Author's Note:init4 is a research team dedicated to the development of next-generation Ethereum tools. This is a research note, not a disclosure document. While we will discuss the subtle differences and shortcomings in the security models of deployed and proposed systems, describing these as "vulnerabilities" or "previously unknown" is inaccurate.

Resistance to censorship remains one of the core values of Cryptocurrency, especially Ethereum. We believe that the benefits of on-chain transactions should be open to all, and the rules of the chain should apply equally to all users and use cases. Values are the driving force behind the development of this field. The task of engineering is to compare these values with reality, and to discover where and how they fail.

Dominoes also have sequences :) The picture is provided by Tom Wilson, from Unsplash

Definition Review

We usually define censorship as the intentional blocking of transactions from appearing in the standard ordering (i.e., transaction exclusion). When ordering is entirely dependent on the economic outcomes of the ordering system, we consider the ordering to be fair or neutral; whereas when ordering depends on other information, we consider the ordering to be unfair or censored. For example, it is acceptable to refuse to include low-fee transactions when creating a Block, but it is unacceptable to refuse to include a transaction because it is sent by specific individuals. Therefore, we say that a transaction is censored when its inclusion depends on non-economic information. If a transaction brings more observable profit to the ordering system than any already included transactions, but the transaction itself is not included, then the transaction is considered to be censored. This definition has led to research on censorship-resistant mandatory inclusion mechanisms. If users can force the inclusion of their transactions, then according to this definition, the transaction cannot be censored.

Mandatory Inclusion Mechanism

One of the core security objectives of the OP Stack chain is that the sequencer should not be able to prevent users from submitting transactions to the L2 chain.

• Optimism

Modern Rollups typically have centralized ordering. This means that audits of the sorter become very easy since they can choose not to include any transactions from specific users. To mitigate this issue, several Rollups, including [Optimism]Arbitrum and (https://docs.arbitrum.io/how-arbitrum-works/sequencer#the-core-inbox), adopts the mechanism of forced inclusion. These mechanisms allow users to ensure that their transactions will be executed by Rollup after a certain time delay, regardless of the behavior of the sequencer. Forced inclusion is implemented through contracts deployed on L1. Therefore, in theory, transactions with forced inclusion have the same anti-censorship properties as other Ethereum transactions.

Forced inclusion specifies a subrange that must be preserved in any valid order. Taking EIP-7547 as an example, a mechanism for forced inclusion has been proposed for Ethereum. The inclusion list will allow Block proposers to partially specify the content of the next Block. This will effectively alleviate the review problem assuming that the review motivation of Block proposers is lower than that of Block builders.

Generally speaking, the mandatory inclusion mechanism sets new constraints for effective sorting. According to the protocol rules 1, it renders a wide range of sorting categories invalid. Mandatory inclusion should be considered as allowing users to specify a subset of future sorting. All valid sorts must be extended on the basis of the forced subset.

Expand Our Review Model

Unfortunately, trade confirmation is just a means, not an end. Our review model is incomplete!

Review must be defined based on objectives. Users want to send Tokens, purchase Non-fungible Tokens, borrow funds, etc. Transaction confirmations are just a byproduct of achieving these objectives2. Reviewers also have specific goals. These goals may be to prevent a Hacker from successfully transacting, comply with certain laws, or disrupt competitors' businesses. To respect both parties' intentions, we need to redefine review.

Considering this, we should expand the definition of censorship: if a third party can prevent a transaction from achieving its goal, then that transaction is censored. In other words, the censor does not need to prevent the confirmation of the transaction; they only need to make the Smart Contract execution rollback. Making the EVM transaction rollback is censorship of that transaction, even though it belongs to the standard chain. Ignoring the threat model of transaction content cannot accurately simulate censorship, and therefore cannot effectively protect users from censorship.

From a semi-formal point of view, for each on-chain interaction, we use a scoring predicate f to evaluate the ranking result, and generate 0 (target not achieved) or 1 (target achieved). In this model, the evaluator's scoring function is actually the opposite value of f': f' = !f. That is, when the user does not achieve the goal, the evaluator achieves their goal. 3

Although a user's intentions may be hidden, the transactions themselves almost always contain enough information to infer them. Uniswap transactions have clear intentions. Furthermore, because the blockchain is deterministic, auditors can perfectly predict which orders will satisfy the auditors' predicates. Therefore, users cannot rely on hidden information to protect themselves from scrutiny in the EVM model. Transaction details must be public, meaning the information about the user's intentions is public.

For simplicity, let's assume that we are working in a standard pre-sorter model4. We will handle the forced inclusion of sorter rotations later on. In this model, sorters have complete control over the sorting and can perfectly simulate any outcome. In other words, they can choose from all possible sorts. Therefore, we ask the question informally about the review: 'Is there an effective sort that results in a f evaluation of 0?' If such a sort exists, the sorter can choose it.

From here, we can extend the model to consider mandatory inclusions. "Is there an effective ordering that contains the user's sub-ordering, so that the evaluation result of f is 0?" If such an ordering exists, the sorter can choose it. Mandatory inclusion does not prevent the sorter from controlling the ordering, it just constrains their behavior. Unfortunately, mandatory inclusion has some fundamental issues that make it an ineffective review resistance mechanism in many transactions.

Handover Issues

The mandatory inclusion mechanism means that sorting occurs in one of two modes: non-mandatory or mandatory. There is a defined point at which sorting transitions from non-mandatory to mandatory (and vice versa). This point is the juncture. The juncture presents thorny problems for the design of the mandatory inclusion mechanism.

The transition from non-mandatory inclusion to mandatory inclusion must be made. During the hand-off, the mandatory transaction is executed in that state. Therefore, state contention [SUP][5][/SUP] problem arises again. When the hand-off occurs within a transaction batch (such as Block), the creator of the batch can control the state at the time of hand-off. If the mandatory included transaction reads any public state, then the batch creator can modify this state before and after the execution of the mandatory transaction. State contention is sufficient to cause review.

Because batch creators can control the state of the handover, they can influence the outcome of forced transactions. If they can influence the outcome, they can potentially affect the outcome of the scoring predicate. For example, consider a simple AMM interaction. The user sets a minimum acceptable price, but the batch creator can ensure that the market price at the handover point is lower than this minimum acceptable price. This will cause the user's transaction to be rolled back, effectively subjecting the user to scrutiny. [SUP]67[/SUP]

It is worth noting that scrutiny through state contention is more effective than scrutiny through exclusion. Excluded transactions can be included in future Blocks. On the other hand, scrutinized transactions through contention are permanently invalidated. It is already included on-chain and can never be included again. This transaction will never achieve the user's goal. To retry, the user must recreate and resubmit the transaction (which may be scrutinized again).

In the actual system

Any user can completely bypass the sequencer and submit any Arbitrum transaction directly from L1 (for example, initiate an L2 to L1 message to withdraw funds). Therefore, this mechanism can maintain censorship resistance even if the sequencer is completely unresponsive or even malicious.

• Arbitrum

In the early sorting model, the sorter has almost perfect control over the handover position, and the cost of payment is reduced (because they do not need to pay a fee and can exercise some control over the basefee of EIP-1559). Therefore, the sorter is in a privileged position to review user operations using state contention, which is very simple. The handover issue ensures that the sorter can review a large number of transaction categories.

For EIP-7547, builders choose the location in the Block where the handoff occurs. Therefore, builders can select the specific location of the handoff within the Block. This means they can freely choose the prefix and suffix, as long as they adhere to the BlockGas rules. The prefix can place the chain in a state where a transaction will roll back, while the suffix will restore the chain to its normal state. The inclusion list of EIP-7547 is not sufficient to prevent any disputed access transactions from being reviewed. The handoff problem prevents the inclusion list from ensuring transaction execution in most cases.

For most blockchain, forced inclusion does not effectively protect users from censorship, as it ensures that censors have enough control even if they do not have enough ordering freedom. This problem affects AMMs, lending markets, auctions, and most other Decentralized Finance actions. Even if you can ensure the inclusion of transactions, many important actions may still be subject to censorship. State contention imposes strict limits on the effectiveness of forced inclusion as a censorship resistance mechanism.

Case Study

To understand the far-reaching impact of this, consider a user lending USDC in the lending market on Optimism. When the user wants to withdraw USDC from the market, they submit an Optimism transaction, but the sequencer reviews it. They then use the official force inclusion mechanism to queue the transaction to the Ethereum blockchain, bypassing the sequencer.

The sorter can see the transactions in this queue and choose to execute sandwich trading on them. To review this transaction, the sorter immediately borrows all available USDC from the market before the forced transaction. Due to the lack of Liquidity in the market, the forced transaction will roll back. Then, the sorter can immediately repay USDC.

Sorters or builders can control the state of handover. This requires the sorter to have enough Collateral to borrow USDC, but the actual cost of borrowing is very low.10In addition, Collateral is reusable in all review operations, as borrowing will not remain open. Therefore, users of AAVE or Compound on Optimism (or Arbitrum or other centralized rollup) cannot guarantee their ability to redeem Collateral. Sorters can review withdrawals from any lending market at any time. Mandatory inclusion fundamentally does not protect users from reviews.

Follow-up work

We have several follow-up research directions.

First, EIP-7547 can be easily improved by requiring IL transactions to be processed at the end of the next Block. In the context of PBS auctions, review is MEV. Builders derive some non-economic value from it, which must be subjectively valued in ETH. Therefore, the builder's review causes its Block bidding to increase. This also extends to searchers, who may make review bundles. Part of the economic value of the review is then captured by the proposer, providing an incentive for review tolerance even in the absence of direct participation in review. Forcing included transactions to the end of the Block can eliminate the builder's ability to easily sandwich IL transactions and increase the economic cost of controversial reviews. For example, review of AMM interactions through state contention may require giving up some AMM Arbitrage, or may require high costs to expand the market, which cannot be compensated by closing the sandwich layer. In addition, this would limit the number of review bundles generated by searchers (not builders) per Block.12 We suggest executing at the top of the Block, as prefixes are more important than suffixes. However, this would significantly increase the cost of IL transactions, as it allows for the extraction of MEV by forcing inclusion at the top of the Block.13 The small improvement is to cancel the reviewer's atomic right to attach IL transactions.

Secondly, the reason for the handover issue is that the reviewer can foresee and control the input state through transaction simulation. Many MEV resistance mechanisms introduce hidden information to eliminate the reviewer's ability to infer user goals and simulation results. Typically, these mechanisms are 'commit-reveal' schemes, where some transaction information is only revealed after the ordering occurs. The separation and concealment of ordering execution information seems promising, but it is largely incompatible with MEV Supply Chain, Ethereum Consensus process, and the rollup model of ordering. A method to some extent eliminate the ability of paper trading will address the review and a large category of MEV, but it will be highly invasive for protocols, protocol operators, applications, and end users.

Third, there is an interesting 'order-agnostic' scoring function. These are targets that cannot be reviewed by state contention, either because they do not access contentious states or because the contentious states they access have enough constraints to make them 'reliable' in a sense. Order-agnostic operations include sending ETH to EOA, most ERC-20 transfers [14], and some Decentralized Finance interactions such as adding Collateral to the market. These operations are protected from review through contention. There are also interesting correspondences between these targets and secure Cross-Chain Interaction communication and MEV resistance, which are worth further research. Applications and protocols can be designed to include only order-agnostic operations in certain cases, but further research is needed.

Conclusion

The rich state allows malicious actors to censor it while still containing transactions. The handover problem is a fundamental issue with the forced inclusion mechanism and can only be mitigated. In a centralized sorting rollup, mitigation is not possible. Forced inclusion cannot solve the censorship problem when there is a disputed state. Even with forced inclusion, a large number of economically significant transactions can be censored. The handover problem is common in modern rollups and also exists in the censorship resistance EIP of ETH. Therefore, although forced inclusion is beneficial, it is never sufficient to provide censorship resistance for rich state chains. Rollups do not 'inherit' the security attributes of ETH, and it is foolish to think they would. It is obvious that censorship resistance is a special case of resisting MEV when you no longer excessively follow inclusion.

Thank you very much Mike Neuder, Tarun Chitra, and Brandon Curtis for reviewing this work and providing feedback.

(https://blog.init4.technology/p/the-hand-off-problem#footnote-anchor-1-148199411)[1]

As is common practice, for the L1 protocol, it is usually achieved by rejecting invalid Blocks, while in rollup, it is achieved by transforming invalid sequences into valid sequences through some kind of filtering function.

(https://blog.init4.technology/p/the-hand-off-problem#footnote-anchor-2-148199411)[2]

This is not a discussion about intention, and the world does not need more of this kind of discussion at the moment.

(https://blog.init4.technology/p/the-hand-off-problem#footnote-anchor-3-148199411)[3]

This is obviously an incomplete model as it does not take into account the subjective value of the outcome. For example, if the review fails, the reviewer may lose any amount (e.g., because they might be arrested by the French police if they fail to review certain actions). On the other hand, if the user fails to achieve the goal within a specific period of time, they may win or lose all the amount (e.g., they have borrowed over $100 million worth of loans with their own Tokens and need to re-collateralize before liquidation).

(https://blog.init4.technology/p/the-hand-off-problem#footnote-anchor-4-148199411)[4]

This is in contrast to the "based on" sequencer model. In most modern rollups, the sequencer "runs ahead" of Ethereum as it provides inclusion and execution proofs before transactions are submitted to Ethereum. In this model, the sequencer has full control over the sequence and the transaction results must be independent of Ethereum's reordering.

(https://blog.init4.technology/p/the-hand-off-problem#footnote-anchor-5-148199411)[5]

When multiple users wish to access the same contract, asset, or state, their transactions will compete with each other and may interfere with each other's results. Contention may occur accidentally or intentionally. This is a thorny issue of state in blockchain systems. Public access to shared state is the root of MEV, scalability issues, and the decline of modern social civilization.

(https://blog.init4.technology/p/the-hand-off-problem#footnote-anchor-6-148199411)[6]

In general, you should consider the review conducted through state contention as a special case of MEV. Since the extracted value is off-chain and unobservable, and it can be very large, it is difficult to predict when state contention review will occur.

(https://blog.init4.technology/p/the-hand-off-problem#footnote-anchor-7-148199411)[7]

In our 2017 article "Miners aren't your fren", we specifically discussed how to use state contention to cancel transactions. The term "MEV" was not yet in use at that time.

(https://blog.init4.technology/p/the-hand-off-problem#footnote-anchor-8-148199411)[8]

As we all know, PBS has made anti-censorship extremely complex. Please refer to VB's research notes.

(https://blog.init4.technology/p/the-hand-off-problem#footnote-anchor-9-148199411)[9]

Adding a prefix and suffix in a transaction is commonly referred to as 'sandwich trading,' and is widely considered as a method for using state contention to extract MEV.

(https://blog.init4.technology/p/the-hand-off-problem#footnote-anchor-10-148199411)[10]

The loan only lasts for a few seconds. If the sorter can maintain Timestamp or Block boundaries in some cases, the actual borrowing time can be zero.

(https://blog.init4.technology/p/the-hand-off-problem#footnote-anchor-11-148199411)[11]

Builders are willing to pay as much as their subjective value of review, which may bid up the price beyond the objective extractable value of Block. In extreme cases, this may result in a negative change in the reviewer's ETH balance (i.e., they pay more ETH than the fees and rewards obtained from the Block).

(https://blog.init4.technology/p/the-hand-off-problem#footnote-anchor-12-148199411)[12]

Note that this relies on MEV auction rules that prevent transactions from different bundles from interleaving and disallow "must-revert" transactions. If these rules are relaxed to allow transactions from bundles to interleave and/or builders start supporting "must-revert" blocks within bundles, the protection no longer holds. This dynamic arises because if IL transactions must come at the end of a block, there can be no non-forced-inclusion interleaving transactions, so at most one searcher-reviewed bundle can appear.

(https://blog.init4.technology/p/the-hand-off-problem#footnote-anchor-13-148199411)[13]

Actually, it allows builders to create limited cross-block bundles. Like FOCIL Such a pre-consensus system can alleviate this problem.

(https://blog.init4.technology/p/the-hand-off-problem#footnote-anchor-14-148199411)[14]

For standard ERC-20 Tokens, transfer calls are typically not subject to validation through disputes as third parties cannot decrease a user's balance. However, consider the transferFrom call. If the approved transferor is a contract that allows for state disputes, then the operation may be subject to validation through disputes (consuming the approval required by transferFrom in some unexpected way).

Statement:

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2. Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
3. Gate Learn team translates articles into other languages. Unless otherwise specified, copying, distributing, or plagiarizing translated articles is prohibited.

Background Introduction

Every week I spend hours reading, researching, and interacting with some top founders and investors. This is my attempt to provide you with a very real Snapshot of the encryption field, based on first-hand observations from my experiences at Token 2049 and Solana Breakpoint events.

Since 2013, I have been in this circle, so please believe me when I tell you the real situation today. Most of my meetings are one-on-one, but I also explored the Token 2049 booth like Alice in Wonderland, in a maze-like situation.

First of all, a warm round of applause to the organizers of Token 2049, Singapore, and Marina Bay Sands - everything seamlessly connected. Only Singapore can host such an exquisite event in its busiest week, with the F1 race looming. Without further ado, let's delve into the atmosphere, chain, projects, founders, venture capital, narratives, and of course, the winners and losers of this event. Get ready... we're going deep!

Overall Atmosphere

For the past decade, we've been telling the story of a bright future where Cryptocurrency will revolutionize the world, solve real-world problems, and welcome a large number of Web2 users into this bold new world. But frankly, Cryptocurrency hasn't quite lived up to that promise. Instead, we collectively became thrill-seeking "gamblers", jumping from one Ponzi Scheme to another like espresso-drinking squirrels.

The dilution phenomenon is a perfect example in this Token 2049 event with more than 500 side events. The project's funds are in surplus, with marketing budgets far exceeding actual revenue (if any), and the gorgeous booths and five-star venues conceal the reality of extremely low user adoption. Venture capitalists, who once poured billions into any White Paper, have now hit the pause button. The good news is that only serious projects can now get funded. The bad news is that it took us too long to get to this point.

Therefore, we see that the phenomenon of fragmentation is becoming more and more apparent, with over 100 L1/L2 protocols competing for the attention of the same group of encryption audiences - interaction is decreasing, and Depth conversations are also becoming less frequent. We jump from Solana to Ethereum, from Base to Justin Sun's "Icarus-style" adventure today, flying closer and closer to the sun. This short-term drama is good, but where is the long-term vision? Where is the promised mass adoption? Jumping from one meme to another, from one chain to another, is not a real business model. 01928374656574839201

In recent years, we have experienced the ICO frenzy, Decentralized Finance Mining, Non-fungible Token craze, GameFi distribution of Ponzi Scheme, PoS stake, and the current BTC stake (Is this true?). Ultimately, we have fallen into the Pyramid Scheme of points and Airdrop. What will be the next gimmick? The people I communicate with are very worried about the future direction of this industry. Many things are happening, but the actual results are few.

Venture capitalists are frustrated because they did not anticipate the frenzy of meme coins, and they cannot use Compliance funds to enter this field. Founders complain that venture capitalists no longer invest in "every weed" and hope that "a rose" can bloom in the "garden". Speculators who chase new narratives are exhausted, and miners are disappointed because Airdrops and points have not brought free wealth (such as Grass, Eigen, Blast, etc.). The only ones smiling are those in the trading (CEX, DEX, Perptual Futures), gambling (Rollbit, Shuffle, Polymarket, memecoin), and infrastructure fields that support these activities. This can be clearly seen from the F1 sponsors, large booths, and multimillion-dollar marketing budgets.

Meanwhile, AI and stocks are stealing the spotlight, with NVIDIA bringing returns comparable to Crypto Assets. In fact, the returns are higher, the risks are lower, and it provides a simple UI/UX through the Fiat Currency channel. Smart TradFi funds are gaining better returns through stocks, with lower risks (yes, I know stocks have risks, but look at the current situation of Crypto Assets). Why bother with Crypto Assets? Why not just buy Options for MSTR or COIN to achieve similar exposure?

This is still good, not all dark. There is still some light at the end of the tunnel. There are still outstanding founders getting funding, and real applications with actual revenue capabilities are beginning to emerge. Venture capital is becoming more picky, which is really good, and we are also seeing corporate players like Sony, global banks and financial companies cautiously entering this field. But it should be clear - this is not yet the large-scale adoption we promised.

So where is the opportunity? I will explore this question below, but I believe the answer depends on everyone's perspective on Token. Where are you, what game are you playing, which team do you belong to, and what is your situation? In the field of encryption, two types of games have emerged:

1. Short-term narrative-driven games - quick in and out - no problem, but mostly played by speculators, short-term founders, venture capital and KOLs, who hope to quickly get rich by catching the "blade" of the fall.

2. Long-term venture capital-supported games - Supported by large funds, top developers and founders hope to achieve substantial returns through listing and projects that may become Solana or infrastructure in the future.

Therefore, although these activities may feel like a parade in the rain, there are still highlights - the founders, projects, and venture capitalists that may surprise us in the coming years. I have been in the XTZ hole of 01928374656574839201 for 11 years, and I will continue to stay, but I need to make it clear: if BTCrise to $100,000, we will all return to the world of Ponzi Scheme at a speed faster than you can say "Decentralization." No one will care about the fundamentals - until the market rings the alarm, and by then it may be too late.

To be eager for knowledge as if you were starving, to be humble as if you were foolish, to avoid risks, and to be consistent.

—— Sankalp Shangari, Hashtalk :)

Crypto Assets Audience

1. encryption Retail Speculators - (65%)

These Newbies are like enthusiastic puppies, chasing after every shiny goal. They are mainly here to find the next Bonk, WIF, or Poppet, hoping to make a profit through quick exits. Their characteristics include:

• Hopeful speculators: They believe they can get rich overnight by short-term rotation among various meme coins, like children running from one piece of candy to another at a carnival.
• Welfare enthusiasts: These people are mainly interested in gifts, including booth gifts, parties, and countless side meetings that promise free drinks and snacks.
• Short-term thinkers: They follow immediate gains, often overlooking the broader perspective and the complex game behind it.
• Project Founders: Some of them even try to launch their own projects, usually with the help of like-minded short-term venture capital. However, most of these founders find it difficult to obtain financial support.

2. "Smart" developers and venture capitalists (25%)

This group of people considers themselves as elite and 'cool' individuals, aiming to imitate figures such as Vitalik, Anatoly or Raj, while selling their dreams to the venture capitalists who are obliged to fund them. Their strategies include:

• Priority access to funds: They prioritize ensuring access to funds for the next 2-3 years, creating buzz through collaborations with Key Opinion Leaders (KoL) and flashy announcements.
• TokenHedging: They usually sell a large amount of treasury Tokens to fund further operations and hedge their Tokens when they go public, planning to gradually sell them while causing the price to drop after they trap it.
• Let others take over the mess: If the market enters a Bear Market, it will be the risk investors and retail investors who are left holding the empty bag, while these founders can enjoy generous salaries and business class travel.
• The Illusion of Long-Term Vision: They disguise themselves as winners of change until the release of the Token, at which point their true intentions will be revealed - think about the cases of Blast and Friend.tech before they jump to the next Ponzi Scheme. There are countless examples like this.

3. The Real Builder (10%)

The last group is those true visionaries - the real Chads who are truly committed to building the "future of France" (or any vision of theirs). Their characteristics are:

• Excellent Wisdom: They are not just selling dreams, but focusing on creating profitable businesses that can generate real value.
• Perseverance: Although they may have difficulty gaining follow in the early stages, they remain steadfast and will not release Token to exit Liquidity.
• Long-term commitment: They come for long-term goals, down-to-earth, willing to speak their minds, and advocate for sustainable rise in the industry.

In short, these three groups of people show the overall attitude in the field of encryption - from impulsive gamblers to savvy planners, and finally to those true builders who are truly building the future, they may be the ones who lead us towards a brighter future.

L1/L2 and Infrastructure

• ETH's Identity Crisis: ETH is currently experiencing an identity crisis - you could call it a midlife crisis, trying to buy a sports car while others choose electric cars. As most followers (and developers) turn to Solana and certain EVM Layer 2 solutions, many users are starting to criticize ETH. In the end, price matters more than block size. I've been asking myself, are the thought leaders of ETH too comfortable in their mansions to engage with the actual developer community? Why can't they be more like Solana? Is Vitalik the right savior? Solana: The unequivocal frontrunner: In my opinion, Solana is showing itself off as if it had won the "Best of the Show". My support for Solana has been very high-profile in our [Telegram channel] (https://t.me/+xQ8q95sfzSFiY2Y1) and various newsletters on Hashtalk. In the wake of the Breakpoint event, the buzz around the Solana ecosystem has never been greater. They're not just talking; Their products are delivered faster than a pizza delivery on Game Night. Take a look at Firedancer. In contrast to the chaotic ETHGlobal event, the Solana community is very well organized. Solana's single-chain focus and unified community give them an edge – focus, my friends, is key! For a detailed Solana analysis, subscribe to [5-Min Macro and Crypto] (https://hashtalks.substack.com/) or [52 Trades in 52 Weeks] (https://52trades52weeks.substack.com/).

• TON：At Token 2049, TON's TADA taxi service and TON encryption payment have been highly welcomed. Everyone is using it and passing on the referral codes for TON and TADA. The marketing activities on both sides are really clever. TON is the next clear L1 competitor, with 800 million users and the potential to truly create large-scale adoption. I am optimistic about its prospects.
• Venture Capital Interest and Funding the Next SOL Killer: Venture capital continues to flow towards the next potential Ethereum or Solana killer. From a mathematical perspective, this is obvious: if you can find a project that can bring a 1000x return in the next few years, funding it is as simple as finding a golden ticket in a chocolate bar. There are over 10 L1 protocols in the market with almost no activity, and the FDV still ranges from 1-10 billion dollars. This is a huge return for any venture capitalist. As long as it remains effective, continue funding. So, keep funding until it is no longer effective. Gen Z L1 Project Trend: Projects like Monad and Berachain are the latest hot topics, while SUI and Base are also on the way. In contrast, old chains like Aptos, SEI, and TIA (Millennial L1) are losing momentum, and "baby boomer" chains like Polygon, Algorand, and Cosmos are quickly disappearing from the spotlight. Sure, we'll see occasional price pumps fueled by market makers and new narratives – look at FTM and AVAX – but these tend to be as ephemeral as Snapchat stories. I might reconsider if I could see any of these on-chain DApps that really stand out and get followed like GMX, Hperliquid, Polymarket, or Friend.tech.
• Focused on Specific Chains: We are seeing a shift towards chain-specific niches: Solana focuses on internet memes/payment/transactions, Ronin focuses on GameFi, Arbitrum focuses on Decentralized Finance. This trend, coupled with chain abstraction and Cross-Chain Interaction solutions, is enhancing the user experience and making interactions smoother.
• Turning to B2B infrastructure and service providers: Some established chains are now offering CDK, SDK, Rollup, and AppChain. While this may help maintain the influence of their tokens, it feels like a stopgap measure—suitable for yachting, but not entirely reliable for the sustainability of the ecosystem.

Summary: While Ethereum is struggling with an identity crisis like a teenager unsure of its hairstyle, Solana is moving forward, driving innovation and community participation. As we continue down this path, it will be very interesting to observe how the dynamics evolve and which projects can withstand the test of time.

Projects and Founders

• The harsh reality of encryption funding: Face the reality: Most projects in the encryption field are going through a slow and painful death process. The glorious days are long gone, when all you needed was a dazzling PPT to attract funding. Now, it's like trying to sell ice to Eskimos - it's all about luck!
• Funding Cycle: Endless Wheel: The situation of projects obtaining funds is not good. They are caught in an endless wheel, consuming venture capital. Once the funds are depleted or reach a dangerous low point, they must raise more funds or launch tokens. If the tokens gain development, they may survive for another 2-3 years; if not, they have to start over. Without new users or actual revenue, the path to profitability becomes blurred, just like walking in the foggy night on a desolate road.
• The Rise of New Projects: Old projects are like toys that used to be popular but no one wants to play with anymore. Why invest in outdated things when there are emerging options like SUI, Aptos, Berachain, and Monad that offer grants and attract activity? It's just old wine in a new bottle - and it may not even be fine wine.
• Ponzi Scheme2.0：And then there are those constantly emerging Ponzi Schemes, growing like wild grass after the rain. This reminds me of the Celsius and BlockFi era, when lending got out of control, leading to a brutal collapse. Now, we see a similar cycle: stake, restake, and the classic 'Your Token generates my Token, and together we generate profits!'—but this time on a 10x scale and more on-chain. When will this end? Your guess is as good as mine!
• The dilemma of technical founders: Most technical founders seem to be unaware of the uniqueness of encryption. They often fail to realize that popular terms such as tokenomics, product-market fit, and community building are crucial to success. Having an excellent product is just the foundation; you also need a massive network and a bit of luck to succeed. If you're not in the right venture capital circle or not a member of the "KoL Mafia," you can only rely on luck.

In short, encryption is a strategy game, and if you want to participate, it is best to understand the rules - otherwise you may become another warning in the wilderness of Digital Money.

"They are playing a game, but pretending not to. If I expose their tricks, it's like breaking the rules, and they will punish me for it. So I can only play by their rules and pretend not to know anything." - R.D. Laing

Venture Capital Fund

• A year in the life of a venture capitalist: navigating through the encryption swamp Face reality - most venture capitalists have had a tough year: either they got on board too early and watched their investments sink, or they invested this year only to find out there's still 12-18 months until unlock. In the encryption time, it's like waiting for a snail to complete a marathon!
• Smart Few: However, there are a few venture capitalists who play the game like chess masters. They help bring tokens to market with high valuations (FDV), hedge the risks, and then buy back at a low price when the token price falls to the bottom. It's like buying a discounted high-end suit after the fashion show ends - just know when to hold and when to exit!
• Revenue Competition: Most venture capitalists have finally realized that there are projects in the market that can generate actual revenue, such as Friend Tech, Pump Fun, and Polymarket. Now, everyone is racing to chase the next big opportunity. The challenge is to identify winners in a fiercely competitive market - Pump Fun alone has over 100 alternative options! It's like a crowded space in an online activity, where everyone is striving to stand out!
• Liquidity困境：Liquidity providers are becoming darlings in the world of encryption, as projects urgently need more total Lock-up Position value (TVL) and funds to successfully launch their Token. Looking back, it's hard to ignore that most Liquidity funds have not performed as well as BTC this year—unless they have a good hand in trading meme coins or encryption stocks.
• Meme coins are difficult to access: Regulated funds cannot access meme coins, and unfortunately, most of the follow-up this year has focused on meme coins.
• Liquidity providers (LPs) are starting to show interest in rise, but they are all waiting for dramatic events to happen. I've had conversations with wealth managers and family offices in Asia. While they are interested in ETF launches, they need a trusted party to handle their funds, and every now and then, they receive some bad news/hacker attacks/scam incidents, and then they withdraw their funds.

Summary: Although the market environment is turbulent and full of challenges, those who have faith as sailors may find a path to success in this encryption chaos.

Narrative

• AI Project Highlights: AI projects stand out in terms of expected market share. Everyone seems to be building a decentralized computing network, just like everyone is developing higher TPS L1/L2 protocols. But I am very positive about the intersection of AI and encryption. Looking forward to communicating and guiding founders in this field. Don't hesitate to contact me.
• The Most Frequently Asked Question - What do you think the next narrative will be? Everyone wants to build or invest in the next short-term narrative.

• Leadership in the encryption field in Asia: Asia leads in the field of encryption, with a comparable number of developers, founders, and venture capitalists as the West. Compared to the West, the regulations in Singapore/Dubai/Hong Kong are more clear, and everyone I have spoken to hopes to enter the Asian market. The Asian population is younger, more vibrant, and more accepting. If you need strategic support or distribution in Asia, please feel free to contact me. This is my expertise.

• Perps narrative returns to Hyperliquid: After GMX, no Perptual Futures DEX has been followed except HyperLiquid. Everyone is waiting for the launch of HyperLiquid, and some even claim that its FDV at launch may reach 100 billion US dollars. This may set the tone for other innovative Perptual Futures platforms to be successfully launched and perform well.
• Real World Assets (RWA): This is another category that we and the entire industry are interested in. Currently, Helium and Solana seem to be leading in this race. Helium is expanding home Wi-Fi signals and is currently partnering with mobile companies, allowing them to receive their signals and share Helium's coverage. This amazing real-world use case now has over 750,000 users.
• Meme Coin Craze Unstoppable: Because fundamentally we are 'Cryptocurrency Speculation degens'. Meme coins may have been quiet lately, but they're still around. Every dip in major meme coins like WIF, POPCAT, BONK, PEPE, MEW, GIGA, SUN, MOTHER, etc., is personally seen as a good buying opportunity. We are also investing in meme coin-related infrastructure, which has the potential to generate real income and holds a significant position in multiple trades.
• The excitement of chain abstraction as infrastructure: Chain abstraction as an infrastructure solution is very exciting. However, there are too many participants and booths at Token 2049. I haven't seen any clear winners yet, but the use case is clear to me - providing multi-chain transactions to users without needing to know which blockchain they are using. I am very positive about the simple chain abstraction infrastructure. Please contact me.
• The development of the BTC ecosystem seems to be slowing down: Although there is a lot of activity and enthusiasm, the expected market share is not as strong as last year. The entire ecosystem is still in chaos, and the actual application and user experience are far apart.
• Loss of momentum in staking and restaking: Due to too many derivatives appearing on multiple on-chain platforms, the ecosystem has become fragmented and the risk has increased. I am not very optimistic about this. LIDO, the representative project of stake, seems to be cursed, and people are turning to other areas. I don't have high hopes for the entire stake/restake mechanism, but I will remain open-minded if I see something interesting.
• DEPIN: This is everything you need to know about DEP. Exciting articles fromknower provided.

