term relationships with token issuance providers.

Related reading: 10,000-word bottom-up encryption market maker: a hermit who drives market prosperity and crosses the bull and bear cycle

Original | Odaily

Author | Azuma

On May 2nd, cross-chain interop protocol LayerZero officially announced the completion of the first Snapshot (Snapshot #1) and will announce an update on long.

As one of the most anticipated potential Airdrop projects in the community, LayerZero's brief official announcement was also interpreted by the community as "Airdrop Snapshot has been completed, and the big one is really coming".

On May 3, Layer Zero officially announced an important announcement that night to "show continued trust in community members", but while the community speculated whether LayerZero was about to announce detailed airdrop rules, LayerZero's final announcement was like a punch to all users - ** Tokens are indeed going to be issued, but longest rounds of witch screening activities need to be carried out first. **

Airdrop background: Six million users

According to the official documentation, one of the key factors that LayerZero needs to consider when developing a Token allocation plan is how to identify the best quality user clusters. In LayerZero's view, the best users are those who are the most "persistent",** and "persistent" is defined as those who are most likely to continue using LayerZero in the future or continue with their past usage habits. **

On the evening of May 2, LayerZero co-founder Bryan Pellegrino replied to the community on X that the total actual user size of the protocol is about 5.8 million Addresses Protocol for all the networks covered by LayerZero; ** Last night's official announcement revealed that LayerZero's current total user size is nearly 6 million Addresses. **

Combined with past Airdrop cases in the industry, millions of Addresses are already considered to be super-large, so for LayerZero, it is necessary to reduce the scope of Airdrop through mechanism design or witch screening, so that Token has been distributed to potential users in a way that is more in line with the project's expectations.

Witch Judgment Rules

In the official information released by LayerZero, there is no specific screening details for the time being (probably to prevent witches from self-examining, which will affect the effect of the "self-exposure" stage mentioned below), but by listing a few interactions that may be considered witches, Bryan also gave some supplementary explanations on personal X for some cases.

In short, interactions that can cause an Address to be judged as a Witch include:

• As a single person or entity using dozens, hundreds, or k of addresses for bulk interactions;
• In order to carry out cross-chain transfer of NFTs between different chains, to minting a "worthless" NFT;
• Have used popular "witch farming" apps such as Merkly, L2 Pass, L2 Marathon, etc.;
• In order to keep a record of the interaction on longest networks, a very small amount (e.g. $0.01) is transferred back and forth between different chains;
• If you consider yourself a witch, then you are most likely a witch.

Long wick candle about the use of tools such as Merkly, some users questioned that this could lead to large-scale "manslaughter", and Bryan replied: "If you are a real user and have used Merkly for the purpose of reducing gas, then you may not be judged a witch, but if you are just using Merkly to transfer assets back and forth, then you may be a witch." ”

Witch Screening Rounds

According to LayerZero's official disclosure, the witch purge will be divided into three rounds.

The first round is the "self-exposure" phase, which will last for 14 days, and users who believe they are suspected of being witches can "self-expose" through the window provided by LayerZero in this stage to retain 15% of the airdrop allocation. **

It is worth mentioning that in order to facilitate the studio's "self-disclosure", LayerZero also "intimately" provides API tools for large-scale submission of addresses.

The second phase is the "trial" phase, in which LayerZero officials will conduct witch screening according to specific rules, and the results of the screening will be announced on May 18, ** Addresses found in this phase will not receive any airdrop allocation. **

The third phase is the "mutual bite" phase, which will last from May 18 to May 31, LayerZero encourages community users to report witch behavior to each other, and successful whistleblowers can receive a 10% Airdrop share distribution of the reported Address. **

The biggest witch purge in history?

Protocol to LayerZero's disclosed schedule, the protocol's governance token is likely to be officially issued after the end of the "mutual bite" phase on May 31, so the expected coin issuance date should be in June. **

For users who are looking forward to the LayerZero Airdrop, they need to survive a full month of witch purge before receiving the final reward. Considering the sheer size of LayerZero's own users, coupled with the reusability of the Witch tag across different projects, LayerZero may be launching more than just the largest witch purge in history, and its screening results may have a profound impact on potential Airdrops for other projects in the future. **

Recent fluctuations in the price of Bitcoin have created a "buy the dip" opportunity for whales (large investors). Over the past 24 hours, whales have accumulated a significant amount of Bitcoin of 47,000 BTC (about $2.8 billion). This, according to CryptoQuant CEO Ki Young Ju, marks the "beginning of a new era" for Bitcoin.