Winners and Losers

• SOL is obviously the winner: SOL is the clear winner of 'one chain to rule them all', followed by ETH, and TON is a potential chain that closely follows, as mentioned above.
• TON and SUI currently have the highest followings among all L1s, with a potential user base of up to 8 billion. My money is staked on TON, and I see SUI as just another temporary millennial chain. SUI is approaching its $25 billion FDV ceiling, I believe that's it. If you are developing on TON, please reach out to me. I am currently evaluating several worthwhile applications and small apps worth following on TON.
• TAO/Bitrensor is one of the most followed projects and one of my favorite projects in the AI field. It is a clear winner in its category. Render is also a project that I like.
• Binance may cause a sensation when CZ appears. But BSC needs to create memes like Justin, not list the wrong "Neiro".

• $Mother has gained a great following in the meme coin community, and I believe Izzy has done an excellent job promoting it. I haven't seen any celebrity go all out like she did.

• Hyperliquid is shining. With its smooth user experience, it has quickly become the preferred exchange for many people. Opinions are divided - some people like it, while others do not. Traders are very transparent: some hold a large amount of Tokens, betting on the launch of the Token. It is difficult to predict its initial performance, but it is worth following closely!

• Liquidity issue of new projects: There are over 40 excellent projects scheduled to go online in Q4, with over 100 more projects waiting. This means there is a new FDV of over $20 billion. Who will buy these Tokens? If people want to buy projects like Monad and Berachain, they must sell Millennium Generation and Boomer L1 Tokens. I think the Liquidity is insufficient, and many projects and their communities will be harmed.
• GameFi is still lackluster: people seem to be less interested in GameFi. But I think GameFi will rebound at some point. We are optimistic about some projects from last year that have performed well, but there have been no new investments in GameFi this year. I like Ronin.

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This article explores the development of data accessibility in blockchain, compares the characteristics of The Graph, Chainbase, and Space and Time data service protocols in terms of architecture and AI technology applications, points out that blockchain data services are developing towards intelligence and security, and will continue to play an important role as industry infrastructure in the future.

1. Introduction

From the first wave of dApps in 2017, such as Etheroll, ETHLend, and CryptoKitties, to the blossoming of various financial, gaming, and social dApps based on different blockchains, have you ever considered the origins of the various types of data adopted by these dApps in their interactions when we talk about on-chain applications of Decentralization?

In 2024, the focus is on AI and Web3. In the world of artificial intelligence, data is like the lifeblood of its growth and evolution. Just as plants rely on sunlight and water to thrive, AI systems also rely on massive amounts of data to continuously "learn" and "think." Without data, the algorithms of AI, no matter how exquisite, are just a castle in the air, unable to exert their due intelligence and efficiency.

From the perspective of data accessibility in the blockchain, this article deeply analyzes the evolution of blockchain data indexing in the industry development process, and compares the old data indexing protocol The Graph with the emerging blockchain data services protocol Chainbase and Space and Time. It particularly explores the similarities and differences in data services and product architecture features of these two new protocols that combine AI technology.

2. The complexity and simplicity of data indexing: from Block chain nodes to the entire chain database

2.1 Data source: Block chain node

From the beginning of understanding what 'Blockchain' is, we often see a sentence like this: Blockchain is the ledger of decentralization. Blockchain Node is the foundation of the entire Blockchain network, responsible for recording, storing, and disseminating all transaction data on the chain. Each Node has a complete copy of the Blockchain data, ensuring the maintenance of the decentralization feature of the network. However, for ordinary users, building and maintaining a Blockchain Node is not easy. This not only requires professional technical capabilities but also comes with high hardware and bandwidth costs. At the same time, the query capability of ordinary Nodes is limited and cannot query data in the format required by developers. Therefore, although theoretically everyone can run their own Node, in practice, users usually prefer to rely on third-party services.

To address this issue, RPC (remote procedure call) Node providers have emerged. These providers are responsible for the cost and management of Nodes, and they provide data through RPC endpoints. This allows users to access blockchain data without having to build their own Nodes. Public RPC endpoints are free but have rate limits, which may negatively impact the user experience of dApps. Private RPC endpoints offer better performance by reducing congestion, but even simple data retrieval requires a significant amount of back-and-forth communication. This makes their requests heavy and inefficient for complex data queries. In addition, private RPC endpoints are often difficult to scale and lack compatibility across different networks. However, the standardized API interface of Node providers lowers the threshold for users to access on-chain data, laying the foundation for subsequent data parsing and applications.

2.2 Data Parsing: From Prototype Data to Usable Data

The data obtained from the Block chain node is often the original data that has undergone encryption and encoding processing. Although these data retain the integrity and security of the Block chain, their complexity also increases the difficulty of data parsing. For ordinary users or developers, directly processing these prototype data requires a lot of technical knowledge and computing resources.

The process of data parsing is particularly important in this context. By parsing complex raw data into a more understandable and manageable format, users can have a more intuitive understanding and utilization of this data. The success of data parsing directly determines the efficiency and effectiveness of Block chain data applications, and it is a key step in the entire data indexing process.

Evolution of 2.3 data indexers

With the increase of Block chain data volume, the demand for data indexers is also increasing. Indexers play a crucial role in organizing on-chain data and sending it to databases for querying. The indexer works by indexing Block chain data and making it available at all times through query languages similar to SQL (GraphQL, etc. API). By providing a unified interface for querying data, indexers allow developers to quickly and accurately retrieve the desired information using standardized query languages, greatly simplifying the process.

Different types of indexers optimize data retrieval in various ways:

· Full Node Indexer: These indexers run full Block chain nodes and extract data directly from them, ensuring data integrity and accuracy, but requiring a large amount of storage and processing power.

· Lightweight indexer: These indexers rely on complete Nodes to retrieve specific data as needed, reducing storage requirements but potentially increasing query time.

· Dedicated Indexers: These indexers are specifically designed for certain types of data or specific blockchains, optimizing retrieval for specific use cases, such as Non-fungible Token data or Decentralized Finance transactions.

· Aggregator: These indexers extract data from multiple blockchains and sources, including off-chain information, and provide a unified query interface, which is particularly useful for multi-chain dApps.

Currently, the archive Node of Ethereum in the Geth client occupies about 13.5 TB of storage space in archive mode, while the storage demand in the Erigon client is about 3 TB. As the blockchain continues to rise, the data storage of archive Nodes will also increase. Faced with such a huge amount of data, mainstream indexers not only support multi-chain indexing, but also customize data parsing frameworks for the data needs of different applications. For example, The Graph's 'subgraph' framework is a typical case.

The emergence of indexers greatly improves the indexing and querying efficiency of data. Compared with traditional RPC endpoints, indexers can efficiently index a large amount of data and support high-speed queries. These indexers allow users to perform complex queries, easily filter data, and analyze it after extraction. In addition, some indexers also support aggregation of data sources from multiple blockchains, avoiding the need to deploy multiple APIs in multi-chain dApps. By running distributed on multiple nodes, indexers not only provide stronger security and performance, but also reduce the risk of interruption and downtime that centralized RPC providers may bring.

In contrast, an indexer allows users to directly obtain the required information without dealing with the underlying complex data by using a predefined query language. This mechanism significantly improves the efficiency and reliability of data retrieval, which is an important innovation in Block chain data access.

2.4 Full-Chain Database: Aligning with Flow Priority

Using an indexed Node to query data often means that the API becomes the only gateway to digest on-chain data. However, as a project enters the expansion phase, a more flexible data source is often needed, which standardized APIs cannot provide. With the increasing complexity of application requirements, it becomes increasingly difficult for primary data indexers and their standardized index formats to meet a growing variety of query needs, such as search, cross-chain interaction access, or off-chain data mapping.

In modern data pipeline architectures, the 'stream-first' approach has become a solution to the limitations of traditional batch processing, enabling real-time data ingestion, processing, and analysis. This paradigm shift allows organizations to immediately respond to incoming data, almost instantly gain insights, and make decisions. Similarly, the development of blockchain data service providers is also moving towards the construction of blockchain data streams, with traditional indexer service providers successively launching products that obtain real-time blockchain data in a streaming manner, such as Substreams from The Graph, Mirror from Goldsky, as well as real-time data lakes generated according to blockchain data streams, such as Chainbase and SubSquid.

These services aim to address the need for real-time parsing of Block chain transactions and provide more comprehensive query capabilities. Just as the 'stream-first' architecture improves data processing and consumption in traditional data pipelines through drop latency and enhanced response capabilities, these Block chain data stream service providers also hope to support the development of more applications and assist on-chain data analysis through more advanced and mature data sources.

By redefining the challenges of on-chain data from the perspective of modern data pipelines, we can look at the full potential of on-chain data management, storage, and delivery from a new perspective. When we begin to view subgraphs and ETH block ETL indexers as data streams in data pipelines rather than final outputs, we can envision a world where high-performance datasets can be tailored to any business case.

3. AI + Database? In-depth comparison of The Graph, Chainbase, Space and Time

3.1 The Graph

The Graph network uses a Decentralization Node network to provide multi-chain data indexing and query services, facilitating developers to easily index blockchain data and build Decentralization applications. Its main product modes are the data query execution market and the data indexing cache market, both of which are essentially to serve the user's product query needs. The data query execution market specifically refers to consumers paying appropriate indexed Node for the required data, while the data indexing cache market is a market where indexed Nodes allocate resources based on the historical indexing heat of the subgraph, the query fees collected, and the on-chain curators' demand for subgraph output.

Subgraphs are the basic data structures in The Graph network. They define how to extract and transform data from the blockchain into queryable formats (such as GraphQL schemas). Anyone can create subgraphs, and multiple applications can reuse these subgraphs, which improves data reusability and efficiency of use.

The Graph network consists of four key roles: indexers, curators, delegators, and developers, who collectively provide data support for web3 applications. Here are their respective responsibilities:

· Indexer: The Indexer is a Node operator in The Graph network. Indexers stake GRT (The Graph's native token) to participate in the network and provide indexing and query processing services.

· Delegator: Delegator is the user who stakes GRT Tokens to the Index Node to support its operation. Delegators earn a portion of the rewards through the Index Node they delegate to.

· Curator: The curator is responsible for signaling which subgraphs should be indexed by the network. The curator helps ensure that valuable subgraphs are processed first.

· Developers: Unlike the previous three as suppliers, developers are the demand side and the main users of The Graph. They create and submit subgraphs to The Graph network, waiting for the network to satisfy the demand for data.

Currently, The Graph has transitioned to a fully decentralized subgraph hosting service, with circulating economic incentives among different participants to ensure the system operates smoothly:

· Index Node reward: Index Nodes earn revenue by consuming the query fees from consumers and a portion of the GRT Token Block reward.

· Delegator rewards: Delegators receive partial rewards through the indexed Nodes they support.

· Curator Reward: If curators signal valuable subgraphs, they can receive a portion of the query fees as a reward.

In fact, The Graph's products are also rapidly developing in the AI wave. As one of the core development teams in The Graph ecosystem, Semiotic Labs has been dedicated to optimizing indexing pricing and user query experience using AI technology. Currently, the AutoAgora, Allocation Optimizer, and AgentC tools developed by Semiotic Labs have improved the performance of the ecosystem in various aspects.

· AutoAgora introduces a dynamic pricing mechanism, adjusting prices in real time based on query volume and resource usage to optimize pricing strategies and ensure the competitiveness and maximization of indexer revenue.

· Allocation Optimizer solves the complex problem of subgraph resource allocation, helping the indexer achieve the optimal configuration of resources to improve revenue and performance.

· AgentC is an experimental tool that allows users to access The Graph's blockchain data through natural language, thereby enhancing the user experience.

The application of these tools enables The Graph to further enhance the intelligence and user-friendliness of the system with the assistance of AI.

3.2 Chainbase

Chainbase is a full-chain data network that integrates all Block chain data into one platform, making it easier for developers to build and maintain applications. Its unique features include:

· Real-time Data Lake: Chainbase provides a real-time data lake specifically designed for the blockchain data stream, allowing data to be accessed instantly upon generation.

· Dual-chain architecture: Chainbase has built an execution layer based on Eigenlayer AVS, forming a parallel dual-chain architecture with the ConsensusAlgorithm of CometBFT. This design enhances the programmability and composability of Cross-Chain Interaction data, supporting high throughput, low latency, and finality, and enhancing network security through a dual stake model.

· Innovative data format standard: Chainbase has introduced a new data format standard called "manuscripts", optimizing the structured and utilization of data in the encryption industry.

· encryption World Model: With its vast Block chain data resources, Chainbase combines AI model technology to create an AI model that can effectively understand, predict block chain transactions and interact with them. The basic version model Theia has been launched for public use.

These features make Chainbase stand out in the Block chain index protocol, especially focusing on the accessibility of real-time data, innovative data formats, and creating smarter models to enhance insights through the combination of on-chain and off-chain data.

Chainbase's AI model Theia is a key highlight that distinguishes itself from other data service protocols. Theia is based on NVIDIA's developed DORA model, combined with on-chain and off-chain data as well as temporal and spatial activities, learns and analyzes encryption patterns, and responds through causal inference, thus deeply exploring the potential value and regularity of on-chain data, providing users with more intelligent data services.

The data service empowered by AI makes Chainbase no longer just a Block chain data service platform, but a more competitive intelligent data service provider. With powerful data resources and proactive analysis by AI, Chainbase can provide broader data insights and optimize users' data processing.

3.3 Space and Time

Space and Time (SxT) aims to build a verifiable computation layer, expanding Zero-Knowledge Proof on the Decentralization data warehouse to provide trustworthy data processing for smart contracts, large language models, and enterprises. Currently, Space and Time has raised $20 million in its latest Series A funding round, led by Framework Ventures, Lightspeed Faction, Arrington Capital, and Hivemind Capital.

In the field of data indexing and validation, Space and Time has introduced a new technological approach called Proof of SQL. This is an innovative Zero-Knowledge Proof (ZKP) technology developed by Space and Time to ensure that SQL queries executed on the Decentralization data warehouse are tamper-proof and verifiable. When running a query, Proof of SQL generates an encryption proof to verify the integrity and accuracy of the query results. This proof is attached to the query results, allowing any validators (such as Smart Contracts) to independently confirm that the data has not been tampered with during the processing. Traditional blockchain networks typically rely on Consensus Mechanisms to verify the authenticity of data, while Space and Time's Proof of SQL implements a more efficient way of data validation. Specifically, in Space and Time's system, one Node is responsible for data retrieval, while other Nodes verify the authenticity of the data using zk-SNARKs technology. This approach changes the resource consumption of multiple Nodes repeatedly indexing the same data under Consensus Mechanisms to achieve Consensus and improves the overall performance of the system. As this technology matures, it serves as a cornerstone for the development of a series of traditional industries focusing on data reliability and constructing products based on on-chain data from Blockchain.

Meanwhile, SxT has been closely collaborating with Microsoft AI Joint Innovation Lab to accelerate the development of generative AI tools, making it easier for users to process blockchain data through natural language processing. Currently, in Space and Time Studio, users can experience inputting natural language queries, and the AI will automatically convert them into SQL and execute the query on behalf of the users, presenting the final results they need.

3.4 Differential Comparison

4. Conclusion and Prospects

In conclusion, Block chain data indexing technology has evolved from the initial Node data source, through the development of data parsing and indexers, to the ultimate evolution of AI-empowered full-chain data services, undergoing a gradual improvement process. The continuous evolution of these technologies has not only improved the efficiency and accuracy of data access, but also brought users an unprecedented intelligent experience.

Looking ahead, with the continuous development of AI technology and new technologies such as Zero-Knowledge Proof, blockchain data services will become more intelligent and secure. We have reason to believe that blockchain data services will continue to play an important role as infrastructure in the future, providing strong support for industry progress and innovation.

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Yesterday, the US Securities and Exchange Commission (SEC) imposed a penalty on Galois Capital Management LLC, a former registered investment adviser from Florida that primarily invests in Crypto Assets. The SEC found that Galois Capital failed to comply with custody rules under the Investment Advisers Act of 1940, particularly in the management of encryption assets. Specifically, Galois Capital failed to ensure that the encryption assets it managed were held in qualified custodial institutions, instead placing these assets on non-compliant Cryptocurrency trading platforms, resulting in the loss of most assets during the FTXexchange crash. In addition, Galois also misled investors by providing inconsistent redemption terms.

Aiying believes that such events will occur frequently in the field of encryption asset management in the future. With the increasing popularity of encryption assets, investment advisory companies are still in a self-regulatory state due to the lack of early regulation and the increasing compliance costs in the later stage. Therefore, the probability of encountering a Black Swan Event or being reported and punished by regulation in the future will only become higher and higher.

1. Applicability and Extension of US Custody Rules

The Origin and Original Intention of Custody Rules

United States custody rules, simply put, are legal provisions used to protect investors' assets. These rules are derived from the Investment Advisers Act 1940, when the goal was to prevent any "tricks" in the management of client assets by investment advisers. Under this rule, if an investment adviser has the authority to control or manage a client's assets, those assets must be held by a qualified custodian, such as a regulated bank or financial institution.

The core idea of custody rules is simple: investment advisory firms cannot mix client assets with their own money and must manage them separately. If there are any changes in client assets, the custodian must notify the client in a timely manner and provide regular reports on the status of the assets. These measures are designed to ensure the safety of investors' funds and prevent losses due to the mistakes or improper behavior of investment advisors.

Expanded to virtual assets

With the popularity of virtual assets such as Bitcoin and Ethereum, the financial market has undergone significant changes. Due to their characteristics of decentralization, anonymity, and price fluctuation, virtual assets have brought new challenges to traditional asset management. Seeing this change, the SEC realized that it was necessary to expand the scope of protection of custody rules to these emerging virtual assets.

In recent years, the SEC has clearly stated that custody rules are not only applicable to traditional financial assets such as stocks and bonds, but also to virtual assets. In other words, if an investment advisory firm manages clients' Crypto Assets, these assets must also be placed with a qualified custodian. A qualified custodian must not only comply with traditional regulatory requirements, but also have the technical ability to deal with the unique risks of virtual assets, such as preventing Hacker attacks or the loss of Crypto Assets.

2. Requirements for US Qualified Custodian License

The United States, SEC and other relevant regulatory agencies have begun to follow and regulate the qualified custodians of Virtual Money assets in this emerging field. Qualified custodians of digital assets need to meet the requirements of traditional custodians, and also have specialized capabilities to manage and protect these digital assets. Here are some key standards and requirements for qualified custodians of digital assets:

Types of qualified custodians for digital assets

1. Banks and Trust Companies:

• Banks and trust companies regulated by federal or state governments may offer custody services for digital assets. In order to meet the requirements of qualified custodians, these institutions must have the technology and infrastructure to protect and manage digital assets.

2. Dedicated Digital Asset Custodian Company:
   • Some companies specialize in providing custody services for Crypto Assets and other digital assets. These companies may have been registered at the state or federal level and are subject to strict regulation. For example, companies like Coinbase Custody and BitGo Trust have provided custody services for digital assets and have obtained custodial qualifications in specific states or at the federal level.
3. Register as a proprietary trader:

• Broker-dealers regulated by FINRA may offer digital asset custody services, but they must ensure that they have the specialized technical expertise to manage digital assets.

4. Other regulated Financial Institutions:

• Some regulated Financial Institution, such as futures brokers or foreign Financial Institution, if they meet the requirements for digital asset custody, can also be considered as qualified custodians.

Key Requirements for digital asset Custodians

1. Security Technology Infrastructure:
   • The custodian of digital assets must have advanced network security technology to prevent Hacker attacks and asset loss. This typically includes the use of cold storage, multisignature technology, hardware security modules (HSM), etc.
2. Asset separation and independent account:
   • digital asset must be stored separately from the custodian's other assets, and the client's assets must be placed in a separate account and clearly identified as client assets.
3. Regular Auditing and Reporting:

• The digital asset custodian shall undergo regular third-party audits to ensure the security of the assets and the compliance of the custodial services. In addition, they are also required to provide regular asset status reports to clients.

4. Compliance capability:
   • The digital asset custodian must comply with the same Compliance requirements as traditional asset custodians, including Anti-Money Laundering (AML), Know Your Customer (KYC), and other applicable financial regulations. In addition, they must also adhere to specific digital asset Compliance frameworks, such as the transparency and traceability of blockchain transactions.
5. Insurance and Security Measures: To further protect customer assets, digital asset custodians usually purchase insurance to prevent asset losses caused by Hacker attacks or operational errors.

Regulation and Certification

• Authentication in specific states: In the United States, some states such as New York have passed the 'New York Financial Services Law' (NYDFS), under which the BitLicense allows qualified companies to provide custody services for encryption assets. Aiying艾盈 has previously detailed in an article 'In-depth analysis: Two major licenses for Web3 enterprises to conduct Virtual Money business in New York State - BitLicense and Limited Purpose Trust Company License'.
• Federal regulation: Although federal regulation has not yet fully covered all types of digital asset custody services, regulatory agencies such as the SEC and CFTC are gradually developing relevant rules and regulating the market. This can be referenced in Aiying's previous article "In-depth analysis of the legal basis and requirements of US cryptocurrency payment license".

Currently, there are a total of 12 institutions that have obtained custody licenses:

(Source: New York State Department of Financial Services NYDFS)

3. Policies in other regions

Hong Kong

1. Background Introduction

As an international financial center, Hong Kong is gradually strengthening its regulation in the field of digital assets. With the popularity of cryptocurrencies and blockchain technology, regulatory agencies in Hong Kong are starting to formulate corresponding regulations to regulate the custody and trading services of encryption assets. The Trust or Company Service Provider (TCSP) license in Hong Kong is one of the licenses that digital asset custodial service providers must obtain. For more details, please read "Understanding the Latest Application Policy for Hong Kong Virtual Asset Custodial Service Providers (TCSP) in 24 Years".

2. Specific Requirements

• TCSP License: In Hong Kong, companies providing asset custody services for encryption need to apply for and hold a TCSP license. This license is regulated by the Companies Registry (CR) of Hong Kong, aimed at ensuring that institutions providing trust or company services comply with Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) requirements.
• Asset segregation and independent account: Custodians obtaining TCSP licenses must ensure that clients' encryption assets are strictly separated from their own assets and are typically required to be held in separate accounts. This practice can prevent custodians from affecting the security of client assets in the event of financial issues.
• Security Technology and Compliance Requirements: Companies holding TCSP licenses must also have strong network security measures to protect customers' digital assets. This includes the use of cold storage, multisignature technology, and the establishment of strict Compliance procedures to ensure the security of assets.
• Regular Audit and Reporting: Custodial service providers need to conduct regular audits and provide clients with detailed asset status reports to ensure transparency and client awareness.

3. Regulatory Authorities

• Hong Kong Companies Registry (CR): The Companies Registry is responsible for the issuance and supervision of TCSP licenses, ensuring that companies providing custodial services comply with relevant laws and regulations. The CR's main responsibilities include reviewing applications, conducting on-site inspections, and supervising licensed companies to comply with legal requirements for anti-Money Laundering and anti-terrorist financing.

4. Industry Practice

• In Hong Kong, many financial technology companies and traditional Financial Institutions have obtained TCSP licenses to legally provide encryption asset custody services. For example, companies such as OSL, BC Group, Hashkey, etc. have already launched Compliance custody services in Hong Kong, providing safe digital asset management services for domestic and foreign institutional investors.

Singapore

1. Background Introduction

Singapore has attracted many digital asset companies with its open financial policies and innovative environment. The Monetary Authority of Singapore (MAS) is an important institution regulating the custody of digital assets, and it has established a series of regulations to ensure the custody of encryption assets complies with international standards. For more details, please read the Comprehensive Interpretation of Singapore's Payment Services Regulatory Framework and the Requirements for Digital Payment Token (DPT) Licenses

2. Specific Requirements

• Payment Services Act (PSA): Singapore implemented the Payment Services Act (PSA) in 2020, which brings encryption asset services (including custody services) under regulation. Under the PSA, companies providing encryption asset custody services must obtain a 'Digital Payment Token Service' license issued by MAS.
• Custodian Qualification: In Singapore, custodians need to ensure that their technical and operational frameworks comply with strict security standards. MAS requires custodians to have sufficient funds, a sound Risk Management system, and strong network security measures.
• Compliance and Audit: Custodians must comply with the requirements of Anti-Money Laundering (AML) and Combatting the Financing of Terrorism (CFT) regulations, and establish robust Know Your Customer (KYC) procedures. Custodians are also required to conduct regular internal and external audits to ensure transparency and compliance in their operations.
• Customer Asset Protection: The custodian must keep the customer's encryption assets separate from its own assets and provide independent account management services. This requirement aims to ensure the security of customer assets and is not affected by the custodian's financial condition.

3. Regulatory Authorities

• Monetary Authority of Singapore (MAS): MAS is Singapore's central bank and primary financial regulatory authority, responsible for overseeing the compliance of asset custody services. MAS has established a clear regulatory framework for asset custody by implementing the Payment Services Act.

4. Industry Practice

• The digital asset custody market in Singapore is growing rapidly, and many internationally renowned digital asset companies have set up custody operations in Singapore. For example, Propine became the first digital asset custody company to receive a "full custody" license from MAS, marking Singapore's leading position in this area.

Reference information: https://www.sec.gov/newsroom/press-releases/2024-111

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2. Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.

3. The other language versions of the article are translated by the Gate Learn team. Copying, disseminating, or plagiarizing translated articles without mentioning Gate.io is not allowed.

Solana has a market capitalization of about $63 billion and is one of the leading blockchain platforms. It has become the preferred choice for off-chain users, especially in the field of decentralized physical infrastructure network (DePIN), mobile applications, and payments. In a previous newsletter, we highlighted the DePIN project built on Solana, including [Helium]Hivemapper and(https://insights4vc.substack.com/p/blockchain-powered-mapping-exploring).

Over the past year, Solana has made significant progress, especially after Visa announced plans to expand the on-chain Stable Coin functionality of Solana Block, causing a substantial pump in the value of its native Token. At the 2024 Consensus conference, PayPal Holdings, Inc. (NASDAQ: PYPL) announced that its Stable Coin PayPal USD (PYUSD) is now live on Solana, making PayPal's Stable Coin experience faster and at a lower cost (currently, PYUSD has a Market Cap of 8.2783 billion US dollars, with 58.3% on Solana and 41.7% on the ETH chain).

Core Team:

• Anatoly Yakovenko：Founder and CEO
• Raj Gokal：Co-founder
• Greg Fitzgerald: Co-founder and Chief Technology Officer
• Stephen Akridge: Co-founder
• Eric Williams: Co-founder and Chief Scientist

Solana Financing Overview - Total financing is USD 359.55 million; detailed information on financing rounds is as follows:

• Seed Round: conducted in the first quarter of 2018 | Funding amount: $3.17 million | Price: $0.04
• PE Round: conducted in the second quarter of 2018 | fundraising amount: $12.63 million | price: $0.2 Main investors: Jump Crypto, BlockTower Capital, Distributed Global, Reciprocal Ventures, etc.
• Series A Financing: conducted in the second quarter of 2019 | Financing amount: $20 million Major investors: Multicoin Capital (lead investor), Distributed Global, Slow Ventures, RockawayX, NGC Ventures, Blockchange Ventures, etc.
• Validator Round: Conducted in the third quarter of 2019 | Funding amount: $5.7 million | Price: $0.225
• Private Sale: conducted on January 2, 2020 | Funding Amount: $2.29 million | Price: $0.25
• Strategic round: conducted in the first quarter of 2020 | Funding amount: $2.29 million | Price: $0.25
• ICO: conducted on March 23, 2020 | Amount raised: $1.76 million | Price: $0.22 | Platform: Coinlist
• Token Generation and Distribution: April 10, 2020 | Listing Price: $0.67
• Undisclosed round: conducted on June 9, 2021 | Financing amount: USD 314 million Main investors: Andreessen Horowitz (a16z) (lead investor), Polychain Capital (lead investor), Multicoin Capital, CMS Holdings, Ryze Labs (Sino Global Capital), Alameda Research, Jump Trading, etc.

Solana (SOL) Tokenomics (as of September 12, 2024)

• Total Supply of SOL: 584,294,896 SOL
• Circulating Supply: 467,932,073 SOL (80.1%)
• Circulating Supply: 116,362,823 SOL (19.9%)
• Market Cap: $63.3 billion (5th in total, accounting for 3.104% of the total Market Cap of the encryption market)
• stake supply: 383,399,756.5 SOL (65.6% of total supply)
• Locking stake SOL: 48,163,740.1 SOL (12.6% of total stake)
• Inflation rate: The current inflation rate is 5.036%, decreasing by 15% each year, and the final inflation rate is 1.5%
• Supply dynamics: SOL staked includes active and unstaked assets; locked assets are typically temporarily frozen due to investments or funding projects by the Solana Foundation or Solana Labs until a specific date unlocks.
• Fee Structure: 50% of the transaction fees are destroyed, and the remaining portion is allocated as Block Reward to validators.

Solana's Inflation Mechanism

Token issuance and reduction:

Solana's SOL Token is introduced through two main mechanisms: the Genesis Block and protocol inflation (stake rewards). On the other hand, SOL Token is burned through Money Laundering to reduce circulation. The inflation plan is controlled by three parameters: the initial inflation rate is 8%, the annual deflation rate is 15%, and the long-term inflation rate is 1.5%. The current inflation rate is 5.07%, and Solana's inflation began in the 150th epoch of February 2021.

SOL Unlock Schedule (Source:helius）

Impact on Network Participants Proof of Stake (PoS) inflation essentially transfers wealth from non-staking participants to stakers, effectively diluting the value of assets held by non-stakers while rewarding users who participate in staking. Solana maintains a high staking rate of 65%, which is strong compared to other networks. Currently, approximately 380 million SOL tokens are staked, with significant movement observed between different epochs.

Stake rewards measured by inflation rate

stake收益计算 The staking yield is influenced by the inflation rate, the online time of the validating Node, the commission rate, and the proportion of SOL staked. The calculation formula is:

Cost destruction and deflation factors: The costs of Money Laundering, slashing penalties, and other user-related losses have had a certain impact on deflation, although the scale is small. In March 2024, the peak of fee destruction accounted for 7.8% of the staking reward, but has recently averaged down to 3.2%. After the implementation of SIMD-96, the impact of these fee destructions will become negligible. Although slashing penalties may occur, they are rare and currently not a significant deflationary factor.

Taxation and Market Impact: In many jurisdictions, receiving inflation rewards may be considered a taxable event, which may lead to dumping pressure for stakers to pay taxes. In addition, PoS inflation can exert continued downward pressure on the price of SOL, affecting its fair price comparison and network economy.

Dependency of Validators' Income and Inflation: Traditionally, validators have relied on inflation commissions, but recently, the rise of alternative sources of income such as MEV (maximal extractable value) and Block Reward has provided validators with new sustainable income paths. However, the long-term sustainability of these alternative sources of income is still uncertain.

Inflation Parameters and Scenario Analysis (with the help of Helius）：

Solana's inflation rate is currently guided by an initial inflation rate of 8%, a deflation rate of -15%, and a long-term inflation rate of 1.5%. As of September 2024, the current inflation rate is approximately 5%, with a total supply of 584 million SOL. Four scenarios have been proposed to explore potential changes:

• Scenario A: doubling the inflation rate from -15% to -30%.
• Scenario B: Halving the long-term inflation rate from 1.5% to 0.75%.
• Scenario C: Immediately reduce the current inflation rate from 5% Halving to 2.5%.
• Scenario D: Halve the current inflation rate, double the deflation rate, and halve the long-term inflation rate.

Impact on supply and price:

In the next eight years:

• Scenario A: Reduce the total supply by 5.3% (to 678 million SOL coins).
• Scenario B: The impact is relatively small, only reducing 100 million SOL.
• Scenario C: Reduce the total supply by 7.3% (to 660 million SOL).
• Scenario D: Reduce the total supply by 12.2% (to 6.29 billion SOL).

Assuming the starting price of SOL is $150 and keeping other variables unchanged:

• Benchmark Scenario : According to the current inflation plan, the price drops by 18.5% to $122.25.
• Scenario A: The price fell 13.93% to $129.10.
• Scenario C : The price dropped by 12.07% to $131.90.
• Scenario D: The price dropped by 7.26% to $139.10.

Architecture

Solana is a high-performance blockchain that focuses on speed, efficiency, and scalability. It supports thousands of transactions per second, with low latency and extremely low costs. The block time is 400 milliseconds, and the cost is only a fraction of a few cents. This report explores the mechanism and architecture of Solana, emphasizing its ability to seamlessly scale and interact within a unified ecosystem.

Programming language Solana is primarily written in Rust for smart contract development because it offers concurrency, memory safety, low-level control, and ensures code security and predictability. While Rust is the main language, Solana supports all LLVM-compatible languages such as C and C++, which attract more developers to participate. For client development, Solana provides SDKs for Java, C#, Python, Go, and Kotlin, supporting communication with the Solana network via JSON RPC API. This diverse language support enhances developer accessibility and flexibility.

Mechanism and Architecture Solana's architecture leverages a unified and composable ecosystem, where all applications are integrated on the same on-chain Block. This design avoids the need for bridges, separate chain IDs, or fragmented Liquidity, enhances user experience, and simplifies interactions between applications. The high performance of the Block chain stems from its full utilization of hardware capabilities, ensuring synchronous expansion of software and hardware.

Solana's transaction processing begins with users submitting transactions to leaders, who compile them into blocks and propagate them to the network for execution and confirmation by other validators. Core protocol changes are managed through Solana Improvement Proposals (SIPs) and undergo community review and voting.

Trade lifecycle In Solana Blockchain, transactions are the only way to change the state. Each transaction or "transaction message" includes a block header, account address, recent blockhash, and instruction. Transactions are atomic, ensuring that all operations in the transaction either succeed completely or fail completely. This structure allows for predefined optimizations through a pre-listed account, promoting conflict-free parallel transaction execution.

Security and Secret Key management Solana uses Ed25519 Elliptic Curve Cryptography to generate Public-Private Key pairs, ensuring strong security and efficient transaction signatures. The wallet generates Secret Key pairs, with the Public Key serving as the on-chain account identifier for Blocks, and the Private Key used for authorization. Transactions are signed using the Private Key to ensure integrity and authenticity, and then verified using the Public Key.

Network Operation Solana adopts a leader-based model, without using a transaction pool (mempool), and processes transactions through the allocation of specific validators as leaders within a fixed time period (400 milliseconds). Validators are selected based on the amount staked and rotate roles according to a predetermined schedule, thereby enhancing the system's Decentralization and security.

The network uses the Stake Weighted Quality of Service (SWQoS) mechanism to prioritize transactions from stake validators, reducing the impact of spam transactions and Sybil Attacks. SWQoS reserves 80% of the leader's processing capacity for transactions routed through stake validators, with the remaining portion allocated to unstaked Nodes.

Enhanced Scalability Some recent expansion solutions, such as SVM Rollups and ZK Compression, are under development with the aim of further enhancing Solana's performance, although these solutions are still in the early adoption stage. The QUIC network protocol adopted by Solana helps with efficient, secure, and scalable transaction message transmission, meeting high throughput demands.

Consensus and Block production Solana's Consensus Mechanism adopts a continuous Block construction pattern, with leaders constructing and broadcasting Blocks in real time within their time slot. This approach reduces latency and optimizes transaction processing. validators' Transaction Processing Units (TPUs) are responsible for Block creation, executing transactions in parallel as much as possible to maximize throughput and efficiency.

Proof of History（PoH）

A detailed description of the Proof of History mechanism can be found in Solana's White Paper.

Solana's Proof of History (PoH) is a type of encryption clock used to achieve network synchronization by establishing a verifiable event sequence. Unlike Proof of Work (PoW) and other Consensus Algorithms, PoH is not used to reach consensus, but rather provides a time reference for validators to order transactions and follow the leader's schedule.

PoH operates by continuously calculating SHA-256 hash chain, with each hash depending on the output of the previous hash. This sequence must be calculated in order to form a "mini Proof of Work". Validators run PoH service to generate these hashes, which are difficult to calculate but can be easily verified by other validators. By embedding transaction data into this hash chain, PoH marks the Timestamp of the transaction, proves the order in which the transaction occurred, and prevents validators from manipulating the Block order.

Mechanism & Function Each Solana validators will continuously run the PoH service, performing hash calculations sequentially to maintain the timestamp of the encryption. When the current leader processes new transactions, these transactions will be combined with the current PoH hash, updating the hash chain, and embedding the transactions in the timestamp timeline. This process ensures that the leader cannot manipulate the time or order of transactions.

In each 400 millisecond Block, the PoH stream contains approximately 800,000 hash and 'tick' that marks the passage of time at intervals of 6.25 milliseconds. These ticks serve as proof of activity and maintain the rhythm of network operations. Even if not acting as leaders, validators still keep their PoH clocks running to synchronize with other parts of the network and ensure compliance with the leader's schedule.

account model Solana's state management relies on an account database called AccountsDB, which is structured as a large key-value store with accountAddress as the key and the corresponding data as the value. Solana accounts can be divided into multiple types.

• User account: Represents individual users with Private Key.
• Data account: stores state information, such as Token balance.
• Program account: Contains the executable bytecode of a specific program.
• Native program account: Perform core network functions.

Solana distinguishes between code and state, where the program account is immutable and the state is stored in a separate account. This separation enables more efficient state management and achieves unique optimizations in the Solana architecture.

Programs on Solana are written in languages like Rust to manipulate account data, but they do not store their own state. Instead, programs interact with Programmable Address (PDA), which is a special account without a Private Key controlled by the program. PDA ensures that only relevant programs can modify the state, enhancing security and controlling state changes in the program.

Rent and account management In order to reduce state bloat, Solana implements a rent mechanism that requires accounts to maintain a minimum balance of SOL. Accounts can be closed when no longer needed, and the rent balance is returned to the user. This approach encourages efficient use of state and avoids unnecessary accounts being kept open indefinitely.

Turbine: Data Transmission Turbine is Solana's data dissemination protocol, inspired by BitTorrent. It breaks transaction data into small data packets called "shreds" and spreads them in a structured way across the network. The shreds are grouped into batches and broadcasted via Turbine trees. Validators are organized in a hierarchy, forwarding the shreds to other validators. This reduces the data burden on leaders and improves the network's ability to efficiently distribute blocks.

Consensus: Tower BFT Solana uses Tower BFT, which is a customized implementation of practical Byzantine fault tolerance Algorithm (PBFT) enhanced with PoH synchronized clocks. Due to the validators' dependency on the pre-set transaction order of PoH rather than multi-round communication, the communication overhead during the Consensus process is reduced. Validators earn points by voting correctly, vote on Blocks, and the system ensures that validators stay on the chosen fork for a certain period of time, reducing the likelihood of fork.

Gossip and Archive Solana's Gossip network serves as the control plane to propagate critical Metadata, ensuring that Nodes can communicate and synchronize states on the network. Archive Nodes store network history, with data stored in Warehouse Nodes to ensure past transactions are accessible.

Economy and Jito Solana's economic model includes inflation-based stake rewards, validators earn SOL by participating in Consensus and generating Blocks. Block rewards include partial destruction and partial rewards to the leaders who generate Blocks. Liquid stake allows SOL holders to stake their Tokens in a pool and receive liquid stake Tokens (LST) that can be traded or used across applications, while also earning stake rewards.

Jito client is widely adopted by Solana validators, it enhances economic incentives by implementing a Block space auction system outside the protocol. In addition to standard Money Laundering, the system also allows for priority processing of transactions by providing 'tips'. This significantly increases rewards for validators and promotes the widespread adoption of the Jito client in the Solana network.

Solana Virtual Machine (SVM)

Solana Virtual Machine (SVM) is an innovative framework designed to manage maximal extractable value (MEV) on-chain in Solana Blocks. MEV refers to the additional value extracted from a Block by reordering, including or excluding transactions. SVM provides the technology and protocol to detect, analyze and manage MEV activities, thereby promoting efficiency, fairness, and security in the Solana ecosystem.

Ether坊Virtual Machine（EVM） vs Solana Virtual Machine（SVM）

There are differences between SVM and Ethereum Virtual Machine (EVM) in Smart Contract execution and transaction processing. In SVM, each validator executes Smart Contract separately, allowing for high transaction throughput. In contrast, EVM requires consensus among nodes before execution, resulting in slower processing speeds. In addition, Solana's parallel processing model can execute multiple transactions simultaneously, while Ethereum's sequential processing model can only process one transaction at a time, making Solana faster and more efficient.

The Purpose and Importance of SVM

SVM aims to prevent the manipulation of transaction ordering and block validation by providing a structured approach, thereby addressing the MEV problem. This is crucial for maintaining the integrity of financial interactions on Solana, protecting users from behaviors such as front running, and enhancing the credibility of the network. Given Solana's high transaction throughput, effective MEV management is crucial in preventing harm to ordinary users from rapid value extraction.

Definition of Solana Virtual Machine

In the Solana ecosystem, people have different views on SVM. Some believe that SVM includes the entire transaction processing flow, including validators runtime and program execution, while others focus on the underlying eBPF Virtual Machine responsible for executing programs. Generally, SVM is understood as an integrated system that involves the Bank component of Agave validators, which is responsible for state management during each slot period. SVM processes transactions in batches, with each batch containing instructions for a specific program and uses caching mechanisms to optimize execution efficiency.

Opportunity for SVM

The decoupling and clear interface of SVM enable it to be applied in a variety of scenarios, beyond the scope of Solana validators, mainly including:

• off-chain service: used for testing and simulation, simulating the transaction processing of Solana off-chain.
• Lightweight Client: Provide fraud proof for lightweight clients to enhance scalability and security.
• State Channels: Use SVM-based State Channels to manage peer-to-peer connections and publish the final result to mainchain.
• Rollups: As the execution layer of Rollups, it enhances scalability without bearing the full cost of the Consensus protocol.
• Avalanche subnet: Integrated with the Avalanche module for Consensus and network connectivity.
• Extend SVM: Customize SVM unit for specific protocol to enhance flexibility. SVM is now available through the solana-svm Rust crate, supporting various applications and driving innovation within the Solana ecosystem.

FTX

However, with the collapse of FTX, Solana has faced significant challenges. FTX is an important entity closely associated with the Solana ecosystem, and its founder, Sam Bankman-Fried (SBF), is a major supporter of Solana, driving projects traditionally associated with the Ethereum ecosystem, such as Serum Decentralized Exchange (DEX), to migrate to Solana. Under SBF's influence, FTX has become one of the world's largest centralized exchanges, further enhancing Solana's reputation. However, due to FTX's misuse of company assets and customer deposits for high-risk investments, it eventually led to its closure, posing a significant risk to the Solana ecosystem associated with FTX.

On September 12, 2023, FTX/Alameda Research unstaked $24 million worth of $SOL, while Solscan data shows that the wallet still holds over $1 billion worth of $SOL, including staked and locked tokens. Despite these challenges, the core developer community that shares the vision of Solana remains committed. Solana is striving to restore the community's trust by focusing on improving network stability, creating a more developer-friendly environment, and addressing technical issues.

Featured projects built on Solana on-chain Block

Solana ecosystem (top ten projects by Market Cap)

• Neon EVM: Neon EVM allows Ethereum applications to run on Solana, providing faster processing speeds, lower costs, and leveraging Solana's parallel processing capabilities.
• Eclipse: An Ethereum Layer 2 solution using the Solana Virtual Machine (SVM) for settlement on Ethereum and ensuring security through zero-knowledge proofs.
• Nitro: A bridge connecting Solana with the Cosmos and IBC ecosystems, enhancing interoperability and liquidity acquisition.
• Wormhole: A cross-chain bridge that enables seamless transfer of assets and messages between multiple blockchains, including Solana.
• Allbridge: Cross-chain bridge that facilitates asset transfers between Solana and other blockchains, enhancing Solana's interoperability.
• LI.FI: A Liquidity aggregation protocol that integrates multiple cross-chain bridges and Decentralized exchange (DEX) aggregators, supporting exchanges across networks.

DePIN

• Helium: A decentralized wireless network that uses Solana to expand support for Internet of Things (IoT) devices and provides an economically efficient connectivity solution.
• Hivemapper: Decentralized mapping network where users contribute real-time road images through their dashcams and receive token rewards.
• Render Network & io.net：A distributed GPU computing network built on Solana for 3D rendering and artificial intelligence tasks, providing scalable and cost-effective computing power.
• IoTeX: A Web3 infrastructure platform that connects smart devices and real-world data to the blockchain, enhancing data accuracy and utility.
• Teleport: A decentralized ride-hailing service platform that uses Solana's blockchain protocol to provide drivers with higher profits and reduce passenger costs.

Decentralized Finance

• Marinade Finance: A liquidity stake platform on Solana that allows users to earn stake rewards by holding Liquidity and mSOL Tokens at the same time.
• Jito: A protocol that optimizes MEV returns through liquid staking and is committed to achieving permissionless operations in the Solana ecosystem.
• Sanctum: Provides liquidity sharing solutions for staked tokens on Solana, promoting seamless interaction and yield generation.
• Drift Protocol：Decentralization trading platform on Solana, providing Spot and Perpetual Contract Trading, supporting real-time price updates.
• Jupiter: Solana's leading DEX aggregator, providing efficient trading paths, limit orders, and perpetual contract trading.
• Zeta Markets: A Decentralization Derivatives trading protocol that supports Options and futures trading on Solana.
• marginfi: A decentralized lending protocol that provides comprehensive financial activities across multiple Solana DeFi protocols.
• Kamino: A DeFi platform that offers strategic financial activities including lending, liquidity provision, and portfolio management.
• Parcl: A real estate investment platform based on data feed tracking house prices.

Others (Non-fungible Token and Meme Token, etc.)

• Magic Eden: The leading Non-fungible Token market on Solana, supporting multi-chain transactions and providing users with a friendly interface and low Money Laundering.
• Tensor: A market designed for professional NFT traders, integrating automated market makers (AMM) and real-time data functions.
• Metaplex: The platform provides tools for creating, selling, and managing digital assets on Solana.
• DRiP: Airdrop platform for emerging artists on Solana, providing affordable minting services and free NFT art minting services.
• TipLink: This lightweight wallet allows for easy transfer of assets via links or QR codes, supporting access to Gmail or Solana accounts.
• Solchat: It is a communication protocol on Solana that supports on-chain messaging and peer-to-peer (P2P) calling and is expected to integrate with Solana's mobile ecosystem.
• Dialect: It is a decentralized messaging protocol that supports token transfers through messaging.
• Mad Lads：The xNon-fungible Token series created by Coral rekindles the vitality of the Solana community by using Non-fungible Tokens as Decentralization applications.
• MonkeDAO: The first NFT DAO on Solana, originated from Solana Monkey Business, dedicated to community-led activities.
• Superteam DAO：The DAO is committed to promoting Solana in emerging markets and supporting innovative projects through community-driven efforts.
• Solana University: This international student organization provides Solana and Web3 educational resources and activities.
• Meme Token: $BONK; $WIF; $POPCAT

Key Metrics (as of September 12, 2024)

SOL/USD - $135.07 (Coordinated Universal Time 06:06; September 12, 2024); Market Cap - $63.3 billion

SOL Market (ranked top five by 24-hour volume; as of September 12, 2024); Data source: coingecko

Total locked value - $8.045 billion

Purple - SOL price; Yellow - SOL daily active Addresses (5.5 million - all-time high)

Purple - SOL price; yellow - SOL daily volume

Solana - Financial Statements (Source:tokenterminal）

Top 5 Solana validator Nodes (note: all values are in SOL units; including all stake data, not just active stake data)

Solana DEX volume (USD)

Solana DEX data

Jito verification Node prompt

Link

• Solana Official Website
• Solana White Paper
• Solana Virtual Machine Documentation

Data Source

• CryptoRank
• Blockworks Research
• Solana Compass
• Artemis Analytics
• Helius
• Dune Analytics - Solana Staking
• The Block - Solana on-chain Data

Disclaimer: insights4.vc and its newsletters provide research and information for educational purposes only and should not be construed as professional advice of any kind. We do not advocate for any investment activities, including the purchase, sale, or holding of digital assets. The content reflects the author's views and does not constitute financial advice. Before participating in Cryptocurrency, Decentralized Finance, Non-fungible Token, Web 3, or related technologies, please conduct your own due diligence, as these areas involve high risk and significant Fluctuation in value.

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The Pyth Network aims to provide strong support for Decentralized Finance applications and bridge the gap between TradFi and on-chain finance. The launch of Pyth Price Feeds in 2021 marks an important step in this mission. As Decentralized Finance continues to expand, the needs of developers and users are also evolving. The demand for security and reliability in Web3 Capital Market is more urgent than ever for smart contract developers and market participants. Reliability efforts at Pyth

Introducing Oracle Integrity stake - an innovation of Pyth price Oracle Machine, which provides a Decentralization stake reward and penalty mechanism for network participants by strengthening accountability for data sources, thus creating a more secure Decentralized Finance ecosystem.

• Pyth Publisher (data provider) will automatically receive rewards through the Pyth protocol for maintaining high-quality data contributions. If they provide incorrect data, causing negative impact on the protocol, their stake will be reduced. The Pyth DAO can vote on how to handle the reduced funds, such as distributing to affected users or using for other purposes.
• PYTH stakeholders can delegate their stake to Pyth publishers to enhance the potential rewards for providing high-quality data. This helps strengthen the resilience and security of the Pyth Oracle Machine. In return, PYTH stakeholders automatically receive rewards for contributing to the protection of the Oracle Machine network and Decentralized Finance security.

Oracle Integrity Staking covers over 500 price oracles of Pyth, setting a higher standard for the technology and market participants of the Oracle Machine to integrate into the Decentralized Finance ecosystem. This release is an important milestone for Pyth Network in achieving its mission of providing reliable and accurate price data for all blockchains, while also meeting the rising demand for Decentralization and sustainable development.

This article will explore how to enhance the integrity and security of Oracle Machine data through Oracle Integrity Staking, enabling developers to build applications without fear.

The Revolution Brought by Oracle Integrity Staking to Developers

In the field of Oracle Machine, the most pressing challenge is how to provide high-quality and reliable price data in a Trustless manner, covering all assets and blockchains required by developers.

Currently, the available data infrastructure for developers has not been able to provide a sound accountability mechanism to ensure data quality. And existing oracles only provide an on-chain quality control incentive mechanism for relatively secure segments of the market.

At the same time, expanding asset coverage remains a complex challenge for push-type Oracle Machines. Although the pull-type Oracle Machine of PYTH has set a new precedent for quickly expanding price Oracle Machines to new chains, applications using PYTH can still benefit from accessing new, trending, or strategic but yet unpopular assets.

Oracle Integrity 01928374656574839201 through allowing Pyth publishers to be economically responsible for price accuracy and asset coverage, directly addressing data quality and scalability issues.

Price Accuracy

Publishers must stake PYTH Token to be eligible for on-chain rewards, and only when they provide high-quality price data, will they automatically receive rewards.

On the contrary, if the publisher provides incorrect or malicious data, a portion of their stake will be reduced as a penalty. In addition, the Pyth DAO can vote on how to handle the reduced funds, including allocating some or all to users affected by incorrect data, or using the funds to support other purposes of the Pyth Network.

For developers, these results bring greater data trust, allowing them to build without worrying about data integrity and security, and thus to build fearlessly. These safeguards complement the existing reliability practices of the Pyth price Oracle Machine, including on-chain aggregation to exclude abnormal data inputs, and consistency testing for the newly launched Oracle Machine.

Asset Coverage

Oracle Integrity Staking also allows publishers to increase their potential rewards by supporting more symbols (price Oracle Machine). In addition, if publishers start providing data for less popular symbols instead of popular or high liquidity trading pairs that are already supported by many other publishers, their potential rewards will be further increased.

This incentive mechanism makes Pyth a preferred Oracle Machine for smart contract developers when building widely used applications. Regardless of where the development team chooses to build or what type of asset data is needed, Pyth's price Oracle Machine can be expanded to meet these needs.

Protect the Decentralized Finance You Know and Love

The Pyth community also plays a key role in Oracle Integrity Staking, because now PYTH stakers can automatically receive rewards by helping to enhance the security of the Oracle Machine network. By delegating their stake to Pyth publishers, stakers enhance the potential rewards of the publisher, thereby strengthening the resilience and accuracy of the Pyth price Oracle Machine. The stake reward mechanism first rewards the publisher based on data quality, and then distributes rewards to the stakers to recognize their contributions to the network.

This mechanism empowers stakers to provide a unique way for publishers to support more symbols and asset types, while also ensuring high data quality. It is worth noting that the reward and slashing mechanisms of Oracle Integrity Staking not only affect publishers but also impact the stakers who support them. Publishers are responsible for the data they provide to the Oracle Machine, while stakers help strengthen the Oracle Machine network by choosing which publishers to support.

How Oracle Integrity Staking Works

Oracle Integrity Staking allows anyone to participate in protecting Pyth and maintaining the security of the Decentralized Finance ecosystem. The program introduces stake rewards and slashing mechanisms for Decentralization, incentivizing publishers and PYTH holders to stake tokens, thereby strengthening the integrity of the Oracle Machine.

stake reward and reduction mechanism

The core of Oracle Integrity Staking is the staking pool, each of which corresponds to a different publisher. Each participating publisher can stake PYTH Tokens on their own to receive performance rewards for the data they publish. PYTH stakeholders - the members of the Pyth community - choose the publishers they want to support and can stake PYTH Tokens in any publisher's staking pool, helping to secure the Oracle Machine network.

The total reward generated by a staking pool depends on the total token amount staked in the pool (including the stake of the issuer and stakers). As the total stake amount increases, the reward amount will also increase correspondingly until it reaches a limit called the stake limit. Issuers can increase their stake limit by supporting more symbols. In turn, stakers can incentivize issuers to support more symbols by choosing to stake more with the issuers who support more important symbols to the ecosystem. The rewards will be automatically distributed between the issuer and stakers, first to the issuer, and the remaining portion will be allocated to the stakers.

Pyth DAO has set the annual maximum reward rate for the staking pool to strike a balance between sustainability and effective participation. The current reward rate is 10%, but it can be adjusted by Pyth DAO. The maximum reward rate will be reached when the total stake in the staking pool is below the stake cap. However, the total reward amount cannot exceed the maximum reward rate multiplied by the stake cap; this means that if it exceeds the stake cap, stakers will receive a lower reward rate.

This arrangement incentivizes stakeholders to carefully evaluate the complete list of all publishers in the network when deciding which publisher to stake in order to help protect the Oracle Machine network. To learn more about the reward calculation, please refer to the relevant document.

In summary, the rewards for Oracle Integrity Staking are determined by multiple key factors, which can be adjusted by Pyth DAO:

• Stake Limit: This is the maximum number of Tokens that can be staked by the issuer (including the issuer itself and additional stakers) and qualify for rewards. A higher stake limit allows the issuer to attract more stakers and increase the nominal rewards of the staking pool.
• The number of supported symbols by the issuer: The issuer can support more symbols to increase its stake limit, thereby obtaining higher potential rewards. These additional rewards compensate for the increased risk of holding more symbols.
• Highest Reward Rate: DAO sets the maximum reward rate that can be obtained in the staking pool, calculated in Annual Percentage Rate (APY). While a higher maximum reward rate can increase the potential total earnings for participants, DAO needs to carefully manage this parameter to maintain a balance between incentivizing participation and ensuring the long-term sustainability of Oracle Integrity Staking and Pyth Network.
• Commission: The publisher charges stakers in the staking pool a fixed percentage of the reward (currently 20%) as a commission, which is the net reward after deducting any slashing amount. DAO can vote to adjust this fee rate and structure.
• Reduction Mechanism: If the data provided by a group of publishers does not meet the standards, both the publishers and the stakers who support them may face reduction penalties. This shared responsibility model encourages stakers to carefully evaluate publishers and promotes a culture of accountability throughout the network. Currently, the upper limit of the reduction mechanism is 5% of the total staked amount, and this ratio can be adjusted by the Pyth DAO. The DAO can also vote on how the reduced tokens should be used, including whether to allocate them to affected users or for other purposes supporting the Pyth Network.

How do stakers participate?

PYTH stakers play a crucial role in Oracle Integrity Staking by enhancing the security and data integrity of the Oracle Machine through staking Tokens to the publisher.

To get started, anyone holding unlocked PYTH Tokens can access the Pyth Staking Dashboard and navigate to the Oracle Integrity Staking program. Eligible participants* can start exploring the list of publishers and choose the ones they wish to support, helping to ensure the security of the Oracle Machine network.

Stakers can rank and evaluate publishers based on pool composition, publisher quality ranking, the number of price Oracle Machines supported by the publisher, or other criteria that are most important to them. Once ready, stakers can stake Tokens in the staking pool of any publisher. These Tokens will enter a warm-up period before being officially staked and helping to ensure the integrity of the Oracle Machine. Stakers can manage their stake allocation among different publishers based on personal preferences and strategies for maintaining the integrity of the Oracle Machine network.

PYTH holders who have staked Tokens to Pyth governance will see these Tokens in the Oracle Integrity Staking program and can directly stake them to the issuer without having to withdraw them to their Wallet first.

Finally, participants can simultaneously stake the same Token to the Oracle Integrity Staking plan and the Pyth governance plan, ensuring the security of the Oracle Machine and obtaining the voting rights for Pyth improvement proposals. Participants can also choose to only stake in the Pyth governance without participating in the Oracle Integrity Staking.

Pyth DAO plays the role

Pyth DAO is responsible for determining and managing the parameters of Oracle Integrity Staking, such as stake limit, delegation fee, reduction amount, etc. These parameters ensure that the incentive mechanism remains consistent with maintaining high data standards. The current parameter settings can be found in the documentation.

Pyth DAO is also responsible for overseeing the important updates of stake and slashing mechanisms, such as determining the sources of rewards for issuers and stakers. To kickstart this initiative, the Pyth Data Association has allocated 1 billion unlocked Tokens. Pyth DAO can vote to decide on additional sources of rewards, such as on-chain income generated by the Pyth Oracle Machine.

In addition, Pyth DAO can also vote on how to handle Tokens that have been reduced due to the provider's provision of incorrect data. Although the reduced Tokens will automatically return to the DAO treasury, Pyth DAO can allocate these Tokens to the affected parties due to data errors or for other purposes allowed by DAO governance through voting.

DAO can also change the reward structure, such as incorporating other digital asset as rewards, allowing broader stake participation, thereby further enhancing the security and coverage of Oracle Machine.

Through these responsibilities, Pyth DAO empowers the community to shape the future of Oracle Integrity Staking, ensuring the continued resilience and scalability of the Pyth Network.

Price Oracle Machine V3 and Future Development

In Decentralized Finance (DeFi), the reliability and accuracy of Oracle Machine data are crucial. As more funds flow into the blockchain ecosystem, the risk of inaccurate or manipulated data is also increasing.

While the existing reliability measures for Pyth's price Oracle Machine are crucial for maintaining the current Decentralized Finance, the evolving Decentralized Finance requires more advanced security mechanisms. Therefore, using cryptographic economics to secure price data is the logical next step for the price Oracle Machine.

Pyth Network first launched the Price Oracle Machine V1 on Solana, providing high-frequency on-chain data from primary sources. With Solana's high speed, Pyth sets a new standard for reliable data delivery. With the launch of Price Oracle Machine V2, Pyth becomes the first pull-based Oracle Machine, expanding its influence to multiple blockchain ecosystems such as EVM, Move, Cosmos, and BTC, providing developers with high-quality, low-latency price data on any on-chain.

Oracle Integrity Staking unlocked the price Oracle Machine V3, which is a major improvement of the Pyth price Oracle Machine, introducing accountability mechanisms for each data source. The core component of V3 is enabled through Oracle Integrity Staking, allowing Web3 developers to build without fear of inaccurate data or malicious tampering.

Oracle Integrity Staking introduces a new paradigm in the field of Oracle Machine, which proactively prioritizes the responsibility of data sources and the protection of the entire data Supply Chain, setting higher industry standards for price Oracle Machine.

So far, Pyth Network is the only data infrastructure solution that provides this level of data accountability and security, covering all of its existing Oracle Machines, from the most commonly used price Oracle Machines to long-tail assets with low liquidity. The integrity stake of the Oracle Machine ensures that every price Oracle Machine is secure, every user is protected, and every publisher is responsible.

Pyth Network is redefining the future of Decentralized Finance. No matter which ecosystem you come from or how you choose to contribute, you are welcome to join this journey of change and create history together.

Statement:

1. This article is reproduced from[Medium], the copyright belongs to the original author [Penny Lu]. If you have any objections to the reprint, please contact the Gate Learn team, and the team will handle it as soon as possible according to the relevant process.
2. Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
3. Other language versions of the article are translated by the Gate Learn team. Without mentioning Gate.io, it is forbidden to copy, disseminate or plagiarize the translated article.

Summary

• BTC and ETH performed strongly, with a 3.19% and 2.01% increase in the past 24 hours, respectively. Currently, the price is testing the resistance level at $66,000.
• The total net inflow of Bitcoin spot ETF in the United States yesterday was 3.66 billion US dollars, and the total net outflow of Ethereum spot ETF in the United States was 680,000 US dollars.
• Many altcoins have outperformed the broader market, especially Cross-chain Communication, BRC-20, and Dog meme coin sectors.
• XION and Sei Network Integration: Driving Innovation in Cross-Chain Interoperability and User Experience
• Avalanche launches a $40 million grant program paving the way for 'Avalanche9000' upgrade.
• The US Department of Justice's lawsuit against Tornado Cash developers will enter the trial phase.
• In the past 24 hours, only 1 project in the DEPIN sector announced that it has received a financing of $10.8 million.

Market Commentary

According to gate market data, as of 4:00 on September 27 (UTC+0) [1]:

• BTC —— The price of BTC has risen by 3.19% in the past 24 hours, and the current price is $65,169, with the highest price in the past 24 hours being $65,807 and the lowest price being $62,677. Currently, it is testing the $66,000 resistance level. If it can break through with volume, the next target will be the $70,000 resistance level.【2】

• ETH - ETH price rose by 2.01% in the past 24 hours, currently priced at $2,632, with a 24-hour high of $2,666 and a low of $2,560. Although ETH is also in a rising channel, its trend is weaker compared to BTC, currently oscillating at a high level.【3】

• SOL - The price of SOL has risen by 5.11% in the past 24 hours, and the current price is 156 US dollars. The highest price in the past 24 hours was 158 US dollars, and the lowest price was 147 US dollars. The main resistance level for SOL is at 162 US dollars, showing strong performance, and is expected to continue to challenge the upper resistance level in the short term.【4】
• ETF - According to SoSoValue data, the total net inflow of Bitcoin spot ETF in the United States on September 26 was 366 million US dollars [5], and the total net outflow of Ethereum spot ETF in the United States was 680,000 US dollars [6]
• Altcoins - performed well under the rise of Bitcoin, with most altcoins outperforming the market. Among them, Cross-chain Communication, BRC-20, and Dog Meme Plate rose by 13.6%, 12.6%, and 12.6% respectively. [7]
• U.S. three major indexes - the S&P 500 rose 0.40%, the NASDAQ rose 0.60%, and the Dow Jones rose 0.62%. 【8】
• Spot Gold - The spot gold price is $2,670.35 per ounce, down 0.08% intraday.[9]
• Fear and Greed Index - The Fear and Greed Index is at 61, reaching a new high in the past month, indicating a greedy market sentiment. BTC price has rebounded in the past 24 hours, and the market sentiment has become more optimistic, strengthening investors' confidence in encryption currencies. 【10】

Popular Tokens

According to the gate market data, combined with the volume and price performance in the past 24 hours, the popular altcoins are as follows:

REEF - The daily increase is about 32.5%, with a circulating market value of 129 million US dollars.

Reef Reef is a fast and scalable L1 blockchain built for Decentralized Finance, Non-fungible Token, and Gaming. The ecosystem projects include Sqwid, Klever, Hypersign, etc. The investors include NGC Ventures, LD Capital, etc.

Reef's recent collaboration with Pigmo has expanded its presence in the blockchain Gamblefi sector, attracting more industry attention. In addition, Reef's support and empowerment of developers has been reflected, and its collaboration with ViaLabs further consolidates the value of the Reef chain. These strategic partnerships may be important factors driving its price surge in a single day. [11]

MYRIA —— The daily increase is about 28.0%, with a market capitalization of 94.28 million U.S. dollars.

Myria is a ZK roll-up technology L2 scaling solution based on Ethereum, supporting high-speed, gas-free transaction experience for digital assets and Non-fungible Tokens. There are already more than 270 projects and 500,000 users in the ecosystem, continuously driving the growth and innovation of the platform.

Recently, the Myria team shared their upcoming mobile game '360 Cricket' and its Web 3.0 technology integration plan during an AMA, sparking market interest in the platform. With the release of a new Non-fungible Token series and PvP mode updates, market expectations for the Myria ecosystem have increased significantly, which may be an important driving factor for this price increase. 【12】【13】

XEC - Up approximately 20.1% in a single day, with a circulating market value of 30.25 million US dollars.

eCash is a blockchain project designed for global scalability. Recently launched multiple technology upgrades further enhance its network performance and user experience.

Through the Avalanche pre-consensus mechanism, eCash achieves almost instant transaction finality, while the "Regular Heartbeat" upgrade optimizes block time consistency and combats "mining switching" behavior. In addition, eCash introduces customizable and tradable usernames, as well as the eCash Agora platform, which helps creators tokenize and monetize non-fungible tokens on its network. These innovative features, along with the improvement of developer tools, may be important factors driving the rise in XEC price. [14][15]

Highlights Data

Bitcoin ETF saw a net inflow of 366 million US dollars yesterday According to Sosovalue data, the net inflow of Bitcoin spot ETF in the United States yesterday (September 26) was 366 million US dollars, with a total daily trading volume of 2.43 billion US dollars. The cumulative net inflow amount is 18.31 billion US dollars, and the total value of BTC managed by the ETF is 60.03 billion US dollars, accounting for 4.70% of the total market capitalization.

Ethereum ETF net outflow of $680,000 yesterday According to Sosovalue data, the US Ethereum spot ETF had a net outflow of $680,000 yesterday (September 26), with a total daily trading volume of $257 million. The cumulative net inflow amount is $582 million, and the total value of ETH managed by the ETF is $7.22 billion, accounting for 2.28% of the total market capitalization.

Funding Rate, Long/Short Ratio, Liquidation Volume, Bitcoin Bid/Ask Ratio According to Coinglass data, as of 4:00 on September 27th (UTC+0), the Bitcoin holding weighted funding rate is 0.0072%【16】, and the Ethereum holding weighted funding rate is 0.0069%【17】. In the past 24 hours, the overall Bitcoin contract long/short ratio is mainly short, while the Ethereum contract is mainly long, leading to a divergence【18】. The total contract liquidation amount across the network in the past 24 hours is approximately 142 million US dollars, with short liquidation contracts exceeding 94.76 million US dollars【19】.

South Korea's Bitcoin premium index hits a new low of -1.16 in a year, with market sentiment shifting towards altcoins

This change may be related to the expectation of a rate cut in the United States and the market's interest in other encryption currencies. Investors are looking for alternative assets to generate returns in the current environment, so they are turning to altcoins as a popular choice. This trend shows a change in market participants' risk appetite, reflecting a weakening confidence in Bitcoin and a pursuit of higher-risk assets. As the market dynamics change, more investors may reassess their asset allocations in the coming months. [20]

Hotspot Review

XION and SEI network integration: driving innovation in cross-chain interoperability and user experience XION is integrating the Sei network into its high-speed multi-virtual machine ecosystem, introducing chain abstraction technology. This integration combines the high-performance environment built by Sei for developers and XION's user-centric Layer 1 blockchain, promoting the development of cross-ecosystem consumer-grade applications. The integration also introduces seamless flow of IBC native assets and accounts, enhancing cross-chain interoperability and expanding XION's chain abstraction solution to a wider range of developers and users. As a high-speed Layer 1 blockchain, SEI has a parallel EVM structure that can process thousands of transactions in just 380 milliseconds. Through this partnership, SEI will gain support from XION's 3.6 million users, further enhancing liquidity and unifying developers across networks. The combination of XION and SEI not only enhances technical capabilities but also solves the problem of user, liquidity, and developer fragmentation in the Web3 ecosystem, accelerating the mainstream adoption of blockchain technology.【21】

Avalanche launches a $40 million grant program to pave the way for the 'Avalanche9000' upgrade The Avalanche Foundation has announced a $40 million grant program aimed at incentivizing developers to create innovative protocols within the blockchain ecosystem. The program, called Retro9000, is strategically designed to attract and support developers working on the Avalanche public chain ahead of the upcoming Avalanche9000 upgrade.