Increased confidence of whales and buying strategies

The fact that whales are accumulating BTC indicates growing confidence in the future of Bitcoin among institutional investors and high-net-worth individuals. Ju, the founder of CryptoQuant, explains that these accumulations are mostly in "custodial" wallets containing ETF, but the recent increase is not directly related to ETF. To learn more about whales' buying strategies, it is necessary to pay attention to two important points:

• Long-term whales: A week ago, long term Bitcoin whales appeared to have experienced a significant increase in their actual profits, with the price remaining above $60,000. Although these whales increased their profits, they did not sell their positions, which shows their long term attitude and faith in Bitcoin.
• Big whale investment: According to breaking news, a whale known as "Mr. 100" bought more than BTC 4,100 Bitcoin at the $58,000 level on May 2. This is the whale's first Bitcoin buying since April 19 and is interpreted as an important signal ahead of the 2024 Bitcoin halving.

#Bitcoin whales accumulated 47K $BTC in the past 24 hours. We're entering a new era. pic.twitter.com/SXgzToN8GU

— Ki Young Ju (@ki_young_ju) May 3, 2024

Huge investment in BlackRock Spot Bitcoin ETF

Hong Kong-based investment advisory firm Yong Rong HK Asset Management has become the largest investor, investing $38 million in IBIT, BlackRock's spot Bitcoin exchange mutual fund (ETF). This investment was a remarkable move, enabling Yong Rong to acquire more than 12% of the reported assets in IBIT. Commenting on this investment, Bloomberg analyst Eric Balchunas explains the Hong Kong-based company's decision to focus on US-based ETF rather than its spot Bitcoin ETF in its home country on the grounds of "cheaper and higher volume".

The interest of whales and institutional investors in Bitcoin can significantly impact the cryptocurrency's price and overall market perception. Recent developments show that belief in Bitcoin's long term potential and adoption by institutional investors is increasing. It's important to note that the price of Bitcoin can still fluctuate, and it's important to do detailed research before investing. Investments by whales and institutional investors do not always guarantee profits. It is important for investors to do their own research, assess the risks and determine their investment strategies accordingly.

New high water more bitcoin ETF holders just rolled in: Yong Rong Asset Management based in HK bought $38m worth of $IBIT, which makes up 12% of its reported holdings. Interesting given HK has its own ETFs now. But US ETFs have that irresistable combo of low fee and high volume. pic.twitter.com/FE2gyuIuIf

— Eric Balchunas (@EricBalchunas) May 3, 2024

As Kriptokoin.com reported, recent whale movements and massive investment from BlackRock show that interest and adoption of Bitcoin is on the rise. This can be interpreted as a promising sign of Bitcoin's long term potential. However, it is important for investors to do their own research and assess the risks before making any investment decisions.

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With the leader cryptocurrency Bitcoin (BTC) experiencing a rise of more than 8% in the last 24 hours, there was a positive outlook in the altcoin.

On May 3, the last trading day of the week, spot Bitcoin ETF data whetted appetite. Grayscale, which has witnessed net money outflows since the launch, made a net money inflow for the first time the other day. GBTC's positive reading has been a driving force for the cryptocurrency market.

Bitcoin (BTC) has revived altcoin, experiencing rise of more than 8 percent in the last 24 hours. Many altcoin have seen sharp rises and resistance tests.

With investors getting excited and the bulls back in the ring, all eyes are on the performance of the altcoin. So, which altcoin came out on top with their rises in the last 24 hours?

##1- Nervos Network (CKB)

Nervos Network (CKB), a layer-1 project that serves with the Proof of Work (PoW) mechanism and tries to create a proof-of-work blockchain, was the most rising altcoin of the day. CKB has rise over 20 percent in the last 24 hours.

According to data from CoinMarketCap, the CKB coin achieved a trading volume of $90.3 million in the last 24 hours. CKB coin has a market capitalization of $832 million.

##2- dogwifhat (WIF)

The popular memecoin dogwifhat (WIF) in the Solana ecosystem was among the altcoin that marked the day. WIF, which attracts attention with its community, has increased by 19.88 percent in the last 24 hours.

According to data from CoinMarketCap, WIF coin has achieved a trading volume of $557 million in the last 24 hours. WIF coin has a market capitalization of $3.31 billion.

##3- Floki (FLOKI)

Another memecoin that marked the day like Solana memecoin dogwifhat (WIF) was Floki (FLOKI). FLOKI, one of the most popular memecoin, hosted an increase of 16.32 percent in the last 24 hours.

According to data from CoinMarketCap, FLOKI has achieved a trading volume of $294 million in the last 24 hours. FLOKI has a market capitalization of $1.84 billion.

##4- Stacks (STX)

Stacks (STX), which focuses on the Bitcoin ecosystem and enables the creation of smart contracts on the Bitcoin network, was the fourth highest rising altcoin of the day. STX experienced a rise of 16.85 percent in the last 24 hours.

5- Dogecoin (DOGE)

Dogecoin (DOGE), known as the king of memecoins and the name that dominated the crypto market for a while, became the fifth most rising altcoin of the day. leader memecoin experienced a 12 percent rise in the last 24 hours.

According to data from CoinMarketCap, the DOGE coin generated $1.462 billion in trading volume in the last 24 hours. DOGE coin has a market capitalization of $21.85 billion.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making decisions.