Avalanche9000 is expected to be the largest upgrade of the Avalanche mainnet since its launch in 2020. It aims to make the first-layer blockchain on the Avalanche network more economical, easier to customize, and maintain. The specific date of Avalanche9000 has not been determined, but the testnet will be launched in October. [22]

Vitalik: Robot market-making DEX is a cross-use case of encryption and artificial intelligence with broad prospects On September 27th, Ethereum co-founder Vitalik Buterin posted on social media, 'As I mentioned in my earlier posts this year, the cross-use case of encryption/artificial intelligence has become apparent over the past decade, which is the DEX with robotic market makers. There are many promising approaches to expanding it to prediction markets and arbitration games in DAO.' [23]

The advantages of robot market making are that it can operate 24/7 without being restricted by human operations, ensuring that there are always buyers and sellers in the market, providing continuous liquidity. This solves the problem of liquidity shortage caused by human factors in traditional markets. At the same time, robot market making allows ordinary users to enjoy market making services similar to large institutions, dropping the entry barrier to the trading market and increasing market participation.

The case of the US Department of Justice's lawsuit against Tornado Cash developers will enter the trial phase. On September 27th, the Southern District Court of New York rejected Tornado Cash developer Roman Storm's request to withdraw the criminal lawsuit, stating that his arguments regarding freedom of speech and lack of notice were insufficient to overturn the Department of Justice's reasonable accusations. Currently, Roman Storm's trial is scheduled to begin on December 2nd in New York and is expected to last two weeks. If convicted on all three charges, he could face a maximum of 45 years in prison.

Tornado Cash is an Ethereum mixing protocol that provides anonymous transaction functionality, but due to its widespread use in money laundering and other illegal activities, it faces serious legal risks and regulatory pressures. Previously, in August of last year, Roman Storm and Roman Semenov were accused of conspiring to launder money and violating relevant regulations. Since its launch in 2019, Tornado Cash has been sanctioned and legally prosecuted multiple times for its use in money laundering, key events including the indictment of its developers, the deletion of project code, and the arrest of co-founders, ultimately leading to multiple legal and policy issues related to encryption currencies.

The legal compliance issues of Tornado Cash have had a profound impact on future encryption projects, mainly manifested in the balance between privacy and compliance. The project needs to find new solutions between providing privacy protection and complying with regulatory requirements, and may introduce optional KYC procedures to meet compliance needs. How to balance the native anonymity of encryption with market compliance is a crucial consideration for future encryption market projects.

Financing Information

According to RootData statistics, only 1 project publicly announced financing in the past 24 hours, with a financing amount of $10.8 million, involving the DEPIN sector: [24]

Mawari - Completed a strategic financing of $10.8 million, with investors including Borderless Capital, 1kx, Lead, and Blockchange. Mawari Network is a Decentralization 3D and XR content delivery platform, planning to launch on the Solana mainnet in the first quarter of 2025 and will conduct a node license sale in the fourth quarter of this year to expand infrastructure. It breaks the bottleneck of real-time rendering infrastructure supply and the lack of local computing power on XR devices. The project achieves this by orchestrating a Decentralization network consisting of GPU-driven nodes running the Mawari engine. The Mawari engine is a proprietary technology stack that can render interactive 3D content and efficiently stream it in real time to a large number of mobile XR devices.

Airdrop opportunity

WalletConnect WalletConnect project announced Airdrop WCT tokens on September 24, which are an important part of the WalletConnect network, driving the on-chain user experience (UX) ecosystem. WCT supports network functionality, empowering users, applications, and wallet communities to drive a better on-chain future through shared incentives. Users holding WCT can actively participate in governance and project upgrades.【25】

The WCT Airdrop aims to reward users and builders who have contributed to the development of the network, Web3, and the on-chain user experience. The registration for Season 1 Airdrop will start on September 24, 2024 and end on October 18. The eligibility audit results will be announced in November. The first season Airdrop will distribute 50 million WCT, which is 5% of the initial total supply.

Registration Steps:

1. Visit the Airdrop registration page, https://airdrop.walletconnect.network/
2. Click 'Register here', accept the terms, and connect an Ethereum wallet Address. It is recommended to use WalletConnect for connection to ensure data integrity.

WalletConnect is moving towards a fully Decentralization network and is expected to be achieved by 2025. The WCT token will be launched in 2024, and transferability will be opened shortly after.

> Hint: Airdrop plans and participation methods may be updated at any time. Users are advised to follow the official channels of WalletConnect for the latest information. At the same time, users should participate with caution, be aware of the risks, and conduct thorough research before participating. gate does not guarantee the distribution of subsequent Airdrop rewards.

Reference:

1. Gate.io, https://www.gate.io/price
2. Gate.io, https://www.gate.io/trade/BTC_USDT
3. Gate.io, https://www.gate.io/trade/ETH_USDT
4. Gate.io, https://www.gate.io/zh/trade/SOL_USDT
5. SoSoValue, https://sosovalue.xyz/assets/etf/us-btc-spot
6. SoSoValue, https://sosovalue.xyz/assets/etf/us-eth-spot
7. CoinGecko, https://www.coingecko.com/en/categories
8. Yahoo Finance, https://finance.yahoo.com/markets/
9. Investing, https://www.investing.com/currencies/xau-usd
10. gate https://www.gate.io/zh/bigdata/homeindex
11. Gate.io, https://www.gate.io/trade/REEF_USDT
12. MYRIA, https://medium.com/myria-official/ama-recap-360-cricket-is-in-full-swing-db495e6fa8f7
13. Gate.io, https://www.gate.io/trade/MYRIA_USDT
14. eCash, https://x.com/eCashOfficial/status/1834419353481105566
15. Gate.io, https://www.gate.io/trade/XEC_USDT
16. CoinGlass, https://www.coinglass.com/pro/AvgFunding/BTC
17. CoinGlass, https://www.coinglass.com/pro/AvgFunding/ETH
18. CoinGlass, https://www.coinglass.com/LongShortRatio
19. CoinGlass, https://www.coinglass.com/LiquidationData
20. Cryptoquant, https://cryptoquant.com
21. XION, https://x.com/burnt_xion/status/1839323542648996071
22. Avalanch, https://www.coindesk.com
23. X, https://x.com/VitalikButerin/status/1839497176877085159
24. Rootdata, https://www.rootdata.com/Fundraising
25. WalletConnect, https://walletconnect.network/blog/connect-token-airdrop

Gate Research Institute Gate Research Institute is a comprehensive blockchain and encryption currency research platform, providing Depth content to readers, including technical analysis, hot spot insights, market reviews, industry research, trend forecasts, and macroeconomic policy analysis.

Click link to go now.

Disclaimer Investment in the encryption currency market involves high risks. It is recommended that users conduct independent research and fully understand the nature of the assets and products purchased before making any investment decisions. Gate.io is not responsible for any losses or damages caused by such investment decisions.

Preface

This report delves into the evolution of the Cryptocurrency market, focusing on the diversified development of token issuance methods and types. It analyzes the current status and future trends of the encryption market. By reviewing historical issuance methods and analyzing different token issuance models, combined with the current market situation, it presents a complete picture of the encryption market to readers.

1. Evolution of issuance methods

In the field of Cryptocurrency, technological innovation is gradually lowering the threshold for asset issuance. Initially, the issuance of Cryptocurrency mainly relied on intensive computing resources for "Mining". With the emergence of ICO (Initial Token issuance) and IEO (Initial Exchange Offerings), project party needs to have certain capital and industry background. The popularization of Liquidity Mining enables long-tail assets to be cold started, and Decentralization projects are gradually emerging. Nowadays, the rise of platforms for one-click coin launch has greatly simplified the process of Token issuance, enabling individuals and small teams to easily carry out asset issuance.

1.1 Diversification of Token Issuance Methods

With the advancement of blockchain technology, the issuance of Tokens has become increasingly diverse and has significantly dropped the technical barriers, allowing users without technical backgrounds to easily participate in Token issuance. These methods are tailored to the needs of different projects and market environments. Here are several common Token issuance methods:

1. Mining (Fari Mining) This is the most common way of Token issuance in the early days, where users earn Token rewards by providing Computing Power to the network and mining new Blocks. BTC (Bitcoin) is the most representative project.

2. Crowdfundingissuance Including Initial Coin Offerings (ICO), Initial Exchange Offerings (IEO), and Initial Decentralized Offerings (IDO). The project party pre-sells tokens to raise development funds.

ICO is the earliest form of Crowdfundingissuance, reaching its peak between 2014 and 2018, with a total fundraising of over 56 billion U.S. dollars, but gradually waning due to regulatory and supervisory issues.

In 2019, IEO emerged as a new financing model, endorsed by well-known Centralized Exchanges, which enhanced project credibility.

With the rise of Decentralized Finance, IDO launched by Decentralizationexchange has quickly gained popularity with its community-driven and Decentralization features, becoming one of the mainstream ways to launch coins in 2021, with a total financing amount exceeding 130 billion US dollars.

3. Liquidity Mining（Liquidity Mining） Users provide Liquidity to the Decentralization trading platform and receive Token rewards. The 2020 Decentralized Finance Summer craze has made Liquidity Mining one of the popular ways of Token issuance, not only enhancing Token Liquidity but also creating new revenue channels for users. Compound pioneered Liquidity Mining, leading to a significant rise in its user base and TVL.

4. Airdrop (Airdrop) The project party distributes Tokens for free to early supporters or specific user groups as a marketing or reward strategy. Airdrop not only helps the project gain popularity but also incentivizes users to participate in the community and project governance. A well-known project, Uniswap, distributed Tokens to early users through Airdrop in 2020, becoming a successful case. Blur pioneered the use of a points system, and Pendle introduced the interest separation gameplay of Decentralized Finance, which led to the birth of the PointFi zone.

5. One-click launch coin (OCTD) In recent years, emerging methods such as inscription, minting, and Pump.Fun's coin issuance, through simple tools or smart contracts, allow users to quickly create customized tokens and conduct transactions without complex operations. This approach greatly lowers the threshold for issuing tokens and promotes the rise of Meme culture.

Figure 1: History of issuance and market cap for different types of cryptocurrencies

With the rise of the Decentralized Finance ecosystem, one-click launch coin platforms like Pump.Fun have simplified the process of token issuance with low cost and automated processes, significantly reducing the threshold for Token issuance. These developments reflect the market's demand for efficient, flexible, and decentralized issuance methods, providing project parties and investors with more financing and participation opportunities.

Figure 2: Number and fundraising amount (in USD) of different token issuance methods

1.2 The number of Token issuances has increased significantly in recent years

With the drop in the issuance threshold of assets, the number of newly added Tokens in the Crypto Assets has experienced an explosive rise from 25 in 2013 to 13,453 in 2024. Especially since 2020, the average annual growth rate has exceeded 150%.

This rise is mainly attributed to the popularity of the ERC-20 token standard, the rise of decentralized finance, the popularity of non-fungible tokens, the emergence of new blockchain platforms, and the rapid expansion of the encryption ecosystem. At the same time, the standardization of technology, the widespread application of smart contracts, the emergence of one-click launch coin platforms (such as Pump.Fun), etc., have further lowered the threshold for coin issuance, prompting more projects and communities to improve their visibility and attractiveness through token issuance.

Figure 3: Number of new Tokens listed on CoinGecko each year

Despite platforms like CoinGecko providing data on new Tokens, the actual issuance of Tokens far exceeds these statistics. In 2024, the number of new Tokens surpassed 2.52 million, showing an explosive rise since 2020. This not only highlights the activity of the crypto market but also underscores the increasing importance of Tokens in project development.

Figure 4: The annual issuance of new Tokens (including the Solana ecosystem and Pump.Fun)

2. In-depth Analysis of Different Token Issuance Methods

The evolution of Cryptocurrency issuance models reflects the emphasis on community participation and fairness. From the initial Mining issuance to community-driven models, and now to mechanisms such as IDO and Token Airdrop, the role of the community in the Cryptocurrency ecosystem is becoming increasingly prominent. For example, DOGE has promoted its value rise by strengthening its community culture and values, demonstrating not only the key role of the community in driving project success, but also the importance of community-driven models in the development of Cryptocurrencies.

IDO and Airdrop and other new issuance mechanisms further promote the Decentralization of Token distribution, enabling a wider range of users to participate in the early development of the project. This not only enhances the fairness and transparency of the project, but also reflects the Cryptocurrency industry's pursuit of democratic and inclusive values, as well as demonstrating the innovation and adaptability of Cryptocurrency.

2.1 Miningissuance: The main issuance method in the early era of clone coins

In the early development of the Blockchain, most altcoins were Cryptocurrency projects based on BTC code with modifications, such as Litecoin, Feathercoin, Namecoin, Dogecoin, and Primecoin. The fair Mining issuance model of the altcoin era originated from BTC, relying on Computing Power competition to distribute Tokens, which was the main issuance method in the early stages of the encryption market. Token distribution through Decentralization Mining allows participants to compete for new minted Token rewards using computational resources, providing security for the Blockchain network and creating a relatively fair Token distribution mechanism. Today, a few altcoins like Litecoin and Dogecoin still hold an important position in the Cryptocurrency market as representative projects of early AltCoins.

Figure 5: Market Cap (USD) of early clone coin issuances

2.2 ICO Craze: EOS and other star projects rise

ICO (Initial Coin Offering) is an innovative financing method for blockchain projects, similar to IPO in the stock market. The blockchain project team raises funds from the public by issuing tokens through the internet with the help of White Paper. Since the first ICO of Mastercoin (Omni) in 2013, this model has developed rapidly. In 2014, Ethereum raised about 18 million US dollars through ICO; in 2015, The DAO project raised as much as 150 million US dollars. In 2017, ICO experienced explosive growth, and the EOS project raised nearly 4.2 billion US dollars within a year, becoming the pinnacle of ICO. However, with the security and compliance issues gradually emerging after The DAO suffered a hacker attack in 2016 and China's ban on ICO in 2017, the ICO frenzy has cooled down.

Figure 6: Amount of funds raised (in USD) during major ICO token issuance

2.3 IDO Era: Enhancing the Degree of Token Issuance Decentralization

In June 2019, Binance DEX, the first Centralized Exchange, launched the first IDO project, marking an innovation in the fundraising model of Crypto Assets. Before the emergence of IDO, IEO (Initial Exchange Offering) was popular as a semi-centralized fundraising method. Under the IEO model, the Cryptocurrency exchange is responsible for project review and selection, as well as Token sales and trading on its platform, which enhances project credibility and accelerates the listing process. In 2019, IEO became a popular fundraising avenue after ICO. However, due to the requirement for investors to complete KYC on the centralized exchange and the reliance on centralized platforms for Token subscription, the centralized nature of IEO has also caused some users to be dissatisfied.

In response to this, IDO (Initial DEX Offering) emerged. This emerging Token issuance method achieves freedom of unlicensed financing by conducting Token issuance and trading through Decentralized exchanges (DEXs), such as Uniswap. In IDO, the project party or community can independently deploy Liquidity on the DEX, bypassing the review of centralized exchanges. This enables investors to directly purchase Tokens in the early stage of the project, enhancing flexibility and transparency of participation and dropping centralized risks. IDO provides a broader financing platform for small-scale investors and innovative projects, promoting further Decentralization of the Cryptocurrency ecosystem.

Figure 7: Amount of funds raised during main IDO token issuance (in USD)

2.4 LiquidityMining: Accelerating the Development of Decentralized Finance Ecosystem

In 2020, the 'Decentralized Finance Summer' boom has propelled Liquidity Mining to the forefront of coin launching. Liquidity Mining (also known as Yield Farming) is an innovative financing model in the Decentralized Finance field that allows users to invest in Liquidity pools supported by Smart Contracts and earn returns. This model originated from IDEX's attempt in 2017, was further developed by Synthetix in 2019, and achieved great success in June 2020 with the distribution of the governance token COMP by the Compound protocol, increasing its Total Value Locked (TVL) nearly tenfold in the following five months, becoming a key catalyst for the rise of Decentralized Finance. Other projects in Decentralized Finance (such as Uniswap) have quickly followed this successful example, promoting the flourishing development of the entire Decentralized Finance ecosystem.

Figure 8: Compound TVL rise trend

Figure 9: Uniswap TVL rise trend

2.5 Airdrop Incentive Token: Airdrop draw attention effect is hot

Since 2020, many blockchain projects have adopted the Airdrop strategy to motivate users to expand their impact. The earliest Cryptocurrency Airdrop dates back to 2014, when programmer Baldur Friggjar Odinsson Airdropped AuroraCoin to Iceland citizens. However, the turning point for Airdrop to become a mainstream token distribution method came in 2020, when Uniswap responded to Sushiswap's competitive large-scale Airdrop, and qualified users received at least $1,000 worth of UNI tokens. This strategy not only attracted a large number of users, but also drove the rise of "Decentralized Finance Summer". Since then, projects such as DYDX and ICP have also incorporated the Airdrop strategy into their Token economic models. As a result, Airdrop has become a powerful tool for Web3 projects to attract users, increase awareness, and realize Token Decentralization distribution, and lay the foundation for future applications such as GameFi and SocialFi.

Figure 10: Launch Market Cap of Popular Airdrop Projects

2.6 Community-driven issuance: Community culture drives Token value

In December 2013, DOGE (Dogecoin) was born, and community culture became the core driving force behind its value. This project, which initially satirized cryptocurrency speculation, not only gained popularity for its humorous brand image, but also stood out with its strong community cohesion. The DOGE community has won widespread follow by sponsoring charitable activities such as the Jamaican bobsled team and the clean water project in Kenya. These initiatives not only enhance the project's visibility, but also demonstrate the crucial role of community culture in the value of cryptocurrency. DOGE's innovative model ingeniously combines entertainment with investment, providing inspiration for subsequent meme coins such as Shib, Pepe, and Bonk, and has a profound impact on the development of meme community culture and community-driven tokens.

Figure 11: Total Market Cap of MEME Zone Changes

2.7 One-click launch coin platform: launch coin operation is flexible and convenient

In mid-March 2024, the Solana ecosystem Meme Token represented by BOME sparked a craze, driving the rise of one-click launch coin platforms like Pump.Fun. Pump.Fun is a rapidly growing Memecoin issuance and trading platform in the Solana ecosystem, attracting a large number of users to participate in one-click launch coin. By charging launch coin fees, the platform's income is rapidly rising, with over 10 million USD in revenue within just 3 months. As of August 16th, the platform's total revenue has exceeded 96 million USD, with a daily high of 2.31 million USD, surpassing many mainstream blockchain networks (Base, Arbitrum, BNB, Blast, with daily earnings of less than 1 million USD).

Figure 12: Pump.Fun cumulative income

Figure 13: Daily Earnings of Major Blockchains

3. Token types are diverse: from "digital gold" to MEME craze

With the continuous innovation of blockchain technology and application scenarios, the use cases and types of Tokens are constantly expanding. BTC, as the earliest Cryptocurrency, is mainly used for value storage and transactions, while ETH has expanded the application scope of Tokens through Smart Contracts. In recent years, with the rise of Decentralized Finance (DeFi), the functions of Tokens have become increasingly diversified, giving rise to stablecoins, governance tokens, Non-fungible Tokens (NFTs) for digital art, GameFi Tokens combining gaming and finance, SocialFi Tokens combining social and Meme coins for community entertainment. This not only provides investors with more choices but also promotes the prosperity of the crypto market.

3.1 Historical Trends: Popular Concepts Keep Changing with Historical Cycles

In 2009, the Genesis Block of BTC was born, opening a new era in the encryption industry. Subsequently, the Block chain ecosystem has welcomed many innovative concepts, each of which brings unique value and vitality.

In 2013, Bitcoin had its first Halving. Many developers drew on Bitcoin's code for innovation and optimization, ushering in the 'altcoin era.' According to Gate Research Institute, the total market value of early altcoins was about 918 billion dollars.

With the rise of Ethereum (ETH) and other L1 blockchains, as well as the ICO boom in 2015, the market share of BTC has significantly declined.

Since 2017, stablecoins and CEX coins have gradually gained market follow, while the 2020 Decentralized Finance Summer has further promoted emerging cryptocurrency types such as Decentralized Finance, GameFi, and Meme, demonstrating a trend towards currency diversification.

Despite experiencing multiple market cycles, BTC still dominates with a Market Cap share that has remained stable at around 50% from its peak of over 80% in the early days. The current Market Cap has exceeded $1.2 trillion, earning it the nickname "digital gold".

Figure 14: Market Cap Proportion of Different Concept Zones in the Past 10 Years

In December 2013, the Ethereum White Paper was officially released, marking the arrival of the Programmability Block chain era. Ethereum's Smart Contract technology greatly expands the application scenarios of the Block chain, making its Market Cap surpass 340 billion US dollars in 2021, becoming the second largest cryptocurrency after BTC.

In 2017, Stable Coin and centralized exchange (CEX) platform coins developed rapidly with the ICO frenzy. As of now, the Stable Coin Market Cap has exceeded 160 billion US dollars, and the CEX platform coin Market Cap has also exceeded 90 billion US dollars. The influence and recognition of the cryptocurrency market continue to expand globally.

Figure 15: Historical popular concepts zone and their current Market Cap

During the period from 2014 to 2017, the demand for anonymous transactions once drove the rapid development of Privacy Coins such as Monero and Zcash. However, with the increased regulatory efforts by governments, the market share of Privacy Coins has significantly declined since 2018, and early Fork coins and clone coins have gradually faded away as innovative projects emerge.

Due to the surge in activity in Decentralized Finance, Ethereum has seen an increase in usage. However, due to the slow processing speed of the mainchain and high gas fees, Layer 2 solutions have emerged to improve Ethereum's scalability. Currently, the market capitalization of Layer 2 zones has exceeded 17.4 billion US dollars.

Decentralized Finance and GameFi zones have risen rapidly since 2020, with Dapps like Uniswap and AAVE providing new solutions for traditional Financial Services. The Market Cap of the Decentralized Finance zone has reached $732 billion. Projects like Axie Infinity and STEPN have attracted a large number of users and funds through the 'Play to Earn' model, showcasing the potential of blockchain in digital ownership and the virtual world, with the current Market Cap at $43.8 billion.

In 2023, SocialFi and BRC-20 become market focuses, combining blockchain with social media and the expansion of the BTC ecosystem, with a Market Cap exceeding 3.3 billion USD.

Figure 16: Proportion of Market Cap of Different Currencies Trend

Since 2020, the crypto market has gradually shown a trend of segmentation and specialization, with emerging Token appearing like mushrooms after the rain.

The issuance quantity and variety of new Tokens are showing explosive breakthroughs, with MEME, GameFi, Decentralized Finance, and Non-fungible Token becoming the market focus, even maintaining a relatively high proportion during the Bear Market cycle from 2022 to 2023.

MEME Token zone performed the most eye-catching, rising far beyond other tracks, Market Cap has exceeded 400 billion US dollars, reflecting investors' sustained enthusiasm for the field. GameFi, Decentralized Finance, and Non-fungible Token zone have slightly retreated after the peak in 2021.

With the approval of the BTCSpot ETF in 2024, OTC funds are accelerating into the Cryptocurrency market, driving the total Market Cap of encryption to new highs.

Figure 17: The circulation of different currencies rise

3.2 Return to the present: Solana dominates the new coin issuance market share

In 2024, the Meme Token craze swept across multiple public chains, with Solana being particularly prominent. In March, tokens such as Bome and Slerf in the Solana ecosystem became the market focus due to their high return rates. The emergence of platforms like Pump.Fun for one-click coin issuance further lowered the barrier and simplified the process, driving the daily average issuance volume of new coins in the Solana ecosystem to exceed ten thousand. According to Gate Research Institute data, Solana accounts for over 60% of the new coin issuance market, far ahead of other public chains.

Figure 18: Daily New Token Quantity of Major Blocks on-chain in 2024

Apart from Solana, the Base chain has also performed remarkably well this year. Thanks to the support from Coinbase, EIP-4844 dropMoney Laundering, the MEME craze, and other Favourable Information such as the rise of the Farcaster community, the number of users and the activity level in the Base ecosystem have rapidly increased. Since March, the wealth effect of the 'Degen' Tokenbig pump has further boosted the popularity of the Base ecosystem, and the Tokenissuance has surged, making it the second largest public chain in market share this year, with a share of over 20%.

Figure 19: Proportion of daily new token additions on-chain for major blocks in 2024

Summary

The Token issuance methods in the Cryptocurrency market have evolved from Mining, ICO, IEO, IDO, Liquidity Mining to the current one-click launch coin platform, reflecting the pursuit of community participation and fair issuance. Each issuance method has responded to specific market demands and technological developments. The current diverse issuance models provide blockchain projects with a wider range of financing channels, lower the threshold, improve efficiency, and promote the activity of the community ecosystem.

The continuous progress of blockchain technology has fostered the prosperity of the Token economy. From BTC's role as 'digital gold' to the Smart Contract revolution of ETH, and the emergence of diverse functions such as stablecoins, governance tokens, and utility tokens, the application scope of Tokens continues to expand. With the emergence of innovative concepts such as Decentralized Finance, Non-fungible Tokens, GameFi, and SocialFi, the application of blockchain in finance, art, gaming, and social sectors continues to deepen. With the support of high-performance public chain Solana and the one-click launch coin platform, Meme Tokens have become a new favorite in the market due to their enormous appreciation potential, occupying a dominant position in new coin issuance. The diversification of Tokens provides investors with a wider range of choices and accelerates the overall rise of the cryptocurrency market.

This bull run is indeed a bit different, not like the past 'endless internal funds and frequent zone rotation' situation. The market is no longer focused on one direction, the only consensus seems to be 'no dumb buying.' After enduring the long bear market, liquidity in the encryption market was already dry. Finally, when the bull market arrived, instead of a flood, we unexpectedly encountered even more severe liquidity diversion.

As an integral part of the encryption market, the Decentralized Finance sector naturally cannot escape this round of Liquidity curse:

Each protocol's liquidity is scattered, and decentralized exchanges also cannot provide users with the most comprehensive trading experience due to the lack of liquidity.

In the face of the Liquidity dilemma that Decentralized Finance is currently facing, Elixir, a decentralized market maker protocol, has something to say.

Elixir aims to improve the liquidity dilemma in the field of Decentralized Finance through Decentralization, integrating Decentralized Finance protocols to consolidate liquidity and provide users with an efficient, secure, and transparent trading environment.

Elixir has already integrated with over 30 Decentralized Finance protocols and will launch the Mainnet in the second half of this year, while also launching the Decentralized US dollar deUSD.

This article will explore Elixir in detail, helping readers understand how Elixir works with multiple Decentralized Finance protocols through innovative mechanisms and technologies to solve existing Liquidity problems, as well as the mechanism, advantages, and future of Elixir's decentralized dollar deUSD.

Decentralized Finance is not only the struggle, but also the suffering.

As the hub of value exchange in the Decentralized Finance world, the demand for DEXs is becoming increasingly strong in the market. From the initial 'rough and ready as long as it works' to the present 'speed and product experience are indispensable', various DEXs are gradually starting to 'internalize' in order to retain old customers and attract new ones.

As one of the solutions, the decentralized order book, with its excellent Liquidity supply architecture, provides users with a smooth and low-slippage trading experience. In the current environment where on-chain trading experience is increasingly emphasized, the decentralized order book exchange's position in the market is becoming more important.

However, with the market's attention scattered, various Decentralized Finance projects are fighting each other. In this situation of contention, the precious Liquidity in the market is being divided and subdivided. It seems that relying solely on market makers to provide Liquidity is no longer able to meet the smooth trading needs of a large and low Slippage, and it is not easy to effectively integrate the divided Liquidity.

Similarly, for a large number of native Decentralized Finance users, using a Decentralized exchange is not just for trading, but the additional income beyond value exchange is the essence of Decentralized Finance. Although the order book is good, the profits from providing Liquidity are taken away by invited market makers. Many users see the market of Decentralized order book exchanges growing, but they are unable to benefit from it and can only be anxious.

Elixir saw the natural match of dual-end demand, 'protocol needs fundraising, and users need more income growth points,' and found its own position - guiding users' funds to various Decentralized Finance protocols.

Elixir, the master of on-chainLiquidity

How does Elixir perceive market demand?

As a modular DPoS network, Elixir relies on its unique network architecture and Liquidity management Algorithm to open the invisible barrier between on-chain users and Dex. This allows users to directly provide Liquidity to multiple order book Dex, while also providing on-chain users with new financial profit points, enabling every on-chain user to experience the feeling of being a market maker, achieving a win-win situation for the protocol and users.

The original intention and vision of Elixir are very good, and its actual performance is indeed outstanding. Since its launch, Elixir has maintained high-level development and has shown considerable performance in various dimensions.

Since the launch of the Elixir protocol, nearly 200 million US dollars have been deposited into the protocol, with a total of over 261 million transactions processed.

Team Background and Financing

The birth of Elixir, full of imagination, with its keen sense and excellent execution ability, is inseparable from a team of elite individuals who work together.

Founder Philip Forte

Formerly a partner at BlockVenture and an advisor to Solana, Moonbeam, Flow Network, and Magic.

Partner Cole Petersen

Forbes's Decentralized Finance author, investor in 3AC, Neuralink, and 20 other startups.

CTO Chris Gilbert

Former Chief Engineer at Tokensoft and IDEXX.

COO: Tim Wang

Tim Wang has led encryption investments at Hudson River Trading. With over 10 years of TradFi experience, including investment banking at J.P. Morgan, private sale equity business at Lightyear Capital, and venture capital business at Eniac Ventures. Angel invested in more than 30 encryption projects.

At the same time, Elixir's potential to improve the field of Decentralized Finance has long been recognized by the Primary Market: 01928374656574839201

In March 2024, Elixir announced that it has secured $8 million in funding led by Maelstrom Capital and Mysten Labs, with participation from institutions and individuals such as GSR and AmberGroup. Combined with the previously disclosed rounds of funding, the total funding amount reaches $17.6 million.

longer recognized, Elixir's powerful partnership map

Currently, Elixir has partnered and integrated with more than 30 leading DEXs, such as Vertex, RabbitX, Bluefin, Apex, Orderly, etc. Through Elixir, users can provide Liquidity to order book DEX trading pairs. With Elixir LP incentives or LP incentive programs provided by collaborating protocols, LP providers can earn diverse stake rewards.

In the future, Elixir will also integrate with a series of well-known Decentralized Finance protocols such as Pancakeswap, Paradex, Synfutures, and the ecological map of Elixir continues to expand, which is worth looking forward to in the future.

The number of partners does not affect the quality of Elixir's Liquidity supply.

Through excellent Liquidity integration and ecological collaboration capabilities, Elixir has provided a funding capacity of over 1.25 billion US dollars to various order book exchanges, and even provided close to or even more than 50% Liquidity to popular decentralized order book exchanges such as Bluefin, Rabbitx, Orderly Network, and Vertex.

The performance of Elixir so far also proves that its vision of improving Decentralized Finance Liquidity is not just talk. Such impressive data is inseparable from the support of Elixir's unique technical architecture.

Liquidity management is at hand, Elixir has amazing technical advantages

Efficient Liquidity integration cannot be achieved without Elixir's unique and complex network architecture. Elixir's network architecture is divided into off-chain and on-chain systems.

Off-Chain System (Off-Chain)

Firstly, the exchange data source is responsible for obtaining market data from various exchanges. These data sources hold read-only credentials for the exchanges and subscribe to an update stream to obtain real-time market data from the exchanges. The data is then broadcasted to the data aggregator.

The data aggregator collects data from multiple exchange data sources and combines these data into a deterministic data framework. Then the data aggregator signs the data with encryption to ensure the integrity and immutability of the data. Finally, the signed data is broadcasted to validators and audit Nodes.

The validators network operates through the Delegated Proof of Stake (DPoS) mechanism. Validators are responsible for verifying the correctness of the data and need to achieve 66% of the consensus to confirm the validity of the data. End users delegate their stakes to validators, and the validators with the most stakes will receive the largest share of rewards and participate in the consensus. The validators network ensures the system's decentralization and security.

The Relay infrastructure utilizes secure enclaves technology (which will be replaced by Multi-Party Computation (MPC) infrastructure in the long term) to process Secret Keys related to exchanges. The Relay Node checks if the encryption order proposal has obtained 2/3 Consensus, then signs these orders with Secret Keys and sends the signed orders to the exchange. The Relay infrastructure serves as a bridge between off-chain and on-chain systems, ensuring that all transactions are verified and signed.

On-Chain System (On-Chain)

The audit Node receives data frames and order proposals from the data aggregator and Relay Node. The audit Node executes policies to verify the correctness of the order proposals. If a malicious order proposal is detected, the audit Node invokes the on-chain function in the controller for corresponding actions. The audit Node ensures the accuracy of data and transactions.

The controller is a Smart Contract responsible for managing Staking, rewards, and penalties. In the event of a dispute, the controller will check 2/3 Consensus of the active validators and penalize malicious validators. The controller executes on-chain operations through Smart Contracts to ensure the fairness and security of the system.

The Elixir network architecture ensures the efficiency of data processing and the security of transaction verification through the close integration of off-chain and on-chain systems. The validator network achieves decentralization and consensus through the DPoS mechanism, while the Relay infrastructure ensures the integrity and tamper resistance of data and transactions. Audit nodes and controllers provide additional security guarantees and fair execution. Through this multi-layered architecture design, Elixir is able to provide efficient, secure, and reliable services in a decentralized environment.

Figure: Elixir Network Architecture Workflow

At the same time, Elixir uses advanced Algorithm market making technology to manage and optimize Liquidity supply. The main strategies include variants of the infinite Avellaneda-Stoikov Algorithm, which determines quote time through random walks, creating an experience for traders that is almost similar to CEX, and providing the best LP experience for Liquidity Providers.

At the same time, in order to prevent market manipulation and gamification, Elixir introduces random elements in its Algorithm and uses SGX secure enclave to generate random numbers. These random numbers are synchronized among validators through verifiable random functions.

Through a unique network architecture and dual management of AlgorithmLiquidity, Elixir provides an innovative Liquidity supply model, ensuring the liquidity and security of funds while serving as a bridge between different Decentralized Finance projects, enhancing interoperability and Liquidity.

Elixir plans to launch the collateralized synthetic asset DecentralizationUSD (deUSD) in the near future, aiming to further improve the Liquidity situation of partners and increase the returns of Liquidity contributors.

Stable prices and diverse returns, synthetic asset deUSD is worth your follow

As Decentralized Finance becomes an important hub for on-chain prosperity, the importance of synthetic assets is gradually becoming apparent. In the on-chain world, synthetic assets directly anchor the value of other assets, saving users many complicated intermediate steps, as well as the fees and wear and tear of asset exchanges. As a good use case for encryption users to avoid wear and tear, synthetic assets have deeply rooted in the encryption world, and its Market Cap continues to rise, becoming widely recognized in the encryption ecosystem. Various on-chain protocols also regard synthetic assets as an important part of Liquidity source.

Synthesizing dollar-denominated assets can better manage liquidity and coordinate the problem of inadequate interaction between various protocols. Although your Decentralized Finance protocols are different, synthetic dollars, as encryption tokens anchored 1:1 to the value of the dollar, are universally accepted.

Elixir 正是看到synthetic asset对于 Decentralized Finance Liquidity管理的闪光点，即将推出完全抵押的合成美元 deUSD。

Not subject to market Fluctuation, the price stability mechanism of deUSD

Currently deUSD is collateralized by stETH, and will later support a wider range of collateral assets. The impressive aspect of deUSD's design mechanism lies in its use of Delta neutral strategy and dynamically adjusting asset composition to mitigate the risk of collateral asset price Fluctuation.

How does the Delta neutral strategy work?

First of all, anyone can mint deUSD by collateralizing stETH, and each collateralized stETH will be used to short an equal amount of ETH in the market. The short position can also capture the market positive interest rate, bringing additional income to deUSD.

When the funding rate is negative, deUSD will dynamically adjust its asset composition ratio based on the balance of OCF (open collateral fund used to support the value of deUSD) to maintain price stability.

As follows:

In the environment of negative interest rates, market borrowing behavior increases, and OCF balance gradually decreases.

As OCF gradually declines, the asset composition of deUSD will also be gradually adjusted, reducing the proportion of long-term base income and increasing the proportion of sDAI / other stable income assets.

For example, when the OCF reaches the 100% high water mark, the asset composition ratio of deUSD is '80% long-term strategy portfolio + 20% sDAI/other income stable assets'.

When the OCF reaches the 75% high watermark, the asset composition of deUSD dynamically adjusts to "70% long-term strategy portfolio + 30% sDAI / other income-stable assets".

Visible, unlike the widely known 'stablecoin', deUSD was born with a unique stable mechanism, aiming to provide a better ecosystem experience for users and partners. Users have a sense of security when adding Liquidity, and the protocol in cooperation with Elixir enjoys less worry when enjoying Liquidity, no matter how the market price fluctuates, the stable Liquidity is always stable and running smoothly.

Elixir protocol加持，deUSD 真的Decentralization

The powerful validators network is the core of the Elixir protocol. The Elixir validators network consists of over 13000 independent nodes distributed globally, with each node participating in transaction validation and Consensus Mechanism. The decentralized validators network has no single point of control, ensuring that the protocol is free from any form of centralized intervention, guaranteeing the transparency and security of the protocol.

With the support of the Elixir validators network, users can complete the minting/redeeming operations of deUSD by interacting with the Smart Contract, without any centralized approval process. The user's right to mint is completely in their own hands, ensuring full Decentralization throughout the entire process.

As the core product of the future Elixir protocol, deUSD has strong support from the Elixir validators network behind every transaction, making it a truly decentralized and stable digital asset.

Figure: Current number of Elixir global validation Nodes

In addition to the powerful validators network, the Elixir protocol also leaves plenty of room for imagination for its core asset deUSD. The highly interoperable protocol allows deUSD to freely circulate among protocol applications on different chains, bringing broad application scope and excellent value capture ability to deUSD. The high scalability of the protocol also enables deUSD to iterate with the continuous upgrading of user and market demand, ensuring the long-term and stable operation of deUSD.

Positive flywheel, with DEUS Elixir, it just can't 'stop'

Provide users with easy and diverse income options

Combining the powerful resource integration of Elixir, deUSD abstracts products and exchanges from different public chains into a single income asset, reducing the complexity of operations between different blockchains and exchanges for deUSD holders, making it easier for them to manage assets and converting more institutions and individuals into potential liquidity providers. deUSD is like a pass in the Elixir cooperative ecosystem, allowing participation in stake interactions on multiple platforms and even multiple chains simply by using deUSD, thus fulfilling the multi-chain requirements through Elixir.

protocol is more willing to accept Collateral with stable prices

Compared to volatile assets like ETH, deUSD with a price stabilization mechanism may be more welcomed by Decentralization exchanges, as this 'stability' is not only a reflection of the platform itself, but also a responsibility to its users. Several partners have already accepted deUSD as collateral, and in the future, deUSD will also become the main asset for order book liquidity on the Decentralization exchange ecosystem.

In addition, the long-term plan of the Elixir protocol is to extend this stake mechanism to Centralized Exchanges that accept deUSD as Collateral, allowing users to not only utilize deUSD in Decentralization exchanges, but also trade and borrow deUSD in certain Centralized Exchanges to gain more profits and opportunities.

deUSD brings new use cases to Elixir, providing users with stable and diverse income channels, greatly enhancing the overall liquidity and market competitiveness of the Elixir protocol and its partners.

The Elixir ecosystem has a promising future, how can we participate now?

Perfectly aggregating a large amount of Liquidity, and planning synthetic US dollar assets, it seems that Elixir has fully prepared for the new future of Decentralized Finance. So as an on-chain user, how can you participate in the future of Elixir?

Apothecary

In March this year, Elixir launched the Apothecary event, motivating users to contribute to the Elixir Liquidity network by distributing points rewards (Elixir of Immortality). It's not too late to participate in stake now, with the Mainnet launch imminent.

Users can participate in Apothecary by completing personal information, providing Liquidity, etc. Please refer to the Apothecary introduction page for details.

Complete personal information:

• Go to the Apothecary participation page
• Connect Wallet
• Connect social media account and get welcome points as a reward after completion

Provide Liquidity:

• Go to the Liquidity page of Elixir https://agg.elixir.xyz
• Connect Wallet
• Click on the currency pair and provide Liquidity

deUSD stake rewards (coming soon)

When the Mainnet is officially launched, users can freely choose to withdraw the staked ETH in the protocol or directly mint the staked ETH into deUSD. Any unwithdrawn ETH in the contract will be automatically minted into an equivalent amount of deUSD.

Elixir also allocates generous stake rewards for deUSD, increasing Apothecary's point rewards from 20 million to 50 million. Among them, deUSD stakers will receive triple point rewards, and users who provide Liquidity for deUSD/USDC on Curve will receive five times the point rewards.

When deUSD is officially launched, the 8-week deUSD Farming will also be launched, achieving lucrative stake rewards for deUSD stakers in a short period of time.

New partner?

Back in a tweet back in April, Elixir posted a playful teaser image with Pendle's logo looming in the image. It is significant that before this official Elixir had already repeatedly "clearly hinted" at the upcoming partners through the same form.

It seems that the integration of Elixir and PENDLE is already a done deal. Combined with the upcoming deUSD, it is reasonable to speculate that PENDLE will accept deUSD as collateral, and the TVL of deUSD is worth looking forward to.

Similarly, Elixir has recently released a mosaic version of the dYdX logo in its latest tweet. Combined with the upcoming Elixir Mainnet, it seems that Elixir is also about to integrate with dYdX. With the addition of dYdX, it is foreseeable that Elixir's partnership network will continue to expand, connecting more high-quality projects to expand the future of Decentralized Finance.

Conclusion

In this atypical Bull Market, due to limited Liquidity and scattered attention in the market, there seems to be no decent 'zone rotation' trend. The various tokens that were once so diverse and creative continue to remain silent with their respective visions.

Despite the lack of significant zone effects to pump up the coin price, on-chain finance has never stopped after the Decentralized Finance Summer. It's just that Decentralized Finance no longer maintains the central position it had in the last bull market. After being tested by time and the market, Decentralized Finance has gradually evolved from a gold rush experience for everyone to a source of income that many on-chain players and even whales are reluctant to give up.

As an important component of Decentralized Finance, Elixir has witnessed the glory and plight of Decentralized Finance, and has the potential to rejuvenate Decentralized Finance in the visible future, constantly refreshing the market's expectations for Decentralized Finance.

The introduction of deUSD will also bring more Liquidity, users, and open interest to the exchanges and Decentralized Finance protocols cooperating with Elixir, ultimately making Decentralized Finance "Great again".

In the face of a world of encryption where danger and opportunity coexist, any innovation and improvement are never afraid of being late.

Learn more:

Elixir official website: https://www.elixir.xyz/

Elixir official Twitter: https://x.com/elixir

Elixir Telegram official community:

https://t.me/elixir_network

Elixir official documentation: https://docs.elixir.xyz/

Apothecary Event:

https://www.elixir.xyz/apothecary

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Preface

This report delves into the evolution of the Cryptocurrency market, focusing on the diversified development of Token issuance methods and types, and analyzing the current situation and future development trends of the crypto market Depth. By reviewing historical issuance methods and analyzing different Token issuance models, combined with the current market situation, it presents a complete picture of the crypto market for readers.

1. Evolution of issuance methods

In the field of Cryptocurrency, technological innovation is gradually lowering the threshold for asset issuance. Initially, Cryptocurrency issuance relied mainly on intensive computing resources for mining. With the emergence of ICO (Initial Token Issuance) and IEO (Initial Exchange Offerings), project parties need to have certain capital and industry background. The popularity of Liquidity Mining enables the cold start of long-tail assets, and decentralized projects are gradually emerging. Nowadays, the rise of one-click launch coin platforms has greatly simplified the process of token issuance, allowing individuals and small teams to easily engage in asset issuance.

1.1 Diversification of Token Issuance Methods

With the advancement of blockchain technology, the methods of token issuance are becoming increasingly diverse, and the technical barriers have significantly dropped, allowing users without a technical background to easily participate in token issuance. These methods adapt to the needs of different projects and market environments. Here are several common methods of token issuance:

1. Mining (Fari Mining) This is the most common way of token issuance in the early days, where users are rewarded with tokens by providing computing power to the network and mining new blocks. BTC (Bitcoin) is the most representative project.

2. Crowdfundingissuance Including initial Token issuance (ICO), Initial Exchange Offerings (IEO), and initial Decentralization issuance (IDO). The project party presells Tokens to raise development funds.

ICO is the earliest form of Crowdfundingissuance, reaching its peak between 2014 and 2018, with a total fundraising of over 56 billion US dollars, but gradually waning due to regulatory issues.

In 2019, IEO emerged as a new financing model, endorsed by a well-known Centralized Exchange, enhancing the project's credibility.

With the rise of Decentralized Finance, the IDO launched by Decentralizationexchange has quickly become popular due to its community-driven and Decentralization features, and has become one of the mainstream ways to launch coins in 2021, with a funding amount exceeding $130 billion.

3. Liquidity Mining（Liquidity Mining） Users provide Liquidity to the Decentralization trading platform and receive Token rewards. The DeFi Summer 2020 craze has made Liquidity Mining one of the popular Token issuance methods, which not only improves Token Liquidity, but also creates new revenue streams for users. Compound pioneered Liquidity Mining, leading to a significant rise in its user base and TVL.

4. Airdrop (Airdrop) The project party distributes Tokens to early supporters or specific user groups for marketing or reward strategies. Airdrops not only help projects increase their visibility but also incentivize user participation in the community and project governance. In 2020, the well-known project Uniswap distributed Tokens to early users through an Airdrop, becoming a successful case. Blur pioneered the use of a points system, and Pendle's interest separation-based Decentralized Finance gameplay facilitated the birth of the PointFi zone.

5. One-click launch coin (OCTD) In recent years, the rise of methods such as inscription, minting, and Pump.Fun launch coin, through simple tools or smart contracts, enables users to quickly create customized tokens and conduct transactions without complex operations. This approach greatly reduces the threshold for issuing tokens and promotes the rise of MEME culture.

Figure 1: Historical Issuance and Market Cap of different types of Crypto Assets

With the rise of the Decentralized Finance ecosystem, one-click launch coin platforms like Pump.Fun have simplified the coin issuance process with low cost and automated processes, significantly reducing the threshold for Token issuance. These developments reflect the market's demand for efficient, flexible, and Decentralization issuance methods, providing project parties and investors with more financing and participation opportunities.

Figure 2: Number and fundraising amount (in USD) of different Token issuance methods

1.2 In recent years, the number of Tokenissuance has surged

With the drop of the asset issuance threshold, the number of newly added Tokens in Crypto Assets experienced an explosive rise from 25 in 2013 to 13,453 in 2024. Especially since 2020, the average annual growth rate has exceeded 150%.

This rise is mainly attributed to the popularity of the ERC-20 token standard, the rise of decentralized finance, the popularity of non-fungible tokens, the emergence of new blockchain platforms, and the rapid expansion of the encryption ecosystem. At the same time, the standardization of technology, the widespread application of smart contracts, and the emergence of one-click launch coin platforms (such as Pump.Fun) have further lowered the launch coin threshold, prompting more projects and communities to enhance their visibility and attractiveness through token issuance.

Figure 3: The number of new Tokens listed by CoinGecko each year

Although platforms like CoinGecko provide data for new Tokens, the actual number of issued Tokens far exceeds these statistics. In 2024, the number of new Tokens surpassed 2.52 million, showing an explosive rise since 2020. This not only demonstrates the vitality of the crypto market but also highlights the increasing importance of Tokens in project development.

Figure 4: The annual issuance of new Tokens (including the Solana ecosystem and Pump.Fun)

2. In-depth analysis of different Token issuance methods

The evolution of Cryptocurrency issuance models reflects a focus on community participation and fairness. From the initial Mining issuance to community-driven models and now mechanisms such as IDO and Token Airdrop, the role of the community in the Cryptocurrency ecosystem has become increasingly prominent. For example, DOGE has promoted its rise in value by strengthening its community culture and values, demonstrating not only the critical role of the community in driving project success, but also the importance of community-driven models in the development of Cryptocurrency.

IDO and Airdrop and other new issuance mechanisms further promote the Decentralization of Token distribution, enabling a wider range of users to participate in the early development of the project. This not only enhances the fairness and transparency of the project, but also reflects the Cryptocurrency industry's pursuit of democratic and inclusive values, demonstrating innovation and adaptability in the Cryptocurrency sector.

2.1 Miningissuance: The main issuance method in the early era of clone coins

In the early development of the Blockchain, most of the alts were Cryptocurrency projects based on the BTC code and modified, such as Litecoin, Feathercoin, Namecoin, Dogecoin, and Primecoin. The fair Miningissuance model of the altcoin era originates from BTC, relying on Computing Power to compete for the distribution of Tokens, which was the main issuance method in the early stages of the encryption market. Through DecentralizationMining, Token distribution is realized, with participants competing for new minted Token rewards using computational resources, providing security for the Blockchain network and creating a relatively fair Token distribution mechanism. Today, a few alts (such as Litecoin and Dogecoin) still occupy important positions in the Cryptocurrency market, becoming representative projects in the early AltCoin scene.

Figure 5: Market Cap (USD) of early clone coin issuance

2.2 ICO Craze: EOS and other star projects rise

ICO (Initial Coin Offering) is an innovative financing method for blockchain projects, similar to IPO in the stock market. The blockchain project team raises funds from the public by issuing tokens through the Internet with the help of a White Paper. Since the first ICO of Mastercoin (Omni) in 2013, this model has developed rapidly. In 2014, Ethereum raised approximately 18 million USD through ICO; in 2015, The DAO project raised a fundraising scale of 150 million USD. In 2017, ICO experienced explosive growth, and the EOS project raised nearly 4.2 billion USD within a year, becoming a pinnacle of ICO. However, with the hacker attack on The DAO in 2016 and the ban on ICO in China in 2017, the security and compliance issues of this model gradually emerged, and the ICO frenzy cooled down.

Figure 6: The amount of funds raised during the main ICO token issuance (in USD)

2.3 IDO Era: Enhancing the Degree of Token Issuance Decentralization

In June 2019, Binance DEX launched the first IDO project, marking the innovation of the Cryptocurrency fundraising model. Before the emergence of IDO, IEO (Initial Exchange Offering) was popular as a semi-centralized financing method. Under the IEO model, the Cryptocurrency exchange is responsible for project review and screening, and conducts Token sales and trading on its platform, enhancing the credibility of the project and expediting the listing process. In 2019, IEO became a popular fundraising method after ICO. However, due to the requirement for investors to complete KYC on the centralized exchange and rely on the centralized platform for Token subscription, the centralized nature also caused some users' dissatisfaction.

In response, the Initial DEX Offering (IDO) emerged. This emerging Token issuance method, through Decentralized Exchange (DEX) such as Uniswap, re-enables permissionless financing by conducting Token issuance and trading. In IDO, the project party or community can independently deploy Liquidity on DEX, bypassing the review of centralized exchanges. This enables investors to directly purchase Tokens in the early stages of the project, not only enhancing the flexibility and transparency of participation but also reducing the risks of centralization. IDO provides a broader financing platform for small-scale investors and innovative projects, promoting further Decentralization of the Cryptocurrency ecosystem.

Figure 7: Fundraising Amount during the main IDO Tokenissuance (in USD)

2.4 Liquidity Mining: Accelerating the Development of the Decentralized Finance Ecosystem

In 2020, the 'Decentralized Finance Summer' craze has propelled Liquidity Mining to the forefront of fundraising for launching coins. Liquidity Mining (also known as Yield Farming) is an innovative financing model in the Decentralized Finance field, allowing users to invest in Liquidity pools supported by Smart Contracts to obtain returns. This model originated from the attempt by IDEX in 2017, deepened by Synthetix in 2019, and ultimately achieved great success in June 2020 when the Compound protocol distributed the governance token COMP, leading to nearly a 10-fold increase in Total Value Locked (TVL) in the following five months, becoming a key catalyst for the rise of Decentralized Finance. Other Decentralized Finance projects (such as Uniswap) have also rapidly emulated this successful example, driving the vigorous development of the entire Decentralized Finance ecosystem.

Figure 8: Compound TVL rise trend

Figure 9: Uniswap TVL rise trend

2.5 Airdrop Incentive Token: Airdrop draw attention effect is popular

Since 2020, many blockchain projects have adopted the Airdrop strategy to incentivize users and expand the project's influence. The earliest Cryptocurrency Airdrop can be traced back to 2014 when programmer Baldur Friggjar Odinsson Airdropped AuroraCoin to Icelandic citizens. However, the turning point for Airdrop becoming the mainstream token distribution method occurred in 2020 when Uniswap conducted a large-scale Airdrop in response to the competition from Sushiswap, with eligible users receiving at least $1,000 worth of UNI Tokens. This strategy not only attracted a large number of users but also fueled the rise of 'Decentralized Finance Summer.' Subsequently, projects such as DYDX and ICP also incorporated Airdrop strategy into their token economic models. As a result, Airdrop has become a powerful tool for Web3 projects to attract users, enhance visibility, and achieve decentralized token distribution, laying the foundation for future applications such as GameFi and SocialFi.

Figure 10: Launch Market Cap of Popular Airdrop Projects

2.6 Community-driven Issuance: Community Culture Drives Token Value

In December 2013, DOGE (Dogecoin) was born, and community culture became the core driving force of its value. This project, which initially satirized cryptocurrency speculation, not only became popular due to its humorous brand image, but also stood out with its strong community cohesion. The DOGE community won widespread followings by sponsoring charitable activities such as the Jamaican bobsled team and the Kenyan clean water project. These initiatives not only enhanced the visibility of the project, but also demonstrated the key role of community culture in cryptocurrency value. DOGE's innovative model ingeniously combines entertainment with investment, providing inspiration for subsequent meme coins such as Shib, Pepe, and Bonk, and has had a profound impact on the development of meme community culture and community-driven tokens.

Figure 11: Total market capitalization of MEME zone

2.7 One-click launch coin platform: launch coin operation is flexible and convenient

In mid-March 2024, the Solana ecosystem Meme Token represented by BOME triggered a craze, driving the rise of one-click launch coin platforms such as Pump.Fun. Pump.Fun is a rapidly growing Memecoin issuance and trading platform in the Solana ecosystem, attracting a large number of users to participate in one-click launch coin due to the wealth effect of Memecoin. By collecting launch coin fees, the platform's income rose rapidly, with over 10 million USD in revenue in just 3 months. As of August 16th, the platform's total revenue exceeded 96 million USD, with a daily peak of 2.31 million USD, surpassing many mainstream blockchain networks (Base, Arbitrum, BNB, Blast's average daily income is less than 1 million USD).

Figure 12: Pump.Fun cumulative revenue

Figure 13: Daily Earnings of Major Blockchains

3. Variety of Token: From "Digital Gold" to MEME Craze

With the continuous innovation of blockchain technology and application scenarios, the uses and types of tokens continue to expand. As the earliest cryptocurrency, BTC is mainly used for value storage and transactions, while ETH has expanded the application scope of tokens through smart contracts. In recent years, with the rise of Decentralized Finance (DeFi), token functions have become increasingly diversified, giving rise to stablecoins, governance tokens, non-fungible tokens (NFTs) for digital art, GameFi tokens that combine gaming and finance, SocialFi tokens that combine social elements, and Meme coins used for community entertainment. This not only provides investors with more choices, but also promotes the prosperity of the crypto market.

3.1 Historical Trends: Popular concepts are constantly changing with the historical cycle

In 2009, the Genesis Block of BTC was born, ushering in a new era of the encryption industry. Subsequently, the Block chain ecosystem has witnessed numerous innovative concepts, each of which has brought unique value and vitality to it.

In 2013, for the first time, Bitcoin Halving, many developers drew on BTC's code for innovation and optimization, ushering in the "clone coin era". According to the research of Gate Institute, the total market value of early clone coins was about 918 billion US dollars.

With the rise of Ethereum (ETH) and other L1 blockchains and the ICO frenzy in 2015, the market share of Bitcoin has significantly declined.

Since 2017, stablecoins and CEX coins have gradually gained market follow, and the 2020 Decentralized Finance Summer has further promoted emerging cryptocurrency types such as Decentralized Finance, GameFi, and MEME, showing a trend of currency diversification.

Despite experiencing multiple market cycles, BTC still dominates, with the Market Cap share stabilizing from a peak of over 80% in the early days to the current level of 50%. The current Market Cap has exceeded $1.2 trillion, earning it the title of "digital gold".

Figure 14: Proportion of Market Cap of Different Concept Zones over the Past 10 Years

In December 2013, the Ethereum White Paper was officially released, marking the arrival of the Programmability Block Chain era. Ethereum's Smart Contract technology greatly expanded the application scenarios of the Block Chain, making its Market Cap break through $340 billion in 2021, becoming the second largest Cryptocurrency after BTC.

In 2017, stablecoins and coins of centralized exchanges (CEX) platforms developed rapidly with the ICO craze. As of now, Stable Coin Market Cap has exceeded $160 billion, and CEX platform coin Market Cap has also exceeded $90 billion. The influence and recognition of the cryptocurrency market continues to expand globally.

Figure 15: Historical popular concept zone and its current Market Cap

During 2014 to 2017, the demand for anonymous transactions once drove the rapid development of Privacy Coins such as Monero and Zcash. However, with the increased regulatory efforts by governments, the market share of Privacy Coins has significantly declined since 2018, and early Fork coins and clone coins have gradually faded away as innovative projects emerge.

Due to the rapid development of Decentralized Finance, the activity on the Ethereum mainchain has increased significantly. However, due to the slow processing speed and high gas fees, Layer 2 solutions have emerged to improve the scalability of Ethereum. Currently, the market capitalization of Layer 2 zone has exceeded 174 billion US dollars.

Decentralized Finance and GameFi zones have rapidly risen since 2020, with Dapps such as Uniswap and AAVE providing new solutions for traditional Financial Services. The Market Cap of Decentralized Finance zones has reached 732 billion USD. Projects like Axie Infinity and STEPN have attracted a large number of users and funds through the 'Play to Earn' model, demonstrating the potential of blockchain in digital ownership and virtual worlds, with the current Market Cap at 43.8 billion USD.

In 2023, SocialFi and BRC-20 became the market focus, combining blockchain with social media and BTC ecosystem expansion, with a market capitalization exceeding 3.3 billion US dollars.

Figure 16: Proportion Trend of Market Cap for Different Currencies

Since 2020, the crypto market has gradually shown a trend of segmentation and specialization, with emerging zone Tokens emerging like mushrooms after rain.

The issuance quantity and variety of new Tokens are showing explosive breakthroughs, making Meme, GameFi, Decentralized Finance, and Non-fungible Token the market focus, even maintaining a high proportion in the Bear Market cycle from 2022 to 2023.

MEME Tokenzone has shown the most eye-catching performance, rising far above other zones, with a Market Cap exceeding 400 billion US dollars, reflecting investors' sustained enthusiasm for this sector. GameFi, Decentralized Finance, and Non-fungible Token zone have slightly retreated after their peak in 2021.

With the approval of the BTCSpot ETF in 2024, OTC funds are pouring into the cryptocurrency market, driving the total market capitalization of the encryption market to new highs.

Figure 17: Issuance volume of different currencies rise

3.2 Return to the present: Solana occupies the major market share of new coin issuance

In 2024, the Meme Token craze swept across multiple public chains, with Solana being particularly prominent. In March, tokens such as Bome and Slerf in the Solana ecosystem became market focus due to their high return rates. The emergence of one-click launch coin platforms like Pump.Fun further lowered the launch coin barrier and simplified the process, leading to a daily average new coin issuance volume of over 10,000 in the Solana ecosystem. According to data from Gate Research Institute, Solana accounts for over 60% of the new coin issuance market, far ahead of other public chains.

Figure 18: Daily new token additions for major Blocks on-chain in 2024

In addition to Solana, the Base chain has also performed well this year. Thanks to the support of Coinbase, the dropMoney Laundering of EIP-4844, the Meme craze, and other Favourable Information such as the rise of the Farcaster community, the number of users and the activity of the Base ecosystem have rapidly increased. Since March, the wealth effect of the 'Degen' Token big pump has further boosted the heat of the Base ecosystem, with Token issuance soaring, making it the second largest public chain in market share this year, accounting for over 20%.

Figure 19: Daily percentage of newly added tokens on-chain for major blocks in 2024

Summary

The Token issuance method in the cryptocurrency market has evolved from Mining, ICO, IEO, IDO, Liquidity Mining to today's one-click launch coin platform, reflecting the pursuit of community participation and fair issuance. Each issuance method responds to specific market demands and technological developments in different periods. The current diversified issuance model provides blockchain projects with wider financing channels, lowers the threshold, improves efficiency, and promotes the vitality of the community ecosystem.

The continuous advancement of blockchain technology has brought about the prosperity of the Token economy. From the 'digital gold' role of Bitcoin (BTC), to the Smart Contract revolution of Ethereum (ETH), and the emergence of diverse functions such as stablecoins, governance tokens, and utility tokens, the application scope of Tokens continues to expand. With the emergence of innovative concepts such as Decentralized Finance, Non-fungible Tokens, GameFi, and SocialFi, the application of blockchain in finance, art, gaming, and social fields continues to deepen. With the promotion of high-performance public chain Solana and the one-click launch coin platform, Meme Tokens have become the new favorite in the market due to their enormous growth potential, occupying a leading position in new coin issuance. The diversification of Tokens provides investors with a wider range of choices, while accelerating the overall rise of the cryptocurrency market.

The market has been in a cycle of "AI not being popular, AI being popular again" for a long time.

Especially with the information of top VC investments, AI projects can quickly go from being unnoticed to being widely discussed.

In addition to discussing Vitalik's live performance at Token 2049 yesterday, the most talked-about project in the CT community is undoubtedly Vana: after the project's official announcement, it immediately received a total of $25 million in financing from the encryption VC giants Coinbase Ventures, Paradigm, and Polychain. Various likes, congratulations, and analysis posts emerged immediately.

You may not love VC coins, but any significant financing in a market lacking hot spots is still worth paying attention to.

Vana's Twitter bio reads, "Empowering users with their own data to empower their own AI".

It seems to be another narrative against the monopoly of big companies on AI, playing with data again, and familiar VCs gathering together... What's the differentiation of Vana this time?

Data DAO high-end, unity VC

As soon as Vana's financing information was released, all parties were optimistic.

For example, a fellow pusher analyzed that Vana is the first AI project invested by Paradigm, and Vana has received investments from different top VC in different financing rounds:

• Strategic Round: Coinbase Ventures invests $5 million
• Series A: Paradigm leads a $18 million investment
• Seed round: Polychain invests 2 million US dollars

If the VC giants all love a project, it's probably because the project's narrative and the problem it aims to solve are significant enough.

As mentioned at the beginning, Vana's main problem area is the 'dragon-slaying' narrative of data control in the AGI era - individuals contribute data but cannot get rewards, and data privacy is not guaranteed; a few dominant companies train monopolistic AI models... Therefore, we need to break this situation.

But following the AI trend of the past two years, calling for the coexistence of multiple AI models and opposing monopoly has become the narrative correctness in the crypto circle.

(Related reading: Delphi Labs: AI will face competition from multiple models, which encryption applications do we favor?)(https://www.techflowpost.com/article/detail_20427.html)

This is not a new story, but most encryption AI projects currently telling this story are mostly focused on the DEP field, which encourages the contribution of different resources using different hardware in different fields.

Vana's approach to problem solving appears to be more innovative --- using DAOs with different purposes to allow everyone to contribute different types of data, thereby training AI models for different purposes.

Vana wrote in her technical blog article:

"The data DAO is a Decentralization entity that allows users to aggregate and manage their data... It's a bit like a data union. The DAO has complete control over the data set and can choose to rent or sell anonymous copies. For example, Reddit's data can even be used on new platforms owned by new users, including fren, past posts, and other data, which can be used on the new platform at any time".

Currently, Vana's official website lists 16 different data DAOs, allowing users to contribute various types of data such as Reddit, Twitter, dating apps, etc., and take control of their ownership of these data through Vana's blockchain network.

At the same time, data can also be contributed to AI models that require specific vertical domain data for training, and users can also benefit from it.

If all kinds of data from various industries can be contributed in this DAO manner, it is indeed a relatively ideal model, but the problem lies in how to achieve it.

At least two specific issues are involved here:

1. How do you ensure that I have actually contributed the data?
2. How do you ensure the security and ownership of contribution data?

And this also involves the implementation and principle of the Vana network.

The core of the Vana network lies in its unique multi-layer architecture design, aiming to create a Decentralization data ecosystem to address the key issues of data ownership, privacy protection, and value creation mentioned above.

According to the latest architecture diagram, the Vana network is mainly composed of three key components: the Data Portability Layer, the Data Liquidity Layer, and the Universal Connectome.

1. Data Portability Layer - This layer is the top layer of the Vana network, responsible for handling the applications and AI models of on-chain data. There are two main types of participants in this layer:

• Developers: They create applications and AI models that use on-chain data.
• Users: They use these applications and models, and are also the ultimate beneficiaries of the data.

The main function of this layer is to ensure the portability and interoperability of data, allowing users to easily transfer and use their data between different applications and models.

1. Data Liquidity Layer --- This layer is responsible for bringing user-owned data onto the chain and is the foundation of the entire system. It includes two important types of participants:

• Contributors: They contribute their own data to the system.
• Validators: They are responsible for verifying the authenticity and value of the contributed data.

This layer solves the problem of securely and reliably converting offline data into on-chain assets, providing liquidity for the entire ecosystem.

1. Universal Connectome - This is a unique component that serves as a real-time data flow chart for the entire ecosystem. It is composed of the following roles:

• Propagators: They are responsible for propagating and updating the flow of data in the ecosystem.

The role of the Universal Connection Group is to provide a real-time map of data flow throughout the entire ecosystem, enabling all participants to understand the flow and use of data.

These three components work closely together to form a complete data ecosystem:

• The data liquidity layer brings the data owned by users securely into the chain, providing raw data for the entire system.
• The data portability layer utilizes this on-chain data to support the development and use of various applications and AI models.
• The Universal Connection Group real-time monitors and displays the data flow in the entire ecosystem, ensuring transparency and traceability.

If you don't delve into the technical details of implementation, such as smart contracts, ZK, and code level things, you can think of Vana as a blockchain network that provides a comprehensive solution for data contribution, validation, usage, and monitoring.

The combination of mega infrastructure, monopolistic AI model slaying, and the old and new integration of DAO... When these elements are combined, it also seems relatively reasonable to unite several top VC players.

(Shenchao Note: Readers interested in technology can directly visit the projectdoc Learn more)

点击挖矿grounded 气,团结組众

According to the previous tone and routine of encryption AI, such projects focus on high-end and technological sense. Ordinary players usually stay in the stage of feeling mysterious and difficult to participate in actual use.

But this time, Vana has become more down-to-earth in its actual gameplay --- in addition to the high-profile narrative for VC, there is also a "click-to-mine" mode that is more accessible to retail investors and features a lower threshold, which is well-received.

Narrative is important, tone is important... But popularity is more important.

When it comes to Paradigm's investment projects, the gameplay inherited from Blur and Friend.Tech, which involves points, attracting popularity, and intensive operation, is also reflected on Vana. The specific gameplay is as follows:

1. Open Telegram and enter the Vana Data Hero mini-program (interested players can try it out by clicking here)
2. The main gameplay is currently very simple, which is to simply click the mouse and tap the ball on the screen containing various Web2 application icons. The more clicks, the faster the points are added in unit time. (It may symbolize contributing data from various Web2 applications to mine)

1. In addition to simply clicking on the screen, there are other activities such as following social media, inviting fren, adding the testnet, etc., which can be completed, and different scores will be rewarded afterwards.

The project party is obviously knowledgeable in marketing and creating hot topics. For example, in one of the tasks, you can earn 500 VANA points by replying to Musk's previous posts on AI, data, and privacy topics; this is a bit of rallying the masses to promote Vana in its own way.

However, we do not currently fully understand the exchange token ratio and distribution rules of this VANA score. Interested players can further follow Vana's social media for more information.

However, with the support of VC giants and the successful precedents of projects on Telegram, there will definitely be money raining down and the expected listing. It's just that the points-based gameplay of PUA makes people tired and fearful of missing out. As for how to participate, it's a matter of personal preference.

Adult, the times have changed

Interestingly, even the AI project with thick eyebrows and big eyes is using Telegram mini-programs to attract popularity and build momentum.

The previous AI project gave people a lofty feeling, but after the industry sparked a discussion about VC coins and TON ecosystem mini-programs representing Mass Adoption, it is evident that the project parties have also clearly responded to the industry's changes.

We must unite with VC and also strive to win over the masses.

If you check the earlier information about Vana, you will find that after 21 years of establishment, the project was positioned as an AI identity generation application.

Obviously, building infrastructure is better than developing applications, and it is better to cater to both VC and the masses rather than just telling a story to VC.

After the transformation, you can clearly see the strategic changes of the project in Vana's Go To Market. There are only so many grand narratives, and new technologies cannot emerge immediately. Instead of relying on changes in the overall environment, it is better to adjust oneself to the maximum extent and keep up with the rhythm of the current market.

The author expects that there will be more and more new projects, or old projects with new gameplay variations.

Time, fate.

Statement:

1. This article is reproduced from TechFlow of Shenzhen, with the original title "Can AI Survive in the world of encryption: encryption experiments of 18 large models", the copyright belongs to the original author [TechFlow of Shenzhen]. If you have any objections to the reprint, please contact the [Gate Learn team](https://www.gate.io/questionnaire/3967, the team will handle it as soon as possible according to the relevant procedures.

2. Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.

3. The articles in other languages are translated by the Gate Learn team. Without mentioning Gate.io(http://Gate.io), it is not allowed to copy, disseminate or plagiarize the translated articles.

Today, we are proud to announce,Fuse completed a $12 million financing round. Fuse is a core contributor to Project Zero, which is a DePIN for renewable energy aimed at addressing major energy coordination issues.

Fuse is a full-stack renewable energy company founded by Alan Chang and Charles Orr, both of whom were Revolut early employees. Alan and Charles played a crucial role in the early growth of Revolut and began focusing on addressing the energy crisis in 2022. Over the past few years, FUSE has built a modern, technology-driven energy company: establishing robust data and engineering systems aimed at serving customers at a cost and efficiency superior to traditional three-letter public utility giants.

Currently, FUSE operates large-scale solar and wind power plants, conducts Distributed Energy Resources (DER) installation business, and serves tens of thousands of households in the UK as a regulated electricity supplier.

But that's not enough. To meet the growing energy demand around the world, we need to add 4000 terawatt hours of generating capacity each year over the next decade (https://www.we-online.com/en/news-center/blog?d=poweringthefuture), roughly equivalent to building the entire U.S. power grid from scratch each year. By 2030, an additional $4 trillion investment per year is required for modernizing the grid, energy storage, and transmission infrastructure, an amount that exceeds the annual GDP of Germany or Japan (https://about.bnef.com/blog/global-net-zero-will-require-21-trillion-investment-in-power-grids/).

When you add geopolitical complexity, the problem becomes even more serious: thousands of jurisdictions, cumbersome bureaucratic procedures and regulatory agencies, and market participants with different incentives and constraints. We are facing a huge energy problem for the next decade. A completely new approach is needed, and this is exactly the mission of Project Zero.

Project Zero is a renewable energy DePIN designed to accelerate the expansion and utilization of distributed energy resources (DER) by incentivizing network participants to shift demand to renewable energy periods, support electric travel, and generate new capacity through solar panels or batteries.

Energy generation and coordination is one of the biggest opportunities in our lifetime, and it will not be solved through traditional tracks or structures alone. In operating FUSE, Alan and Charles realized that encryption-driven capital formation mechanism is crucial for the way forward. Project Zero is such a mechanism: it serves as an incentive layer, acting as the foundation for the most decentralized part of the energy value chain coordination.

Decentralized Energy Stack

The main trend in the energy sector is horizontal integration within specific segments, such as generation, transmission, or retail, rather than vertical integration across the value chain.

Like [Trinity]Dynegy Such installers focus on the deployment of distributed energy resources (DER), but do not engage in direct energy retail business. Instead, retailers such as NRG Energy typically do not provide DER installation services unless these services are bundled with traditional power generation. Vistra Corp, a major U.S. power generation company with assets covering natural gas, coal, nuclear, and solar, operates multiple retail brands such as TXU Energy, Ambit Energy, and (https://www.dynegy.com/), but there is an issue with inefficient coordination of its generation portfolio supply and demand. These entities mostly operate independently, limiting their ability to achieve maximum operational returns.

These inefficiencies are particularly severe. Inconsistent data formats and incomplete consumption telemetry hinder real-time monitoring and demand forecasting for grid operators. The fragmented licensing framework between jurisdictions hinders economies of scale for renewable resource installers and service operators. Information silos hinder reasonable pricing and Risk Management for retailers.

Fuse starts from first principles, focusing on the retail energy Supply Chain, and intentionally operates at every level of the stack to minimize efficiency losses at every step of the generation to distribution lifecycle. Their mission is to provide cheap, clean energy at scale and work backward from there.

In the near future, this means we need to address the following two specific issues:

• Consumer behavior change - How to encourage global users to change consumption patterns, more effectively balance grid load, participate in demand response programs, and further adopt residential renewable energy products and distributed energy resources (such as electric vehicle chargers, batteries, solar inverters, heat pumps, smart thermostats)?
• Retail energy distribution standard issues - How to bridge the disconnect processes between retail energy suppliers, grid operators, virtual power plants, and DER installation service providers that historically made achieving economies of scale difficult through geographical expansion?

Project Zero complements Fuse's vertical integration strategy by providing consumers with incentives to flexibly adjust energy consumption and build new renewable energy capabilities.

Large-scale aggregation of energy assets

Fuse aims to transform households into conscious and actively engaged participants in energy choices.

The earth needs proactive resource consumers, not consumers who consider energy use as a line item in their monthly bills. FUSE provides a delightful consumer energy experience, accelerating this transition while mediating the incentive allocation of Project Zero to influence consumption patterns and encourage the installation of new capacity.

As an energy retailer that directly engages with customers, Fuse has a structural advantage in capturing and distributing the value created by solving energy coordination challenges: promoting Demand Response Programs (DRP), operating Virtual Power Plants (VPP), building low latency metering systems, and advancing new interoperable data standards.

Demand Response Plan

Fuse dynamically adjusts the edge energy consumption based on grid conditions, enabling it to capture DRP The untapped potential. Although DRP can reduce peak electricity demand by 20%, the majority of eligible households worldwide do not participate in these programs. This represents millions of kilowatt-hours of electricity that can be shifted or reduced during peak periods, significantly reducing operating costs.

When there is high demand for electricity or a shortage of supply, Project Zero can distribute tokens to owners of energy resources within the network (smart appliances, water heaters, thermostats, cogeneration systems, solar panels, batteries) as incentives - not just discounts - to reduce or adjust their consumption. This balancing ability enables FUSE to stabilize the power grid and keep supply and demand consistent at critical moments.

Source: NYC DCAS

These consumption adjustments can bring benefits of up to $3,000 in reduced demand per megawatt-hour for each household. If implemented on a large scale, a portion of the benefits from these plans can be returned to consumers in the form of Tokens, which can be used to drop energy bills or traded directly for instant rewards.

With more and more households incentivized to choose dynamic consumption adjustments through the Project Zero protocol, Fuse can make large bids in DRP events. This enables Fuse to provide greater and more predictable load reduction or adjustment capabilities, and we believe that utilities and grid operators are willing to pay a premium for this.

Virtual Power Plant

DER Installers (solar panels, battery storage, electric vehicles, smart appliances) often fail to collaborate with energy retailers to optimize the scale and configuration of home systems. This not only results in lower penetration rates in the market that urgently needs DER, but also causes the systems to be disconnected from the overall grid.

In the vision of FUSE, Zero incentivizes households to build new renewable energy capabilities and ensures that these new resources can be efficiently utilized. This enables FUSE to act as its own virtual power plant (VPP），将所有 DER 组合成一个灵活的实体，提供有价值的电网服务。

When the grid is facing high demand or supply shortages, Fuse instructs DER to increase energy production or release stored electricity (for example, solar and battery storage systems in virtual power plants can quickly release or absorb electricity to help maintain grid frequency within a narrow range, or smart thermostats and water heaters can temporarily shut down or adjust to provide demand-side response).

As a virtual power plant, FUSE participates in the wholesale energy market, aggregating its DER footprint in the local market, enabling it to bid at a larger and more predictable scale than pure energy retailers. FUSE can also provide services such as voltage support, which are crucial for grid stability. These services can generate substantial income, often up to $100,000 per megawatt capacity per year.

By improving the reliability of these services through advanced metering and value-added analysis-based services, we expect Fuse to obtain more favorable contract terms and higher payments. Subsequently, the proceeds generated from the operation of these markets will be feedbacked to users who contribute assets to the network.

Advanced Metering and Real-time Data

One persistent issue facing energy producers and retailers is the lack of real-time data on power plant failures, demand fluctuations, and other factors directly impacting energy production. Without this data, accurately and profitably pricing energy becomes a significant challenge.

Fuse fills this gap by collecting random minute-level data using direct relationships with consumers. These real-time inputs are fed into Fuse's advanced billing engine, guiding all pricing decisions. We believe this will enable the company to participate in the wholesale market with higher profitability, meaning providing cheaper and cleaner energy for every market of network services.

With the expansion of customer base and a clear perspective on the service grid, we believe that FUSE is better positioned than most companies to achieve profitability in the energy market and therefore able to assist other companies.

Build open protocol

Under large-scale application, Project Zero is an open platform that provides visual information on all generated and consumed energy resources, which can be accessed without permission by any participant in the energy value chain.

As Fuse accumulates more and more energy assets at the edge, Project Zero begins to act as a powerful, trusted neutral protocol layer. This is the primary correct way to build a global energy system in the 21st century: accessible energy resources connected through consistent, interoperable data standards, upon which anyone can build products and services.

The Road to Abundant Energy

Compared to the giants in the field, Fuse's unique advantage lies in using encryption coordination mechanisms to optimize the system and eliminate unnecessary links. This strategy not only enables more efficient acquisition and retention of users, but also creates a closed-loop generation and distribution process, making Fuse a potential global innovative energy retailer: through data advantages and system improvements, conducting energy transactions more profitably, promoting the popularization of renewable energy, and bringing returns to customers in every aspect.

Alan and Charles have accumulated rich operational experience in the regulated consumption market. The Fuse team is a group of customer-centric developers and market operators dedicated to addressing today's most urgent energy challenges.

Fuse is gradually advancing the Project Zero, a core project to build an open and shared platform, taking a key step towards the goal of 'almost zero cost energy'. For more details, please visit: www.zero2050.com

Statement:

1. This article is reproduced from[multicoin], copyright belongs to the original authors Shayon Sengupta (https://twitter.com/shayonsengupta) and Tushar Jain (https://twitter.com/TusharJain_). If you have any objections to this reprint, please contact the Gate Learn team (https://www.gate.io/questionnaire/3967), they will handle it in a timely manner.

2. Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.

3. The Gate Learn team translates articles into other languages. Unless otherwise indicated, reproduction, distribution or plagiarism of this translation is prohibited.

Abstract

• BTC price is consolidating at a high level around 64,000, and the trends of ETH and SOL are similar, approaching the resistance level above.
• BTC Spot ETF had a net outflow of $170 million last Friday, and ETH Spot ETF had a net outflow of $6 million last Friday.
• The holding of BTCSpot ETF in the United States has reached 930,000, setting a new historical high.
• Plume Network plans to tokenize approximately $12.5 billion in real-world assets before Q4.
• Solana Mobile officially named the second-generation mobile phone Seeker, with pre-sales exceeding 140,000 units.
• The SEC approves Nasdaq listing and iShares BTC Trust ETF related options contracts.

Market Commentary

According to gate market data, as of 4:00 on September 23 (UTC+0): [1]

• BTC - BTC price rose by 0.36% in the past 24 hours, currently trading around $64,200. The highest price in the past 24 hours was $64,008, and the lowest price was $62,370. BTC price has strong support at the $62,500 level, with resistance at the $65,000 level. In the short term, it is consolidating at high levels, and the pump trend has not been broken. [2]

• ETH - ETH price has fallen by 1.61% in the past 24 hours, currently priced at around $2,573, with a highest price of $2,621 and a lowest price of $2,525 within 24 hours. ETH is similar to BTC, currently facing resistance at the $2,800 level. [3]

• SOL - The SOL price has dropped by 2.33% in the past 24 hours, and is currently priced at approximately $144.94, with a 24-hour high of $148.99 and a low of $141.12. The SOL price has rebounded with mainstream currencies, ending the downward trend, with the hourly resistance level currently around $150.【4】
• ETF - According to SoSoValue data, on September 20th, the total net inflow of the US BTCSpot ETF was $92 million, with FBTC having the largest net inflow of $26 million.【5】 The total net outflow of the US ETHSpot ETF was $2.87 million【6】.
• Three major US stock indexes -- S&P 500 index fell 0.19%, Nasdaq index fell 0.36%, Dow Jones index pumped 0.09%. 【7】
• Spot Gold - The spot gold price is at $2,642 per ounce, with a slight 0.02% increase during the day.
• Fear and Greed Index - The Fear and Greed Index is 50, indicating that the market has returned to normal and users' confidence in the cryptocurrency market has increased. [8]

Popular Tokens

According to the gate market data, combined with the volume and price performance in the past 24 hours, the popular altcoins are as follows:

SUI - The single-day increase is about 7.88%, with a circulating market capitalization of 40.02 billion US dollars, and Gate's 24-hour volume is 2294.60 million US dollars.

Sui is a DPoS first-layer blockchain based on the Move programming language. The recent on-chain TVL has exceeded 11 billion US dollars, reaching a record high. On September 19th, Circle CEO announced the launch of USDC Sui Testnet. On September 12th, Grayscale opened a trust fund for Sui. The recent pump of Sui may be related to multiple positive news.

LOOM - Up approximately 4.65% in a single day, with a circulating market capitalization of $89 million and a Gate 24-hour volume of $7.2976 million.

Loom Network is a Platform as a Service (PaaS) blockchain solution that supports sidechain development for Ethereum-based applications. On September 7th, LOOM perpetual futures were listed on Kraken. Since then, Loom's price has experienced some Rebound from the bottom, and LOOM's recent performance may be related to active trading in the futures market. [11][12]

AAVE - The daily increase is about 3.54%, with a circulating market capitalization of 23.49 billion US dollars, Gate 24-hour volume is 2441.58 million US dollars.

AAVE is a Decentralized Finance non-custodial Open Source currency market protocol. Recently, the AAVE community initiated a proposal to propose the separation of WBTC, which will benefit the stability of the protocol platform's borrowing and lending assets. In addition, the AAVE community's new proposal proposes to launch cbBTC in version 3 and plans to deploy it on the Base chain and the ETH mainnet, which will increase the choice of BTCholders to participate in Decentralized Finance activities on Aave and further expand Aave's market share. The recent strong performance of AAVE's price may be related to such news.

Highlight Data

Contract long/short ratio, weighted funding rate According to Coinglass data, as of 4:00 on September 23 (UTC+0), the total amount of contract liquidation in the past 24 hours is about 115 million USD, with the short order contract liquidation amount exceeding 87 million USD. The long/short ratio of BTC contracts is about 1.0462, and the long/short ratio of the entire network's BTC contracts and ETH contracts is mainly Long, indicating that market participants are optimistic about the short-term price action of BTC. [15] BTCHoldings weighted funding rate is 0.0054%, and ETHereum Holdings weighted funding rate is 0.0051%. [16]

SUI TVL exceeds $900 million, setting a new record According to DefiLlama data, as of 0:00 on September 23 (UTC+0), SUI TVL exceeded 9 billion US dollars, with a 21.79% increase in the past 7 days. Among the top three TVL in the SUI ecosystem protocol are NAVI Protocol, Scallop Lend, and Suilend, with TVL of 4.21 billion US dollars, 2.22 billion US dollars, and 1.94 billion US dollars respectively, with increases of 23.11%, 16.61%, and 32.50% in the past 7 days.

As can be seen from the figure below, the recent increase in the stablecoin Token of the Sui ecosystem is relatively small, with a minor impact on the rise of Sui TVL. The SUI price rose from 0.8 USD at the beginning of September to 1.5 USD, with a rise of over 87%. Considering that Sui Token is the core asset in its Decentralized Finance ecosystem, the main reason for the recent rise in TVL can be attributed to the rise in SUI price. [17]

USDT total market capitalization breaks through 1,190 billion US dollars, reaching a new historical high According to DefiLlama data, as of 0:00 on September 23 (UTC+0), the total Market Cap of USDT surpassed $119 billion, reaching a historic high. The stable rise in the total Market Cap of USDT indicates continuous influx of new funds into the market, which has certain assistance in improving Liquidity in the crypto market.【18】

US BTCSpot ETF holdings reach a new all-time high According to Dune data, as of September 23, the US BTCSpot ETF held 930,000 BTC, a record high. This may indicate that US investors are optimistic about the price performance of BTC after the interest rate cut. As funds continue to flow into the BTCSpot ETF, the strong performance of BTC prices may be related to this. [19]

Hotspot Reviews

Plume Network plans to tokenize approximately $1.25 billion in physical assets before Q4 The modular Layer2 Plume Network, focusing on the on-chain of real-world assets, plans to tokenize approximately $12.5 billion of real-world assets (RWA) before the fourth quarter of this year, as introduced on its official Twitter account. These assets include the $5 billion private credit fund Credbull, the $3 billion Plural Energy solar power plant, several oil and gas mining rights, and the $1.2 billion medical reimbursement claims. Tokenholders will have the right to receive the income generated by these assets.

Plume Network enables the tokenization of asset classes that have traditionally been inaccessible to most investors, expanding its platform to the global blockchain and high-net-worth investor community. For asset holders, tokenization effectively addresses the lack of liquidity, long holding periods, and complexity in the trading process that are prevalent in traditional markets. Tokenization also provides asset issuers with a more flexible way to raise funds, lowers the barrier to entry for investors, and significantly improves financing efficiency. Asset classes such as private credit and renewable energy are further opened up to a wider range of investors through tokenization, offering more diverse investment options.

Given the current market expectations of a possible rate cut by the Federal Reserve, the yield of US Treasury bonds may decline. Against this backdrop, the tokenization of real-world assets may become a primary focus for investors seeking stable returns. Plume Network has brought significant benefits to investors, asset holders, and the platform itself by introducing traditionally hard-to-access asset classes to the blockchain and providing Liquidity to these assets.【20】

Solana Mobile officially named its second-generation phone Seeker, with pre-sales exceeding 140,000 units On September 19th, Solana Mobile announced that its second-generation Web3 phone is officially named Seeker and revealed that the pre-sale volume has exceeded 140,000 units. Earlier this year, Seeker started pre-selling under the codename 'Chapter 2'. The early bird price of $450 on September 21st has ended. As for hardware, Seeker is equipped with 128GB storage, 8GB memory, a 6.36-inch AMOLED screen, a 108-megapixel main camera, and a 32-megapixel secondary camera. The official also stated that Seeker's battery performance has been improved compared to the previous generation Saga, but specific data has not been disclosed. The following table summarizes the detailed hardware comparison of the first-generation Saga and Jambo, which is also a Web3 phone.

In the software aspect, Seeker is equipped with the Seed Vault Wallet developed in cooperation with Solflare Wallet, providing a seamless self-hosted experience, and users can complete transactions with a double click. The Solana dApp Store has also added reward tracking functionality, optimized the navigation system, and enhanced the dApp exploration experience, and will also launch Seeker exclusive dApp products in the future.【21】【22】【23】

SEC Approves Nasdaq Listing of iShares BTC Trust ETF with Options Contracts On September 20, the United States Securities and Exchange Commission (SEC) approved Nasdaq Inc.'s application to allow the exchange to list options contracts related to the iShares BTC Trust ETF, in order to mitigate its inherent volatility. The SEC emphasized that this approval will allow investors to hedge their BTC positions in the options market and ensure orderly trading. At the same time, other exchanges have also submitted applications to launch options products for iShares funds and other SpotBTC ETFs.

The SEC's approval of ETF-related Options listings also lays the foundation for future BTC Options listings. The emergence of hedging strategies will bring new investment strategies to quantitative and risk-averse investors, and the Liquidity of Spot ETFs may also rise accordingly. Referring to the listing process of Spot ETFs, as BTC-related financial products are approved, the resistance to the listing of related financial instruments for other encryption assets will be smaller. Of course, the introduction of Options trading may also lead to increased market Fluctuation in the short term, but in the long run, it is expected to have a more significant supportive effect on the Spot BTC price.

Financing Information

According to RootData, from September 20th to September 22nd, 2024, a total of 3 projects received financing. The specific situation is as follows: [25]

**Grass Network **—— The DePIN project Grass Network announced the completion of Series A financing, the amount of which has not been disclosed. This round of financing was led by Hack VC, with participation from Polychain Capital and others. Grass previously completed a $3.5 million seed round of financing in December last year, led by Polychain Capital. Grass allows users to monetize their internet connectivity by selling unused network resources. Grass currently has over 2 million users.

Octra - Privacy infrastructure project Octra announced a $4 million Pre-Seed financing, led by Finality Capital Partners, with participation from Builder VC and other investors. Octra is an FHE blockchain network that supports isolated execution environments and provides programmable privacy for developers. Octra adopts a custom consensus using ML for node selection, as well as a combination of PoW and PoS to ensure data security.

GraFun - BNB on-chain's meme coin Launchpad platform GraFun announced the completion of financing, without disclosing the round and amount, and established a strategic partnership with DWF Labs. This collaboration aims to support the Token launched on the GraFun platform and enhance its Liquidity. GraFun recently launched an innovative bond curve model called Fair Curve, which aims to address common issues in traditional memecoin issuance, such as price manipulation and Pump and Dump strategies, ensuring a fairer issuance process.

Airdrop Opportunity

Hamster Kombat - Hamster Kombat will launch HMSTR Token on TON on September 26 and airdrop it to players. The total amount of tokens is 100 billion, with 60% for the first season rewards and 15% for the second season. The warm-up match will start on September 21, and players can accumulate BCD to prepare for the second season. The second season is expected to be launched in the third quarter of 2024. Currently, Gate.io has listed HMSTR spot trading in pre-market trading. [26]

Participation steps:

1. Increase passive income, complete tasks and achievements, earn more game coins, and increase Airdrop allocation shares.
2. Invite friends to be active and join the Telegram channel to get extra rewards.
3. Play mini-games and cooperative games to get keys to increase Airdrop opportunities.

Reference:

1. Gate.io, https://www.gate.io/price
2. Gate.io, https://www.gate.io/price/bitcoin-btc
3. Gate.io, https://www.gate.io/price/ethereum-eth
4. Gate.io, https://www.gate.io/price/solana-sol
5. SoSoValue, https://sosovalue.xyz/assets/etf/us-btc-spot
6. SoSoValue, https://sosovalue.xyz/assets/etf/us-eth-spot
7. Yahoo Finance, https://finance.yahoo.com/markets/
8. Gate.io, https://www.gate.io/bigdata/homeindex
9. X, https://x.com/jerallaire/status/1836009972968341734
10. Gate.io, https://www.gate.io/trade/SUI_USDT
11. LOOM, https://x.com/krakenpro/status/1832093936069783835
12. Gate.io, https://www.gate.io/trade/LOOM_USDT
13. AAVE, https://governance.aave.com/t/arfc-onboard-cbbtc-to-aave-v3-on-base-and-mainnet/18988
14. Gate.io, https://www.gate.io/trade/AAVE_USDT
15. CoinGlass, https://www.coinglass.com/LiquidationData
16. CoinGlass, https://www.coinglass.com/LongShortRatio
17. DefiLlama, https://defillama.com
18. DefiLlama, https://defillama.com/stablecoin/tether
19. Dune, https://dune.com/hildobby/btc-etfs
20. Plume network, https://x.com/plumenetwork/status/1837628925738209431
21. X, https://x.com/solanamobile/status/1837127426805223714
22. Solana, https://solana.com/news/saga-reveal
23. Jambo, https://jambophone.xyz/
24. HK News, https://hk.investing.com/news/stock-market-news/article-632995
25. Rootdata, https://www.rootdata.com/Fundraising
26. Hamster Kombat, https://x.com/hamster_kombat/status/1837236545759162602

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Disclaimer Cryptocurrency market investment involves high risks. It is recommended that users conduct independent research and fully understand the nature of the assets and products before making any investment decisions. gate is not responsible for any losses or damages caused by such investment decisions.

In the 24/7 operating market of Crypto Assets, high Fluctuation provides traders with more trading opportunities. Compared to trend markets, traders try to profit from short-term price Fluctuation rather than holding assets for the long term. As one of the most common trading strategies, Fluctuation trading requires traders to have the ability of quick market analysis, decisive decision-making, and strict Risk Management.

As a Newbie trader, it is best practice to combine multiple indicators and integrate Technical Analysis and Fundamental Analysis, while knowing how to use Fluctuation to participate in the market. This will help improve the accuracy of trading decisions through comprehensive learning and trial-and-error trading. This article will introduce Fluctuation trading strategies and 8 top trading indicators for reference.

What is Fluctuation trading?

Fluctuation trading refers to the buying and selling operations conducted by traders when there is a significant fluctuation in the market price, with the aim of making profits by capturing short-term price fluctuations. The faster the price changes, the greater the fluctuation. Conversely, the slower the price changes, the lower the fluctuation.

Fluctuation traders typically do not hold assets for long periods, but rather enter and exit the market frequently. Fluctuation traders buy assets at low points of Fluctuation and sell at the next high point of Fluctuation to take advantage of price Fluctuation. Fluctuation trading can be day trading, swing trading, or part of other short-term strategies.

Characteristics of Fluctuation Trading

1. Compared to trend trading, Fluctuation trading has a higher frequency of operations

Traders may make multiple trades within a short period of time, ranging from a few days, hours, or even minutes. Especially in the highly volatile cryptocurrency industry, altcoins have significant fluctuations, and traders hold their assets for short and fast periods of time.

2. Technical Analysis oriented

Fluctuation trading often relies on Technical Analysis indicators, such as: Relative Strength Index (RSI), Moving Averages, Bollinger Bands, etc., to help traders better identify short-term opportunities in the market.

3. Risk Management is crucial

Due to the significant Fluctuation in market prices, potential returns and risks are both high. Fluctuation traders need to implement strict Risk Management strategies, including setting stop-loss and take-profit levels.

Based on the above characteristics, Fluctuation traders are able to quickly profit in a short period of time, and there are opportunities for profit regardless of whether the market is in a Bull Market, Bear Market, or Sideways oscillation. However, Fluctuation trading also comes with high risks and psychological pressure. It usually requires traders to constantly follow market changes and make quick decisions based on market trends. If the market fluctuates significantly beyond expectations, failure to stop loss or take profit in a timely manner may result in rapid loss of profits or even losses. This is especially true in encryption trading, where trading platforms offer leverage and Contract Trading services, which amplify both profits and risks.

Therefore, traders need to choose a Fluctuation trading strategy that suits their own Risk Management risk tolerance and trading style, and combine multiple effective Fluctuation trading indicators and Risk Management measures to increase the success rate.

8 Best Fluctuation Trading Indicators

By familiarizing with multiple Fluctuation trading indicators, traders can better grasp market trends and make quick decisions in rapidly changing markets.

These indicators provide different perspectives on market information, including trends, trading volume, momentum, etc., which can provide a more intuitive and comprehensive deduction of short-term price changes, helping traders determine entry and exit points, while also helping to identify market sentiment and potential turning points, controlling risk by setting stop loss and take profit points.

The Fluctuation trading indicators can generally be divided into the following categories:

1. Trend Indicator

Trend indicators are used to identify the primary trend direction of the market and help traders determine the pump or downward trend of prices. Common indicators include: MA (Moving Average), MACD.

2. Momentum Indicator

The momentum indicator is used to measure the speed and strength of price changes, helping traders determine the market's Overbought or Oversold status, as well as potential reversal points. Common indicators include: Relative Strength Index (RSI), Williams %R, and Stochastic Oscillator.

3. Trading Volume Indicator

The Trading Volume indicator is used to analyze the changes in market volume, helping to confirm the strength or possibility of a trend reversal. Traders can assess the effectiveness of price fluctuations. Common indicators include Trading Volume (Volume) and On-Balance Volume (OBV).

4. Volatility indicator

The Volatility indicator is used to measure the volatility of market prices and helps traders identify whether the market is in a calm or active state. Common indicators include Bollinger Bands and Average True Range (ATR).

5. Mixed Index

The composite indicator combines various types of analysis methods to provide multidimensional market analysis. For example, the Parabolic SAR combines trend tracking and momentum analysis to provide market reversal signals.

Below are the top 8 best Fluctuation trading indicators.

1. Relative Strength Index (RSI)

RSI is typically used to measure the Overbought or Oversold status of an asset, with values ranging from 0 to 100.

• RSI > 70 is usually considered as Overbought, which may indicate an imminent pullback.
• RSI < 30 is usually considered as Oversold, which may indicate that a Rebound is imminent.

It should be noted that RSI is not an absolute indicator. In a strong trend, RSI may remain at high or low levels for a long time.

(source: gate)

As shown in the BTC daily candlestick chart, during late January to mid-March this year, BTC initiated a strong pump trend. Despite the BTC daily candlestick RSI briefly touching 80, there was little retracement during the pump, indicating strong momentum. It wasn't until mid-March, after the daily candlestick RSI remained close to the high level of 90 for a sustained period, that the trend finally reversed, leading to a oscillating decline.

2. MA (MA)

MA smoothes price data by calculating the average price over a certain period of time, helping traders identify and confirm market trends. The main types are:

Simple Moving Average (SMA): Calculate the simple arithmetic average of all prices within the specified period.

Index MA (EMA): giving higher weight to recent prices, reacting faster to market changes.

Weighted Moving Average (WMA): Calculate the average value based on custom weights.

• When the price is above the MA, it is usually considered a rise trend.
• When the price is below the MA, it is usually considered a downtrend.
• When multiple MA lines converge, it may indicate that a significant Fluctuation is about to occur.

MA is often seen as a dynamic support or resistance level. When a crossover signal occurs, such as when the short-term MA crosses the long-term MA, it may indicate a trend change.

As shown in the chart below, after the 9-day EMA on the 4-hour chart of BTC crossed above the 26-day EMA, BTC entered a short-term pump trend. This crossover point is called a "golden cross," which is usually considered a buy signal. Conversely, the crossover point is called a "death cross," which is typically considered a sell signal.

(source: gate)

However, it is important to note that MA works better in trending markets. In a volatile market, MA may generate a large number of false signals. Therefore, traders should not rely solely on MA but should analyze comprehensively in combination with volume and other technical indicators.

3. Bollinger Bands

Bollinger Bands were created by John Bollinger in the 1980s to measure market volatility and potential price ranges.

Composition of Bollinger Bands:

Midline: Typically a 20-period Simple Moving Average (SMA).

Upper band: The middle band plus two standard deviations.

Lower band: subtract two standard deviations from the middle band.

The Bollinger Bands is a Fluctuation indicator, and the widening of the band indicates an increase in Fluctuation, while the narrowing of the band indicates a decrease in Fluctuation. When the Bollinger Bands are extremely narrow, it usually indicates that a significant Fluctuation is imminent.

In the Fluctuation market, the Bollinger Bands can be seen as an 'Oversold' signal.

• Prices approaching or breaking above the upper band may indicate Overbought.
• Prices approaching or breaking below the lower rail may indicate Oversold.

It is important to note that the Bollinger Bands perform differently in trending markets and ranging markets. In a trending market, asset prices may stay above or below the Bollinger Bands for a long time, so it should not be simply viewed as a "sell or buy" signal at this time.

As shown in the figure below, BTC 4-hour chart, its PA has been fluctuating between the lower and upper bands.

(source: gate)

4. MA Convergence Divergence (MACD)

MACD consists of two lines: the MACD line (fast line) and the signal line (slow line). Their cross and relationship with the zero line can provide trading signals.

• MACD line crosses above signal line: may be a buy signal
• MACD line crosses below the signal line: may be a sell signal
• MACD histogram transitions from negative to positive: may indicate a rise in momentum
• Divergence between MACD and price may indicate a trend reversal.

For example, as shown in the red box in the daily chart of BTC, when the MACD line crosses the signal line and the MACD histogram turns into a positive value, the pump momentum of BTC is enhanced, and the pump continues.

(source: gate)

5. Trading Volume （Volume）

Although Trading Volume is not a complex technical indicator, it is extremely important in verifying the strength of PA.

• Price pump accompanied by an increase in volume: usually considered a strong rising trend
• Price decline accompanied by an increase in volume: may indicate strong selling pressure
• When the price changes but the volume is low: it may indicate a lack of trend sustainability
• Sudden surge in volume: may indicate an important market turning point

Looking at the daily chart of BTC, there have been significant increases in volume, and subsequent BTC movements have all experienced intense Fluctuation.

(source: gate)

6. Stochastic Oscillator（Stochastic Oscillator）

The Stochastic Oscillator is a momentum indicator consisting of %K line and %D line, used to determine the position of the price within a certain period. Its operation is similar to the RSI indicator, but the calculation method is different.

• %K line crosses above %D line: potential buy signal
• Crossing of %K line below %D line: may be a sell signal
• Indicator value exceeds 80: possibly Overbought
• Indicator value below 20: possibly Oversold

(source: gate)

As shown in the above chart, in the BTC daily chart, when the Stochastic Oscillator is repeatedly below 20, BTC is also in a phase of bottoming out, indicating an oversold market and a demand for rebound. However, it is important to note that although the Stochastic Oscillator is a useful tool, it is not omnipotent. Traders should use it in conjunction with other technical analysis indicators and fundamentals to improve accuracy of judgment.

7. Fibonacci Retracement

The Fibonacci pullback is based on the Fibonacci sequence and is used to identify potential support and resistance levels. Common pullback levels include 23.6%, 38.2%, 50%, and 61.8%.

• In the rise trend, these levels may become support levels for pullback.
• In a downtrend, these levels may act as resistance levels for rebounding.

For example, in the recent big dump of BTC, the price fell from $70,018 to $49,116. According to the commonly used Fibonacci levels, BTC has repeatedly found support at the 38.2% level during subsequent rebounds, while the 61.8% level has become a resistance level for rebounds.

(Source: Tradingview)

8. Average True Range (ATR)

ATR is a Fluctuation indicator developed by J. Welles Wilder Jr. It measures the average price Fluctuation of an asset over a specific period of time, regardless of price direction, and can help traders set stop-loss levels and target prices.

• High ATR value: indicates high volatility, which may indicate significant market turning points or breakthroughs
• Low ATR value: indicates low volatility, may indicate consolidation or the end of a trend
• Used to set stop loss: for example, stop loss can be set 2 times the ATR outside the get on board price

(source: gate)

For example, if the price of BTC is $58,500 at this time, the daily candlestick ATR is 2470, which means the daily average price Fluctuation of BTC is about $2470, so the stop-loss point can be set at a position 2 times ATR below the get on board price, which is about $53,560 ($58,500-2470*2).

Conclusion

In general, the Fluctuation trading indicator provides a strong foundation for Technical Analysis in Fluctuation trading, but their effective use requires a deep understanding of the market, continuous learning, and strict Risk Management. As a trader, it is best to use multiple indicators, validate signals, and customize parameters based on your own trading risk to continuously optimize your trading strategy. At the same time, traders should also combine fundamental analysis, market dynamics, etc., and flexibly adjust their trading logic.

1. Introduction

With the advancement of the information technology industry, including the improvement of computing capabilities and the expansion of big data availability, the performance of artificial intelligence (AI) models has also significantly improved. In recent years, the performance of AI has reached or surpassed human capabilities in multiple fields, and it has been rapidly applied to various industries such as healthcare, finance, and education.

One representative example of the commercialization of AI is the generative AI model ChatGPT developed by OpenAI in November 2022, which is capable of understanding and responding to human natural language. ChatGPT gained 1 million users in just 5 days after its release and reached 100 million monthly active users within two months, making it the fastest rising consumer application in history.

NVIDIA, which designs and manufactures GPUs for training and computing major AI platforms, has also benefited greatly from this trend. In the first quarter of 2024, NVIDIA's net profit rose by 628% YoY, reaching $14.8 billion. Its stock price increased by about 3 times YoY, and its Market Cap reached $3.2 trillion, demonstrating outstanding performance.

The rise of AI has also had a significant impact on the encryption market. In June 2022, as the Non-fungible Token art projects flourished, DALL-E 2, developed by OpenAI as an AI that can generate high-quality images based on text, led to an 8-fold increase in the mention of AI keywords in domestic Cryptocurrency Telegram channels. In addition, from the second half of 2022, efforts to directly combine AI with blockchain have begun to emerge, and the number of AI mentions has doubled again.

The rise of AI in the encryption market has also had a significant impact. In June 2022, when Non-fungible Token art projects were popular, DALL-E 2 developed by OpenAI was released. It is an AI that can generate high-quality images based on text, which has increased the number of mentions of AI keywords in major cryptocurrency Telegram channels in South Korea by 8 times. In addition, since the second half of 2022, there have been more attempts to directly integrate AI and blockchain, and the number of mentions of AI has further increased by 2 times.

The encryption community's high level of follow-up to AI is also reflected in the investment trend of AI-related encryption projects. According to virtual asset statistics website Coingecko, as of August 20, 2024, the total Market Cap of 277 Block Chain projects classified as AI Domain rose rapidly to $21 billion within two years of the start of the emergence of AI and Block Chain projects in the second half of 2022, about 25% higher than the Layer 2 category. However, so far, the Block Chain projects in the AI field that have emerged and been followed have mainly adopted the use of Block Chain technology to solve the limitations exposed in the development of the AI industry. The main application cases are as follows:

• Decentralization GPU Network: Using blockchain technology to create a distributed GPU network, anyone can contribute GPU Computing Power and receive Token rewards, solving the access threshold problem brought by the high GPU costs required for AI model training (such as IO.NET, Akash Network).
• Decentralization AI Training and Model Development: Multiple participants contribute to AI training and model development, using blockchain technology to obtain Token rewards to address AI bias issues caused by centralized AI development environments (such as Bittensor）。
• On-chain AI Market: A Decentralized AI market project that leverages blockchain technology to transparently evaluate and trade the performance and reliability of AI models/agents, in response to the demand for industry and function-specific AI models/agents (such as 01928374656574839201).[SingularityNET]Autonolas,(https://olas.network/?ref=research.despread.io).

In addition to these examples, various attempts to overcome the challenges faced by the AI industry using blockchain infrastructure, such as Decentralized Data Marketplace and IP protocol, are constantly emerging. These attempts create a synergistic effect by providing a more stable infrastructure for the AI industry while expanding the application scope of blockchain technology. On the other hand, integrating AI into the blockchain ecosystem also has unlimited development potential. Especially in Decentralized Finance services based on permissionless systems, introducing AI to reduce reliance on trusted third parties could achieve various functions that are difficult to implement with existing smart contracts. This article will specifically explore the application cases of AI in the current Decentralized Finance protocol, the challenges faced, and the future development of AI in Decentralized Finance.

2. Intelligent Decentralized Finance

AI has the ability to perform real-time analysis of a large amount of data and draw conclusions. This ability can play an important role in concretizing the data of returns and risks provided by the Decentralized Finance protocol to assist users in fund execution and Risk Management. In this case, AI mainly functions on the user interface of the Dapp, enabling existing Decentralized Finance protocols to utilize AI without major structural modifications.

A representative example is Yearn Finance, which is a yield farming aggregator. In order to provide a safer investment environment for users, Yearn Finance is collaborating with the AI agent construction platform GIZA to establish a real-time strategic risk assessment system for the Yearn Finance v3 insurance vault.

However, what I am more focused on is the integration of AI and Decentralized Finance ecosystem, empowering the Decentralized Finance protocol with the autonomous thinking and acting capability of AI. The current Decentralized Finance protocol reacts passively to user-generated transactions. In other words, the Smart Contract of the protocol operates in a predefined manner based on user interactions. However, by integrating AI into the Decentralized Finance protocol, the protocol itself can analyze market conditions, make optimal decisions, and automatically generate transactions. This enables the emergence of new types of Financial Service provided by Decentralized Finance protocols, which were previously difficult to achieve.

Next, we will discuss an example of an intelligent Decentralized Finance protocol that uses AI as its main operating mechanism.

2.1. Fyde Treasury: AI Token Fund

Fyde Treasury is a protocol that provides a basket-type fund service called Liquid Vault, which jointly operates multiple Tokens and is managed by AI. Users will receive LiquidityToken $TRSY corresponding to the assets deposited in Liquid Vault and can use this Token.

Asset Selection and Fund Operation Methods

The key mission of Liquid Vault is to increase the proportion of low Fluctuation Tokens in the market downturn, thereby providing users with a lower decline rate, and ultimately offering a portfolio that outperforms other asset classes from a long-term perspective. Fyde Treasury selects assets to include in the Liquid Vault portfolio based on the following three-step criteria:

• Evaluate if there is sufficient trading Liquidity
• Review the background of the protocol founder, protocol code audit, etc., to determine if there are any issues
• Analyze on-chain data through AI to evaluate the existence of Whipsaw trading, the concentration of Tokens, natural rise trends, etc.

Tokens selected through these standards will be included in the Liquid Vault investment portfolio. Fyde Treasury also uses AI in the asset management process of Liquid Vault, as follows:

• Market analysis and forecasting: Analyze on-chain transaction data, market trends, news, etc., to predict future market trends.
• Weight calculation and rebalancing: Calculate the optimal token weight based on the predicted market trends and recent performance and volatility of tokens in the investment portfolio, and execute rebalancing.
• Risk Management and response: Real-time and fast identification of governance attacks, Liquidity pool depletion, abnormal transactions in specific Wallets, etc. in each Token in the investment portfolio, and adjust the portfolio or isolate the relevant Tokens from the portfolio.
• Advanced asset management strategy: continuously evaluate portfolio performance, analyze the effectiveness of the strategy, and derive data to modify and develop the strategy. Then, conduct comparative testing between existing and newly derived strategies, measure performance, and reflect on the actual operational strategy.

As of the writing date of August 23, the Liquid Vault portfolio contains a total of 29 Tokens, covering multiple industry Tokens based on the Ethereum network.

Liquid Vault dashboard, source: Fyde

In addition, Fyde Treasury offers a feature that allows users to deposit governance tokens of specific protocols in the Liquid Vault and maintain their governance voting rights by providing Liquidity Tokens for these tokens. The governance tokens deposited in the Liquid Vault will be sent to the depositor's Wallet in the form of $gTRSY-token, which can be used to execute governance voting for the corresponding protocol in the Governance section of Fyde Treasury (https://app.fyde.fi/governance?ref=research.despread.io).

However, voting rights will be affected by the token weight in the investment portfolio, so voting rights may change every time the investment portfolio is adjusted.

2.1.2. LiquidityMining Activities

Fyde Treasury is rewarding Liquidity Providers in the $TRSY (Liquid Vault Liquidity Token) market with Fyde Points and promises to distribute $FYDE (the governance token of Fyde Treasury) based on these points in the future.

Unlike other projects' Liquidity Mining activities, users must deposit Token pairs directly on the Decentralization exchange and receive Tokens or points. However, Fyde Treasury accepts users to deposit $FYDE into the internal Liquidity Mining contract of the protocol and directly ...01928374656574839201Uniswap v3 (a Decentralized exchange that allows for setting the range of Liquidity provision) executes Liquidity provision.

In the process of providing Liquidity for Uniswap v3, it calculates and executes the best trading path to convert a portion of $FYDE deposited in the Liquidity Mining contract to $ETH through an AI-based simulation environment. In addition, based on market conditions, AI also manages and optimizes the range of liquidity provided on Uniswap v3 in real time, achieving about 4 times the capital efficiency compared to providing liquidity on a general Decentralization exchange with the same capital.

AI simulation dashboard, source: Fyde Docs

In this way, Fyde Treasury is building a basket-type fund to utilize AI for real-time management of assets deposited by users in the protocol, minimizing human judgment and preventing various risks in the market.

2.1.3. protocol representation

Since the launch of Fyde Treasury in January 2024, its total value locked (TVL) has steadily risen, reaching $2 million, and has been consistently maintained at around $2 million. However, due to the continued market weakness since the end of May, the value of the $TRSY Token has shown a -35% return over the past three months.

However, when comparing the returns of $TRSY to other major Tokens in the Ethereum ecosystem, it can be seen that $TRSY Token shows a smaller decline on the basis of relatively stable price fluctuation.

Fyde Treasury has been online for less than a year, and Fyde's AI model is constantly learning and developing through market data. Therefore, with the accumulation and optimization of AI learning, it may show better performance in the future, so it is necessary to follow the future development direction and performance of Fyde Treasury.

2.2. Mozaic Finance: AI Yield Optimizer

Mozaic Finance is a yield optimization protocol that optimizes yield farming strategies using specific Decentralized Finance protocols through AI. Mozaic Finance provides users with asset management strategies for various Decentralized Finance ecosystems in the form of a treasury, and uses two types of AI for strategy optimization:

• Conon: Real-time analysis of on-chain data, with prediction market conditions and yield farming strategies, the APY changes.
• Archimedes: Calculate the best investment strategy and execute fund allocation based on the predictive data obtained by Conon.

Therefore, in Mozaic Finance, the AI agent Conon acts as an 'analyst', while Archimedes serves as a 'strategist', working together to manage the assets deposited by users.

2.2.1. Treasury Type

• Hercules: A treasury that allows for yield farming using stablecoins, where depositors will receive MOZ-HER-LP Tokens as Liquidity Tokens.
• Assets deposited by users in the Treasury are provided as Liquidity to bridgeprotocol StarGate to generate yield. AI utilizes [Stargate]The feature of (https://stargate.finance/farm?ref=research.despread.io), real-time bridge and rebalance the treasury assets to higher-yield Liquidity pools, although it is the same asset, the APY settings of each network will vary according to the degree of Liquidity.

StarGate Farm dashboard, source:Stargate

• Theseus: A treasury that generates yield using various Fluctuation assets, depositors will receive MOZ-THE-LP Token as the LiquidityToken.
• Assets deposited by users in the treasury are deposited into the GM pool of the GMX protocol, which is a Decentralization perpetual futures exchange that provides trading Liquidity and incentives for traders. In this process, the Liquidity deployment will consider the volatility and Intrerest Rate of each asset in the GM pool, and may increase the proportion of stable coins and deposit them into StarGate to generate additional income depending on market conditions.

GMX GM Pool Dashboard, Source:GMX

• Perseus: A treasury actively utilizing the PoL (Liquidity Proof) Consensus Mechanism to provide Liquidity for the upcoming Mainnet of the Berachain ecosystem protocol in order to obtain network rewards. The Mozaic Finance team is currently developing and preparing to launch using Berachain Testnet strategy, specific information will be disclosed later.

For more information about Berachain and the PoL Consensus Mechanism, please refer to the article 'Berachain — The Bear Catching Two Rabbits: Liquidity and Security'.

Unlike Fyde Treasury, which builds Token basket funds, Mozaic Finance is a protocol that optimizes Liquidity supply strategies and processes through AI, and conducts Risk Management when depositing user assets into Decentralized Finance protocols.

As of January 2024, the expected APYs of the Hercules and Theseus vaults are approximately 11% and 50%, respectively, performing well. However, due to the fund theft incident at the Mozaic Finance vault, both vaults are currently suspended.

As of January 2024, the expected annual returns of the Hercules and Theseus vaults, source: @Mozaic_Fi

2.2.2. Fund Theft Incident and Mozaic 2.0

The Mozaic Finance fund theft incident occurred on March 15, 2024, when it was transitioning to [Hypernative]The new security solution developed by (https://www.hypernative.io/?ref=research.despread.io) is aimed at enhancing on-chain risks and security.

Before the security update was completed, an internal developer discovered that the treasury funds could be stolen using the Private Key of a core team member. They hacked into the core team member's computer to obtain the Private Key. Then, using the stolen Secret Key, they stole approximately 2 million dollars worth of assets and transferred them to a centralized exchange for liquidation.

Due to this incident, the Mozaic Finance team has temporarily suspended operations for the Hercules and Theseus vaults, causing the value of $MOZ (governance and protocol fee collection Token) to drop by about 80%. Following the theft, the Mozaic Finance team transparently disclosed the progress of the incident and collaborated with a security company to trace the stolen assets, applying for the freeze and return of the stolen funds from the exchange where the stolen assets were stored, in an effort to restore protocol operations.

Fortunately, the work of returning all stolen funds is currently in progress. While waiting for the stolen funds from the centralized exchange to be returned, the team is preparing to launch Mozaic 2.0, including the following improvements:

• Enhanced Security: Code audits and security enhancements are conducted by security specialist companies such as Trust Security, Testmachine, and Hypernative.
• AI model improvement: comprehensively upgrade the existing Archimedes model, predict and learn black swan scenarios that have not occurred due to lack of data. At the same time, detect abnormal decisions and set flags for manual review and model improvement.
• Improve user experience: Improve the UI/UX of Dapps and enhance the accessibility of Dapps for users in various chain environments through account abstraction and bridge service integration.

Therefore, despite experiencing a major crisis due to fund theft, Mozaic Finance is still preparing to launch Mozaic 2.0, striving to provide users with a more secure and efficient asset management service.

3. Challenge: The Dilemma of AI's Decentralization and Scalability

So far, we have explored how smart Decentralized Finance protocols like Fyde Treasury and Mozaic Finance can use AI as a core component of Decentralized Finance applications. The benefits of smart Decentralized Finance protocols leveraging AI can be summarized as follows:

• Establish a new Decentralized Finance protocol model through autonomy.
• By analyzing and optimizing the methods of fund operation, the capital efficiency is improved
• Real-time analysis and response to risks such as abnormal transactions

Currently, the integration of Blockchain and AI is mainly focused on establishing Blockchain infrastructure to address the limitations of AI. However, due to the aforementioned benefits, efforts to introduce AI into Decentralized Finance protocols are expected to increase. Of course, there are also challenges that need to be addressed in the process of combining these two fields.

AI needs an environment that can process a large amount of data quickly, but the current blockchain infrastructure cannot meet the data processing speed required by AI. For example, the ChatGPT-3 model estimates that it needs to process trillions of data per second to generate answers, which is about ten million times the maximum TPS (transactions per second) of Solana, which is 65,000.

In addition, even if the Blockchain infrastructure develops to the point where AI computations can be carried out, the transparency of public Blockchains may expose the training data and decision weights of AI models to the public. This restricts the predictability of transactions generated by AI and may make them susceptible to various external attacks.

Therefore, including the above Fyde Treasury and Mozaic Finance, those who want to use AI's Decentralized Finance protocol are currently running AI on centralized servers and interacting with the blockchain based on the results.

However, this approach has led to a situation: users depositing assets in the protocol must trust the honesty of the AI management team, which undermines the principle of Decentralized Finance to eliminate the need for trusted third parties through Smart Contract and provide a trustless transaction environment. The dilemma between Decentralization and scalability in the use of AI is considered a challenge that Decentralized Finance applications must address, and zkML (zero-knowledge machine learning) technology is being considered as an alternative solution.

3.1. zkML (Zero-Knowledge Machine Learning)

zkML is a technology that combines Zero-Knowledge Proof (ZKP) and Machine Learning (ML). Zero-Knowledge Proof is an encryption technology that can prove the content without disclosing specific data, thereby achieving privacy protection and data integrity verification. zkML applies these characteristics of Zero-Knowledge Proof to machine learning, allowing the proof of correct computation of model outputs without revealing inputs, parameters, and the internal workings of AI models.

In addition, by constructing Smart Contracts of Decentralized Finance protocol to verify Zero-Knowledge Proof, and generating on-chain transactions only when AI models run normally as expected without external interference, AI can be safely integrated into the Decentralized Finance protocol.

For example, the previously introduced Mozaic Finance project plans to introduce Zero-Knowledge Proof technology into the protocol in the future, and in its document, it states that this will enhance Archimedes' ability to make honest decisions and manage the fund pool in real time.

However, the history of Zero-Knowledge Proof technology is not long, and a lot of discussion and development is still needed before it can be widely adopted. In particular, generating Zero-Knowledge Proofs for complex AI models, while more efficient than implementing AI models directly on-chain, still requires more computational cost and storage capacity than what current blockchain infrastructure can provide. Therefore, to make zkML truly feasible, further advancement and optimization of Zero-Knowledge Proof and blockchain infrastructure are needed.

4. Proxy Economy and Identity Proof

I anticipate that with the continuous development of blockchain and artificial intelligence technologies, they will gradually overcome the challenges required for their integration. In addition, based on this progress, I expect that in the near future, most Decentralized Finance (DeFi) protocols will integrate artificial intelligence as part of their operational mechanisms.

In addition, with the advent and increasing maturity of AI agent deployments and trading platforms such as SingularityNET and Autonolas, an environment is being created where AI can be integrated not only at the protocol level, but also for individual users to easily leverage AI agents. In other words, every "person" participating in the blockchain ecosystem will be able to build and leverage a smart Decentralized Financeprotocol optimized for individuals.

For example, Autonolas's AI agent analyzes on-chain and off-chain data on the Gnosis network's prediction market platformOmen The number of bets and activities executed on-chain has steadily increased, generating over one million transactions within a year by July 2023.

It is expected that personalized artificial intelligence agents capable of efficient 24-hour capital management will increase in the future and actively participate in the blockchain ecosystem. This will lead to the utilization of idle Liquidity and more efficient capital operations, greatly enhancing the overall Liquidity of the ecosystem. Ultimately, transactions between artificial intelligence agents are expected to become the main activity of the ecosystem, forming a new agent-based economic ecosystem.

In addition, as personalized AI agent models become more intelligent in the future, the scope of activities for these personal agents may expand to include on-chain asset management tailored to individual preferences, capturing and participating in Airdrop opportunities, and participating in governance.

Therefore, as artificial intelligence agents increasingly accurately mimic human behavior, it will become more difficult to distinguish between 'real' human users and AI agents. Therefore, the importance of mechanisms that prove user humanity and uniqueness, such as Proof of Personhood, is expected to be highlighted, especially in protocols that value human values and agency rights.

4.1. Proof of Humanity

Proof of Personhood is a mechanism that proves the humanity and uniqueness of an individual by associating characteristics that only humans can possess with personal accounts on the network. The currently discussed and emerging methods can be roughly divided into two categories:

• Based on physical authentication: using unique biological information such as face, fingerprint, iris, etc., for identity verification through hardware.
• Based on behavioral analysis: analyzing users' social graph and reputation based on the network activity of specific account and its interaction with other accounts, judging humanity and uniqueness.

Behavior-based proof of humanity methods are relatively good at protecting user privacy and do not require specialized hardware to identify the body, making them more accessible. However, they require a large amount of network data to improve the accuracy and reliability of the proof. With the continuous development of AI agents, their judgment capabilities may decline, so it is expected that physical authentication-based proof of humanity will be more widely used in the future.

A representative protocol that adopts physical authentication-based proof of humanity is Worldcoin, the project was co-founded by Sam Altman, co-founder of OpenAI, aiming to distribute unique digital identities to all people globally through proof of humanity, implement universal basic income, and prepare for future scenarios of unemployment due to the development of artificial intelligence.

4.1.1. Worldcoin

Worldcoin is a physical authentication and human proof project that uses a special hardware called Orb to recognize people's irises. After iris recognition, World ID will be issued for the iris on the Worldcoin network, and a Private Key that can access the World ID will be generated on the user's personal device.

Worldcoin Orb, source: Worldcoin White Paper

At this point, the Worldcoin network only stores the hash value of scanned iris data, so that users' irises cannot be reconstructed or identified. Whenever World ID needs to be verified, the user's device generates a Zero-Knowledge Proof and sends it to the network, thus protecting the data privacy of personal on-chain activities.

However, there are still challenges such as transferring World ID through devices that hold the Private Key and accessing the Private Key through AI agents, as the system only recognizes iris when issuing World ID. Worldcoin is working on addressing these issues by discussing the introduction of biometric authentication systems and developing AI detection Algorithms based on behavioral analysis when using World ID.

5. Conclusion

In this article, we explore the new types of services that have emerged as artificial intelligence integrates into the blockchain ecosystem, the challenges faced by these protocols, and the future of blockchain ecosystem based on artificial intelligence agents.

In the future, artificial intelligence and blockchain technology will continue to develop and integrate, complementing each other's limitations. In this way, it is expected to provide a more convenient environment for individuals to access and utilize artificial intelligence and blockchain more easily.

Especially in the future on-chain economic ecosystem centered on artificial intelligence agents, anyone can easily use and provide Financial Service without the need for high-level financial knowledge. This is expected to significantly increase the Liquidity of the on-chain ecosystem and expand the inclusiveness of the "Financial" industry.

In addition, artificial intelligence and blockchain can not only influence each other, but also serve as the infrastructure of various industries. Therefore, the development of these two technologies will bring wide-ranging changes to the whole society, surpassing their impact on a single industry.

However, institutional regulation related to data privacy protection and AI responsibility in AI, as well as institutional regulation on the security nature of Tokens on-chain, will have a significant impact on the future development direction and industry structure of these technologies. Therefore, it is necessary to closely follow the future regulatory content of the AI and blockchain industries that will be established.

Ultimately, we hope that the development of these technologies will provide a better environment for humanity and help address various problems in our society.

Statement:

1. This article is reproduced from despread research, the copyright vesting original author [despread research]. If you have any objections to the reprint, please contact the Gate Learn team, and the team will handle it as soon as possible according to the relevant process.
2. Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
3. The other language versions of the article are translated by the Gate Learn team. It is not allowed to copy, distribute, or plagiarize the translated articles without mentioning Gate.io.

Repost the original title "Interpretation of Sonic: The first L2 born for games on Solana, leading the gaming feast of "One-click Chain Release""

The market is sluggish and lacks phenomenon-level new projects to drive narrative change.

But looking back, Solana is still an ecosystem worth paying attention to. There is a clear demand from users, and the trading frequency and activity have also been maintained at a certain level.

When both liquidity and attention are accumulating, there is a need for an opportunity to break the dull market structure.

Currently, games on Solana seem to have been overshadowed by MEME heat, but the potential is enormous:

First of all, there are still no games that have run out of the ecological volume related to ETH; secondly, in the context of mobile and narrative rotation, the Solana game track as a whole is to be activated to accept existing liquidity and attention.

From 'Dull Summer' to 'Game Feast', which projects will become key drivers in terms of technology, ecosystem, and funding?

Sonic, the first Layer2 built for gaming on Solana, is also the first modular SVM chain on Solana, which may be worth paying attention to.

The project proposes a Rollup extension framework called HyperGrid, which combines Solana's speed and the customizability of game-specific rollups to create conditions for the explosion of the gaming ecosystem on Solana.

In June of this year, Sonic also received a $12 million financing led by Bitkraft, with participation from Galaxy and Big Brain Holding. The token is expected to have its TGE in October. Public information shows that Sonic is also carrying out game and partner cooperation plans, trying to bring more games into the Solana ecosystem through incentives.

For even more Degen users, Sonic has recently started node pre-sales, which gives even more reason to pay attention to this project.

In this issue, we will enter Sonic to discuss its existence and conduct research from the perspectives of products, technology, and ecological resources.

Times make heroes, Sonic's self-consistency and timing

Don't rush yet.

Whether a project is worth paying attention to, the 'self-consistency' in its requirements and narrative is important.

Before you understand Sonic itself, you must be more puzzled: Solana, which is already fast enough, still needs L2? What abilities does Sonic itself have to meet these needs?

At first glance, stereotypes are all about problems. But on closer inspection, you will discover new market opportunities.

For example, Solana's second-generation mobile phone sales received 60,000 orders within 3 weeks, indicating a significant demand for mobile devices in the market. However, while mobile devices are available, there is a lack of games in the ecosystem (leaving aside the question of whether Web3 games are fun, the presence of games is the primary concern):

The main Web3 games at the moment are mainly on Polygon/BNB/ETH. Although Solana is referred to as the so-called retail chain, the game category that is closest to retail investors is actually still underdeveloped.

According to data from DappRadar, none of the TOP25 UAW (Unique Active Wallet) games are on Solana; Similarly, none of the Market Cap TOP10 games are on Solana.

This is like the two sides of a coin, where you can see both the shortcomings of the current game and the opportunities it offers for improvement.

For another question, whether Solana needs L2, the technology, public opinion, and applications have actually shown demand.

Technically, the Solana main chain L1 faces foreseeable performance pressure and needs a way to share it, while L2 Rollup is optional.

With the faster growth of dApps and Decentralized Finance activities on Solana, the daily on-chain transactions have exceeded 200 million in January 2024, and conservative estimates suggest that the volume will exceed 4 billion transactions in 2026.

Under such predictable pressure, Solana's TPS is around 2500-4000, and the average ping time of Solana cluster fluctuates between 6 seconds and 80 seconds; when TPS becomes increasingly saturated or exceeds 4000, the success rate of Solana transactions only reaches 70% to 85%.

At the same time, when there is frequent Meme trading on the chain, other applications are affected; when the game has high-frequency interactions, it will also be to some extent dragged down by the performance of L1.

In terms of application, there are already projects considering the design of Rollup-like solutions.

Due to the lack of advanced data structures tailored for games in Solana, project developers need to manually implement them in smart contracts, making it more challenging to develop games on Sol; at the same time, the absence of a caching mechanism also means that common operations in games such as cross-transaction calls and data account access are difficult to handle, further increasing the difficulty of game development.

Non-gaming projects, such as Pyth building application chains on Solana, and Grass packaging high-frequency DePIN data using zk rollups and transmitting them to L1, are exhibiting L2-like behavior.

The same goes for applications (games). Obviously, they prefer to have their own L2 Rollup, which is more conducive to capturing the value of their own costs, privacy, and achieving real-time settlement.

And in the public opinion, the founders of Solana-related ecological projects are also constantly discussing the need to do L2.

From the perspectives of performance, ecology, applications, and communication, Solana needs a gaming chain to expand its ecosystem.

Changing the perspective from the perspective of investment research, putting the above information together means: whoever first solves the needs in the Solana ecosystem has a greater chance of becoming the next Alpha.

This is the coherence and opportunity faced by Sonic.

Hypergrid, the secret weapon for easily 'one-click chain launch'

After understanding the necessity, let's take a look at how Sonic plans to do L2.

Sonic's uniqueness lies in Hypergrid, a horizontally scalable Rollup architecture designed specifically for Solana SVM.

You can think of Sonic as a trap L2 built on top of HyperGrid, which is Solana's first concurrent scaling framework; Furthermore, the name HyperGrid implies that it allows multiple independent grids to run simultaneously, each grid can handle transactions independently, but ultimately achieves consensus and confirmation through the Solana mainnet.

The benefit of this design is that it can greatly enhance the scalability and performance of the system.

You can think of it as a "autonomous system" that can be both autonomous and centralized:

• Independent Operation: Each grid can independently handle its internal transactions, including validation, recording, and state changes. This means that the operation of an application within one grid will not affect the operation of other grids.
• Connecting to the Mainnet: Although the Grid can operate independently, the final consensus and confirmation still rely on the Solana Mainnet. This ensures data consistency and security for all Grids.
• Flexible expansion: Developers can choose to use the public grid as needed or create an independent grid for higher performance isolation and control.

If you still can't understand, a better analogy is a large shopping mall and independently operated shops.

Think of HyperGrid as a large shopping mall, with each grid being an independent store in the mall. Each store (grid) can operate independently, handling its own transactions and customers (application transactions).

Real estate (Solana Mainnet) is responsible for the security and management of the entire marketplace, ensuring that transaction records and status changes of each store are ultimately confirmed. If a store is particularly busy, it can open a new branch (create a new independent grid) to ensure smooth operation without affecting other stores.

In terms of architecture, Hypergrid is actually composed of the following parts:

• Solana Base Layer: Responsible for final consensus and data recording, this layer receives batch zero-knowledge proofs (Batch ZK proofs) from Hypergrid for settlement and shares state information.
• Hypergrid: A shared sorting network that is responsible for coordinating and managing multiple grids, and also contains multiple validators. Each validator is responsible for processing and validating transactions.
• Different Grids: Each grid can be viewed as an independent application or service (such as a game), handling its specific transactions and state changes.
• User: Trade with Hypergrid, which is responsible for receiving and processing these transactions. The transactions are processed by Hypergrid's validator and settled and recorded through the Solana underlying layer.

The architecture of Hypergrid alone has not fully exerted its effect, and it needs to be accompanied by some auxiliary tools to make it more user-friendly.

First is the EVM interpreter, which allows existing Ethereum-based games to be deployed on Hypergrid with minimal modifications; at the same time, Hypergrid has also developed a native game engine called trap, which covers game runtime loops, game-specific types and containers, sandbox environments, etc., dropping various barriers to game integration, development, and debugging.

And in the final stage of interacting with assets, Hypergrid also provides a complete set of payment and settlement infrastructure, such as embedded Non-fungible Token market, token swap, bridging and liquidity pools, identity verification, and wallets.

Therefore, with the addition of the above tools, Hypergrid can enable developers to quickly build a customized Rollup specific to their game, without having to reinvent the wheel from scratch. They can utilize existing architecture and toolkits to handle all aspects of Web3 game development end-to-end.

At the same time, the benefits to developers will ultimately spill over to all stakeholders around Solana.

Players can get a better trading and gaming experience with encryption, but they may not perceive any changes technically, just subjectively feel that the transaction speed has become faster. For the entire Solana ecosystem, applications' customized Rollups can also alleviate the pressure on the main network's performance, thus making project parties willing to introduce more Solana games. Each game will bring users and liquidity to in-game assets, which will also penetrate the underlying layer of Solana.

It is worth mentioning that, as an L2, Hypergrid also adopts a staking design. Validators in the network need to stake SOL to become nodes, which indirectly increases the value capture effect of SOL.

In the end, Sonic's Hypergrid design greatly improves the scalability and performance of the system, while ensuring the consistency and security of data; making it a reasonable choice for all parties in the Solana ecosystem to participate in and have motivation to participate in. I believe it is a longer-term and reasonable choice.

Focus Beyond Technology

As an L2 infrastructure project that can benefit longer, technology is certainly important, but more crucial is how many partners can play together and to what extent they can expand their business circles.

Therefore, resources, collaboration capabilities, community building, and market entry strategies behind Sonic are more important.

In June of this year, Sonic announced the Bitkraft Led the Series A financing round, raising $12 million, with participation from Galaxy Interactive, Big Brain Holdings, and others.

The developer behind Sonic---Mirror World has even stronger capabilities. As early as 22 years ago, it received a $4 million seed round of financing, with CEXs such as OKX and Bybit participating in the investment. With the token TGE of Sonic, the expectation of listing has been further increased on the basis of the previous.

On the other hand, Sonic and Mirror World also have close ties to Solana.

Public information shows that the growth team, game team, and ecological technology leader in the Asia-Pacific region of Solana are all consultants and angel investors of the Sonic project, which undoubtedly adds legitimacy to the project.

More official organizational contacts also mean a wider network and resources, making it easier to collaborate within Solana's ecosystem and pave the way for project development.

In terms of the specific presentation of cooperation, the application development platform SDK of Mirror World has been deployed to 50 game clients as initial distribution nodes, and has established good cooperative relationships with existing games, making it easier to migrate existing games to Sonic and complete the ecological cold start of Sonic;

Currently, more than 10 on-chain games have been successfully deployed on Sonic's testnet. These include the first on-chain casino Zeebit in the Solana ecosystem and the top shooting game Lowlife Forms, invested by Solana official, Lowlife Forms.

At the same time, the Sonic testnet has begun to take shape.

According to the official data panel, the number of active wallets on Sonic has exceeded 2 million. With the official launch of Sonic's mainnet in September, we may expect more games to be introduced. If a phenomenal game is released, this data is likely to only increase.

But everyone knows that the Web3 games are actually not attracting outsiders, but how to activate internal users, inject initial traffic and attention is more critical.

I have always emphasized that for an infrastructure project, the ability to organize and mobilize resources directly determines the project's lower limit. In this respect, Sonic's advantage is very obvious, and its key cooperative advantage is the ability to establish good cooperation with other non-gaming projects, providing liquidity, traffic, and security support for this chain.

For example, Backpack, OKX wallet, Metaplex, Solayer (over 25 million SOL staked in it), Jito and other exchanges, Decentralized Finance, and LST projects have become partners of Sonic, working together to inject vitality into this L2.

In addition to partnering connections, Sonic has been continuously enhancing its influence in the community recently to strengthen brand awareness.

As a global L2, Sonic has now recruited ambassadors in various countries and held community meetups in Web3 emerging markets such as Turkey and Nigeria to strengthen the project's position in the minds of users and developers.

At the same time, from the recent actions, Sonic has also accelerated the frequency of exposure. Sonic has a common presence in important events such as Solana's hacker house and breakpoint in its ecosystem; and whether it is the Chinese community or the global community of Solana, Sonic is also actively conducting guest sharing.

In these small actions, we finally see Sonic as a project with multi-VC investment, official support from Solana, global user reach and good activity, and strong resource connection ability, as well as a preliminary scale of ecological development.

What's more important is Sonic's narrative priority (the first L2 for games on Solana), which is why you should pay attention to Sonic.

Current opportunities to participate: HyperFuse Guardian Node Non-fungible Token Sale

Currently, Sonic's token $SONIC plans to conduct TGE in October. Although it is currently not possible to directly participate in the token, we can learn about its economic model and utility in advance and participate in the upcoming node presale activities.

First, the SONIC token is aimed at three types of roles, namely token holder, construction contributor, and user and community.

• Token holder: $Sonic can be exchanged for $veSonic at a 1:1 ratio, which can be used to participate in ecosystem governance voting or delegated to different validators to earn additional rewards.
• Builders and contributors: Builders and contributors can participate in the Sonic Partner Innovation Network (SPIN) and the Sonic Acceleration Program to receive ecosystem support and jointly build the development of high-quality games, infrastructure tools, or other parts supporting the ecosystem.
• Users and Community: Participate in interactive experiences in the ecosystem projects. Through Sonic's activities, users can earn points rewards, which can be redeemed for tokens or other ecosystem rewards.

So, what spaces are currently available for users to participate in to have the chance to receive token rewards?

On September 16th, Sonic will launch a sale event called HyerFuse Guardian Node (visit here). The target of this sale is 50,000 Non-fungible Tokens representing the right to operate nodes in Sonic's HyperGrid network.

Each Non-fungible Token represents the operating right of a Guardian Node, and Non-fungible Tokens of different levels correspond to different node weights and reward ratios.

First of all, it needs to be clarified, what does running this HyperFuse Guardian node do?

In HyperGrid, Guardian nodes are an important part of maintaining the normal operation of the network. The main responsibilities of these nodes include monitoring network transactions and state transitions, detecting abnormal situations; at the same time, verifying whether the state submitted by the HyperGrid Shared State Network (HSSN) to Solana is correct, and ensuring that all operations in Grids rollup comply with security standards.

You can understand it in layman's terms as the role of a 'verification node'.

It is worth noting that even if users do not have the technical capability to run nodes, they can still purchase Non-fungible Tokens and delegate them to other operators to participate in the network and receive rewards.

At the same time, the threshold for running nodes is also very low, with a minimum of only one browser required to run nodes in a lightweight manner.

Therefore, participating in the operation of HyperFuse Guardian Node not only helps maintain network security, but also brings potential economic returns.

Token Rewards: The project has allocated 10% of the tokens for rewards, with 9% allocated for node operation rewards and 1% for network expansion rewards, such as referrals and invitations (unlocking rules for different rewards are as follows).

In specific rules, Sonic has divided the presale of this node's Non-fungible Token into three phases:

• Lottery Phase: September 16, 2024, 13:00 UTC (lasts for 24 hours)
• Whitelist Sale: September 18, 2024, 13:00 UTC (lasts for 24 hours)
• Public Sale: Starts at 13:00 UTC on September 19, 2024

Different nodes adopt a dynamic pricing mechanism, with prices ranging from $155 to $554. It supports purchasing on the Solana network using SOL, USDT, or USDC. Different levels of Non-fungible Tokens have different purchase limits to ensure broader community participation.

It is worth mentioning that the initial price of the NFT sale for this node is relatively low, starting at $155, which is not considered expensive, and 70% of the nodes are priced below $300.

In terms of classification, the sale of 1st level nodes (the cheapest) adopts the Fair Launch mode, which is relatively fair for most players. It is bound to have the highest attractiveness in the case of low price. Interested players can prepare in advance and participate on the 16th.

In addition, levels 2 to 8 nodes are only sold to white list holders, with prices ranging from $166 to $248. White list holders can obtain them through the odyssey activity on the test network and the cooperative community.

The currently known cooperative communities include MadLads, Solayer, Send, MonkeDAO, and other well-known communities in the Solana ecosystem, as well as the broader crypto community.

Players who are interested in specific rules can check here for more details.

From the perspective of valuation, the node presale is good news for the community and retail investors, as some of these nodes offer lower costs than VC financing.

In the first 30% node sale, the fully diluted valuation (FDV) is maintained below $100 million, lower than the valuation of the previous VC round. This means that early participants have the opportunity to enter the project at a relatively favorable price and gain potential appreciation.

It can be seen that the nodes also adopt a layered pricing strategy. Early participants were able to obtain nodes at a lower price, while as the sales process progressed, the node price gradually increased. This not only rewards early supporters, but also provides investment opportunities for investors with different budgets, which is conducive to expanding the community base.

Conclusion

Solana's Game Summer has not arrived yet, but the pioneers who are driving its arrival are definitely worth paying attention to.

Sonic's strong resource connectivity, professionally targeted products, and event development have provided new destinations for existing liquidity and attention; whether it's professional gamers, ordinary players, or game projects, new, user-friendly, and promising projects will become the market's favorites.

But how long can be spoiled, also depends on Sonic's own good operation and subsequent development --- the stream not only competes, but also competes incessantly, iterating in the ever-changing market expectations and demands, which is the survival philosophy for Web3 projects to go further.

Statement:

1. This article is reproduced from DeepTechFlow, with the original title 'Interpreting Sonic: The First L2 on Solana Built for Gaming, Leading the 'One-Click to Chain' Gaming Feast', the copyright belongs to the original author [Deep TechFlow]. If you have any objections to the reprint, please contact the Gate Learn Team, and the team will handle it as soon as possible according to the relevant process.
2. Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
3. The article's other language versions are translated by the Gate Learn team. Without mentioning Gate.io, the translated articles may not be copied, distributed, or plagiarized.

Gate Research Institute Weekly Report, BTC has risen this week, reaching a high of $64,812 and then falling back, following the resistance level of $64,800. This week, BTC ETF saw a net inflow of $352 million, while ETH ETF saw a net outflow of $69.76 million. The overall market capitalization of Stable Coins has risen by 0.65%, with further inflows of off-exchange incremental funds. Hamster Kombat has announced its roadmap: it plans to launch a dedicated advertising network, with the revenue used for token buybacks. PayPal will allow U.S. business customers to buy, hold, and sell cryptocurrency. Base Network's TVL has surpassed $1.9 billion, reaching a new all-time high. Truflation suffered a hacker attack, resulting in a loss of approximately $5 million.

Market Interpretation

Market Review

• BTC ⸺ Over the past 7 days, BTC has been on a rising trend, increasing from around $60,000 to the current $63,660. After reaching a high of 64,812 in the short term, there was a slight pullback, but the market has not broken the rising trend. In the short term, it is necessary to follow the breakthrough situation of the resistance level of $64,800. If successful, BTC may continue to rise; otherwise, it may consolidate in the range of $63,000 to $64,500.
• 
• ETH ⸺ In the past 7 days, ETH has experienced a round of pump, rising from $2,296 to a high of $2,703 on September 23. During this period, the long positions on the moving averages were arranged, the volume was active, and the market's bullish sentiment rose. After reaching the interim high point of $2,700, the price began to pull back and is currently oscillating and consolidating in the range of $2,600 to $2,700, with the trading volume decreasing and the short-term market activity weakening.
• 
• AltCoin ⸺ In the past 7 days, the total market capitalization and trading volume of AltCoin have both seen a pump. As of now, the total market capitalization is 1.07 trillion US dollars, and the cryptocurrency market is recovering due to the impact of interest rate cuts. Among them, zones such as Cat-Themed, Artificial Intelligence, and Data Availability have shown significant increases.
• Macroeconomic Data ⸺ On September 19th, the Federal Reserve announced a cut in the Federal Fund Interest Rate to 5%, the first rate cut since March 2020. At the same time, according to CME's 'FedWatch' data, the probability of a 25 basis point rate cut by the Fed in November is 38.9%, while the probability of a 50 basis point rate cut is 61.1%.
• Stable Coin ⸺ Over the past seven days, Stable CoinMarket Caprise has increased by 0.65% to $172.3 billion. USDT continues to dominate, with a market share of 69.23%. Compared to last week, USDT Market Cap has risen slightly by 0.25%, and USDC Market Cap has increased by 1.24%. Overall, the Stable Coin market has remained stable and pumped after the interest rate cut this week.
• Gas Fee ⸺ Recently, the overall activity on the Ethereum blockchain has shown signs of recovery. The gas price has mostly been in double digits over the past week, with a peak of 37.7 on September 24th and a minimum of 5 at other times.

Since 2020, PayPal has been offering consumers the ability to directly buy, hold, and sell cryptocurrencies. Last year, PayPal launched the PayPal USD (PYUSD), a stablecoin pegged to the US dollar, with a market capitalization of $700 million as of September 26. With 400 million active users, PayPal's move could expand its market share and play a significant role in promoting the adoption of cryptocurrencies.

The TVL of the Base network's Decentralized Finance has exceeded $1.9 billion, reaching a new historical high According to DefiLlama data, the TVL of Base network surpassed $2 billion on September 26, reaching $2.03 billion, a new historical high. Base ranks second in TVL among Layer 2 networks on Ethereum, second only to Arbitrum, and surpassing Optimism. Currently, the top three protocols in terms of TVL on this network are DEX protocol Aerodrome, Uniswap, and Extra Finance.

The rapid rise of TVL is attributed to the prosperity of its Decentralized Finance ecosystem. The Base network has attracted many Decentralized Finance protocols to join due to its rapidly rising user base and trading volume. Major participants in the Decentralized Finance projects include Uniswap, Aerodrome, Morpho Labs, Radiant Capital, etc. In addition, Base has obtained governance approval from Optimism and will receive a grant of 3 million OP Tokens (equivalent to approximately 5 million USD) to incentivize Decentralized Finance developers to increase the Total Value Locked (TVL) of ETH and BTC on Base.

Since 2020, PayPal has been offering consumers the ability to directly buy, hold, and sell cryptocurrencies. Last year, PayPal launched the PayPal USD (PYUSD), a stablecoin pegged to the US dollar, with a market capitalization of $700 million as of September 26. With 400 million active users, PayPal's move could expand its market share and play a significant role in promoting the adoption of cryptocurrencies.

The TVL of the Base network's Decentralized Finance has exceeded $1.9 billion, reaching a new historical high According to DefiLlama data, the TVL of the Base network exceeded 2 billion USD on September 26, reaching 20.03 billion USD, a historical high. Base ranks second in TVL on the Layer 2 network of ETH, second only to Arbitrum, and surpasses Optimism. Currently, the top three protocols in terms of TVL on the network are DEX protocol Aerodrome, Uniswap, and Extra Finance. [14]

The rapid rise of TVL is attributed to the prosperity of its Decentralized Finance ecosystem. The Base network has attracted many Decentralized Finance protocols to join due to its rapidly rising user base and trading volume. Major participants in the Decentralized Finance projects include Uniswap, Aerodrome, Morpho Labs, Radiant Capital, etc. In addition, Base has obtained governance approval from Optimism and will receive a grant of 3 million OP Tokens (equivalent to approximately 5 million USD) to incentivize Decentralized Finance developers to increase the Total Value Locked (TVL) of ETH and BTC on Base.

Popular Concepts

According to the data from gate and Coingecko, Cat-Themed, Artificial Intelligence, and Data Availability zones saw significant pumps this week, with increases of approximately 33.3%, 33.2%, and 30.8% respectively over the past seven days. The popular concepts are as follows: [7]

Cat-Themed —— The 7-day increase is about 33.3%, with a circulating market capitalization of about 32.56 billion US dollars.

The Cat-Themed project mainly revolves around the meme coin with a cat theme, attracting many cat lovers or speculators to follow. As the popularity of cat culture continues to expand, it is driving market heat rise. POPCAT, MEW, and MOG have pumped 43.7%, 41.6%, and 35.7% respectively in the past week, showing strong rising potential. However, meme coin's volatility is high, and investors need to be cautious about related risks when investing.

Artificial Intelligence - The price has increased by about 33.2% in the past 7 days, with a circulating market capitalization of approximately 30.84 billion US dollars.

The Artificial Intelligence zone is committed to combining artificial intelligence with blockchain technology, aiming to provide automation services for decentralized applications. With the popularity of AI applications, this field has gradually become an investment hotspot. Especially FET, ICP, and NEAR have pumped 26.5%, 18.3%, and 18.1% respectively in the past week, reflecting the strong interest of the market in AI projects.

Data Availability —— In the past 7 days, the increase is about 18.1%, and the circulating market cap is about 79 billion US dollars.

Ensure that Block participants can verify the transaction data of the Block to guarantee Decentralization and the scalability of the network. The pump in this area may be driven by the rise in demand for Block scalability and Decentralization. As the scale of the Block network expands, ensuring data availability has become an important issue to ensure the security and scalability of the Block. Recently, more and more projects have focused on optimizing the on-chain data availability of the Block, attracting more market funds and technological follow, especially CXT, NEAR, and KEX, which have risen by 23.0%, 18.1%, and 17.8% respectively in the past week.

Hot Currencies

According to gate data, among the projects with large gains and large market capitalization, the following hot currencies in the past 7 days are:

TAO - Up about 64.4% in the past 7 days, with a circulating market capitalization of $3.97 billion.

Bittensor is a decentralized machine learning network that enables models to collaborate and train, and rewards TAO based on the value of information through blockchain technology. Its goal is to build an open market for artificial intelligence, promote open access and global computing power.

Recently, AI Depin's narrative has been hot, and Grayscale has also mentioned Bittensor, which may have driven the pump in Token prices.

SEI —— The price has increased by about 33.0% in the past 7 days, with a circulating market capitalization of $1.63 billion.

SEI is a high-performance Layer 1 public chain designed for Decentralized Finance (DeFi) applications, aiming to provide fast and secure transaction experience. Recently, SEI has attracted multiple DeFi projects' attention by optimizing Smart Contracts and reducing transaction fees.

Over the past seven days, SEI on-chain TVL has pumped about 26%, reaching $195 million, with increased on-chain activity being an important factor driving its Token price pump.

SUI - The price has increased by approximately 24.7% in the past 7 days, with a circulating market capitalization of 4.73 billion USD.

SUI is an innovative Layer 1 centered around objects and using the Move programming language, designed specifically to address inefficiencies in current blockchain frameworks.

SUI's TVL has risen by 110% in the past month, surpassing $714 million. The increase in user activity on the SUI network has led to a higher demand for SUI Token, which may drive up the token price. The Mysticeti upgrade has significantly improved the network's transaction efficiency, and the Grayscale SUI Trust Fund launched by Grayscale has also provided support for SUI's market performance.

This week's focus

Hot Spot Review

Hamster Kombat Announces Roadmap: Planned Launch of Dedicated Advertising Network, Revenue Used for Token Buyback On September 25th, Telegram's click game Hamster Kombat released its development plan for the end of 2024 and 2025. The main focus is on launching a Web3 game platform to expand its game products. According to the latest roadmap, the key goals for 2024 include integrating external payment systems, launching new games, and integrating Non-fungible Tokens as in-game assets. Previously, on September 23rd, the Hamster team announced the Airdrop distribution. Among the current 300 million users, approximately 131 million users are eligible for the Airdrop.

In addition, Hamster Kombat plans to launch a dedicated advertising network for games in its ecosystem. This initiative is expected to be released in December 2024, and the revenue generated by the advertising network will be used to repurchase Tokens and distribute them as rewards to community members. This strategy not only helps to enhance user engagement but also helps to increase the value of Tokens.

According to the development plan of Hamster Kombat, integrating external payment systems will significantly increase the Liquidity and drop participation threshold in the game, thereby expanding the user base. In addition, the launch of new games is expected to further consolidate Hamster's position in the Telegram platform and the entire Tap-To-Earn game field, while solving the challenges faced by traditional clicker games, such as short lifecycle and player churn.

PayPal will allow US business customers to buy, hold, and sell Crypto Assets On September 26, PayPal will allow its US business customers to directly purchase, hold, and sell Cryptocurrency through their account. Jose Fernandez da Ponte, Senior Vice President of Blockchain, Cryptocurrency, and Digital Money at PayPal, said, 'Businesses are increasingly looking for the same Cryptocurrency features as individual consumers.' In addition, PayPal also plans to allow US merchants to transfer Cryptocurrency on-chain to 'eligible' third-party Wallets. However, this service will not be available to businesses in New York in the initial stage.

Since 2020, PayPal has been offering consumers the ability to directly buy, hold, and sell cryptocurrencies. Last year, PayPal launched the PayPal USD (PYUSD), a stablecoin pegged to the US dollar, with a market capitalization of $700 million as of September 26. With 400 million active users, PayPal's move could expand its market share and play a significant role in promoting the adoption of cryptocurrencies.

The TVL of the Base network's Decentralized Finance has exceeded $1.9 billion, reaching a new historical high According to DefiLlama data, the TVL of Base network surpassed $2 billion on September 26, reaching $2.03 billion, a new historical high. Base ranks second in TVL among Layer 2 networks on Ethereum, second only to Arbitrum, and surpassing Optimism. Currently, the top three protocols in terms of TVL on this network are DEX protocol Aerodrome, Uniswap, and Extra Finance.

The rapid rise of TVL is attributed to the prosperity of its Decentralized Finance ecosystem. The Base network has attracted many Decentralized Finance protocols to join due to its rapidly rising user base and trading volume. Major participants in the Decentralized Finance projects include Uniswap, Aerodrome, Morpho Labs, Radiant Capital, etc. In addition, Base has obtained governance approval from Optimism and will receive a grant of 3 million OP Tokens (equivalent to approximately 5 million USD) to incentivize Decentralized Finance developers to increase the Total Value Locked (TVL) of ETH and BTC on Base.

Solana Breakpoint 2024 conference ends, many projects announce important progress and plans At the Solana Breakpoint 2024 conference from September 20th to 21st, many project parties announced important developments and plans, further promoting the development of the Solana ecosystem. In terms of infrastructure, the Firedancer project announced its next-generation validators architecture, aimed at improving the performance and processing power of the Solana network, especially effectively dropping latency under high loads, and improving the overall user experience. Jupiter Exchange launched a new Liquidity aggregation tool, which can intelligently integrate Liquidity from multiple Decentralization exchanges to help users obtain the best trading prices and lower Slippage, significantly improving the efficiency of cross-platform transactions and optimizing users' trading experience.

In the PayFi field, Sanctum has introduced its latest development of "Creator Coins", allowing creators to create their own Token with a threshold of 1 SOL, simplifying interaction between creators and supporters. This tokenization allows creators to directly receive financial support from supporters and conduct more efficient marketing. Fuse wallet collaborates with Bridge and Squads Protocol to launch virtual Visa cards, allowing users to directly use Stable Coin for payment on Solana through their Fuse Wallet, enhancing the application of Stable Coin in daily transactions.

In the field of Decentralized Finance (DeFi), deBridge Finance has announced the optimization of its Cross-Chain Interaction transfer protocol, allowing users to seamlessly transfer assets between different blockchains, reducing the cost of Cross-Chain Interaction transactions and improving transaction efficiency. Squads Protocol has released its new multi-signature Wallet feature, enabling teams and projects to manage funds more securely. This multi-signature mechanism ensures the transparency and security of funds, enhancing user trust in DeFi projects. Tensor has showcased its solution for Non-fungible Tokens (NFTs) and data sharing, promoting the Liquidity of on-chain assets and enabling users to trade and leverage their digital assets more conveniently.

Security Incident

Truflation suffers Hacker attack, losing approximately $5 million On September 26th, the encryption project Truflation was attacked by hackers, and the treasury multi-signature wallet and personal wallet were stolen for about $5 million. Truflation is an on-chain Oracle Machine that mainly aggregates real-time on-chain data through its DRPp protocol, providing accurate and accessible data indices for various financial markets and tools in the Web3 industry.

The recent Hacker attacks targeted the multi-signature Wallets of vaults across multiple chains and users' personal Wallets, mainly using malware for the attacks. Currently, Truflation is closely monitoring the situation and taking swift measures to protect user assets and stake funds. Truflation also added that staking operations are currently unavailable, and the Liquidity of the Decentralization exchange is also limited. The team will continue to provide users with the latest information and reward any white hat Hackers who provide assistance. As a result of this news, the TRUF Token has dropped by 10.43% in the past 24 hours.

Project follow

Hemi Network ranks first in Rootdata's popularity ranking After announcing financing and launching the incentive test network, Hemi Network's popularity index on platforms such as Rootdata remains high. Hemi is a second-layer blockchain network built on BTC and ETH, introducing the Hemi Virtual Machine (hVM) that allows developers to create Smart Contracts interacting with the BTC state. As a single blockchain, Hemi Network serves as a second-layer solution for both BTC and ETH, aiming to combine the strengths of the two networks, integrating the security of BTC with the liquidity and programmability of ETH.

On September 18th, Hemi Labs announced the completion of a $15 million financing. Hemi Labs will use this funding to develop and launch Hemi Network. The Hemi Network incentive testnet is now live, and the company plans to launch the Mainnet in the fourth quarter. Investors can follow Hemi Network closely for updates on Airdrops, Mainnet launches, and other information.

Neiro announces partnership with DWF Labs On September 24th, Neiro officially announced a partnership with DWF Labs, and the two will work together to make Neiro one of the most successful Meme coin projects in the cryptocurrency field. The total supply of Neiro Tokens is 420.69 billion, and it is completely fair issuance. Currently, Neiro's total Market Cap is $4.93 billion, and the addition of DWF Labs is expected to further drive the project's development. Neiro is a Meme Token project based on the Ethereum and Solana blockchains, inspired by the new pet 'Neiro' of Kabosu, the owner of the Doge prototype. Neiro Token quickly attracted a large amount of funds, with a significant increase in volume and price pump. After the team's departure, the project was community-led, and token management and operations were taken over by the community. The community has shown a high level of enthusiasm for Neiro, with a rapid rise in the number of social media followers, demonstrating a strong community base and influence.

The price of Neiro Token has experienced significant Fluctuation in a short period of time, reflecting the high risk and volatility of the Cryptocurrency market, especially Meme coin. Investors should exercise caution and fully understand the related risks when considering investing in such Tokens.

Aave community proposed to temporarily drop WBTC risk Aave community member LlamaRisk has proposed a motion suggesting more stringent restrictions on the use of Wrapped Bitcoin (wBTC) on the platform to drop potential risks. The proposal suggests dropping the loan-to-value ratio (LTV) of wBTC in all V3 versions to 0, meaning users will no longer be able to use wBTC as Collateral to borrow more funds. At the same time, the proposal also suggests dropping the supply and borrowing limits to 5-10% above the current utilization rate to limit additional risks of wBTC, while retaining flexibility for users to adjust their positions.

This proposal has sparked controversy within the community. Marc Zeller, the founder of the Aave Chan Initiative (ACI), and some community representatives oppose the proposal, believing that a more cautious and balanced approach should be taken in response to the current uncertainty. Aave co-founder Stani Kulechov also made it clear that this proposal does not mean that Aave will completely phase out WBTC, but rather it is due to considerations of Risk Management.

Some members of the community pointed out that concerns about wBTC were exaggerated, as wBTC has been running well for a long time and is an important part of the Aave community. These members believe that the relevant parties should be given due respect, and that the treatment of wBTC custodians in other communities is unfair.

Earlier, digital asset custody company BitGo announced that it would transfer the control of its wBTC product to a joint venture with Hong Kong-based BiT Global. As the details of the joint venture, the specifics of the transfer, and the audit information of the related companies were not disclosed in this transaction, the transparency and centralization of wBTC's subsequent permission management were questioned by the public.

Highlight Data

US ETF Spot Market Data From 21 September to 24 September at 4:00 (UTC+0), the total net asset value of the BTC ETF was $58.6 billion, accounting for 4.62% of the BTC Market Cap, with a cumulative net inflow of $17.83 billion. The BTC ETF market showed a net inflow this week, with a $136 million inflow on 24 September. The Fed's interest rate cut strategy stimulated the Cryptocurrency and US stock market rebound, resulting in increased inflow for the BTC ETF.

From 21st September to 24th September at 4:00 (UTC+0), the net asset value of the Ethereum ETF was $7.20 billion, accounting for 2.26% of the total market capitalization of Ethereum. The cumulative net outflow was $634 million. On 24th September, there was a net inflow of approximately $62.51 million, the largest inflow since 7th August.

Stable CoinMarket Cap changes According to DefiLlama data, as of 0:00 on September 26th (UTC+0), in the past seven days, the Stable CoinMarket Cap rose by 0.65% to $172.3 billion, reaching a new high since May 2022. USDT continues to dominate with a market share of 69.19%. Compared to last week, USDT Market Cap rose slightly by 0.25%, and USDC Market Cap increased by 1.24%. Overall, the top three Stable Coins by Market Cap are USDT, USDC, DAI, all of which saw a rise in Market Cap.

Ethereum GAS Fee rebounded and then fell Gas fees on the Ethereum network showed a significant rise trend from September 18th to 24th, and fell after the 25th. Due to the rise in on-chain cryptocurrency trading activity, a total of 12,807 ETH were burned this week, with an annualized inflation rate of 0.24%. Among them, Uniswap burned 1,641.42 ETH in the past 7 days, and ETH transfer burned 856 ETH.

funding rate Over the past week, the funding rate for BTC and ETH has remained positive, reflecting a bullish sentiment and dominance of long positions in the market. Both tokens have shown significant fluctuations in price movement, and the frequent changes in the funding rate may reflect the high level of leverage trading activity, especially during multiple periods of intense competition between long and short positions. However, the price has not fully aligned with the fluctuation of the funding rate, especially during sideways price fluctuations, where the drastic changes in the funding rate indicate the fluctuating sentiment of market participants and the uncertainty about future price action.

Market Opportunities

Project Airdrop

The Airdrop project that can be followed this week is: BOB BOB is a BTC EVM rollup network, which recently launched its third season points activity, also the final season of the project. BOB aims to combine the security of BTC and the flexibility of ETH's Smart Contracts, supporting the BTC ecosystem including Ordinals, Lightning, and Nostr to enhance the practicality and expand the functionality of BTC. BOB allows BTC miners to support the BOB network at no additional cost through merged mining technology, enhancing the security of the network. BOB also secured a $10 million seed round of financing led by Castle Island Ventures, with investors including Mechanism Ventures, Bankless Ventures, CMS Ventures, and UTXO Management.

How to participate:

• stake: BTC
• Voting: The newly added community voting feature allows users to vote for their favorite projects, and the winning project will receive additional rewards.
• Invitations: The referral program offers direct invitations with a 15% Spice reward and second-level invitations with a 7% reward.
• Complete tasks: Participate in specific tasks and activities in the BOB ecosystem to earn Spice.

Participate in the early bird event and the Spice obtained before the Decentralized Finance TVL of BOB reaches 75 million USD will be doubled. Multiple BOB ecological projects have also launched point plans, and users can simultaneously obtain multiple rewards.

Tip: Airdrop plans and participation methods may be updated at any time. It is recommended that users follow BOB's official channels to get the latest information. At the same time, users should participate cautiously, pay attention to risks, and conduct sufficient research before participating. gate does not guarantee the subsequent Airdrop rewards.

Financing Weekly Report

Several projects successfully completed financing this week, involving a wide range of applications in public chains, gaming, AI, and other fields. According to RootData statistics, from September 20th to September 26th, a total of 10 projects announced financing, totaling $140 million. Here are the top three financing amounts:

Celestia - On September 23, modular blockchain network service provider Celestia announced the completion of a $100 million Series B financing round led by Bain Capital Crypto, with participation from Syncracy Capital, 1kx, Robot Ventures, Placeholder, and others. Celestia's total funding has reached $155 million. Celestia provides the industry's first dedicated modular Consensus and data network, allowing developers to deploy Rollup chains.

On September 25th, Block chain project Initia announced the completion of a $14 million Series A funding round with a valuation of $350 million. The round was led by Theory Ventures, with participation from Delphi Ventures and Hack VC, among others. Initia is a network designed for interwoven optimistic rollups, aimed at completely restructuring the operation of multi-chain systems, integrating first-layer Block chains and second-layer infrastructure to create a tightly connected modular network ecosystem, with the goal of building multi-chain systems. Its Mainnet and Token are expected to go live in the next two months.

Smolbound - On September 23, blockchain game developer Darkbright Studios announced the completion of a $6 million seed round of financing, led by Bitkraft Ventures, with participation from Treasure, Play Ventures, Anthos Capital, King River Capital, and others. The company's first work is the life simulation game Smolbound, which seamlessly integrates Web3 technology and is planned to be launched in 2025.

Next week follow

Token Unlock

According to the data of Token Unlocks, there will be several important Token unlocking events in the market next week (2024.9.27-10.03). Among them, the top 3 unlocking situations before this week are as follows:

SUI - Approximately 53.96 million tokens will be unlocked at 12:00 on October 1st (UTC+0), accounting for 2.4% of the current circulation ratio, with a value of approximately $100 million. The token price may experience significant fluctuations before and after the unlocking.

OP - About 31.34 million Tokens will be unlocked at 12:00 on September 30 (UTC+0), accounting for about 2.64% of the current circulation, worth about $52.65 million;

Among them, Core Contributors unlocked 16.54 million Tokens, accounting for 52% of the Tokens unlocked this time. Investors unlocked 14.8 million Tokens, accounting for 48% of the Tokens unlocked this time.

ZETA - Approximately 53.89 million tokens will be unlocked at 12:00 on October 1st (UTC+0), accounting for 13.43% of the current circulation, with a value of approximately $36.82 million; among them, Core Contributors will unlock 26.25 million tokens, accounting for 48.7% of the tokens unlocked this time.

encryption calendar

In the coming week (2024.9.27-10.03), the Blockchain and Crypto Assets industry will witness several key events. On September 27th, Layer 1 Blockchain Vega Protocol, which focuses on derivatives trading, decided to phase out the Vega Blockchain and its VEGA Token. The Vega chain will stop running as early as today. CME Group plans to launch Bitcoin Friday Futures (BFF) on September 30th, with each contract representing 1/50 of a bitcoin, making trading more efficient.

The release of some important macro-level data also has a significant impact on the industry. It is worth noting that on October 1st, Federal Reserve Chairman Powell delivered a speech at the National Business Economic Association. This speech covers key areas such as economic rise, inflation, and the job market, which are important foundations for understanding the future direction of monetary policy.

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The two major challenges in the blockchain field are Cross-Chain Interaction/Interoperability and Liquidity fragmentation. Different blockchains often act independently, preventing assets and data from flowing freely. Holograph protocol (HLG) solves these problems by providing a comprehensive tokenization solution. It ensures that tokens can be freely transferred and used across different blockchains without losing their original value and functionality.

Cross-Chain InteractionInteroperability is crucial for the development of the Block ecosystem. It enables communication and interaction between various networks, creating a more closely interconnected Block chain environment. The solution provided by Holograph protocol is undoubtedly a major breakthrough in the industry, leading Block chain towards a more unified and efficient direction.

What is Holograph protocol?

Holographprotocol (HLG) is a blockchain tokenization protocol designed to achieve seamless interoperability between different blockchains. Through this protocol, tokens can be freely transferred and used on multiple on-chain blockchains without affecting their original value and functionality. Holographprotocol, co-founded by Jeff Gluck and Jeremy Kerbel, focuses on solving the problems of cross-chain interaction interoperability and decentralized liquidity, helping assets and data flow easily in multiple blockchain ecosystems.

Key Features and Advantages:

• Full Interoperability: Holographprotocol supports multiple blockchains, including Ethereum, Polygon, and Optimism, ensuring smooth and unimpeded Token movement across major networks. Users can transfer assets across chains without any compatibility concerns.
• Smooth transfer: Through the Holograph transfer process (HTP), tokens can be smoothly transferred between different block chains, while always retaining their original attributes and values.
• LayerZero Integration: With the infrastructure of LayerZero, Holographprotocol has significantly improved the Cross-Chain InteractionInteroperability and security, ensuring that the Token transfer process is both efficient and secure.
• Developer-friendly tools: Holograph protocol provides development tools such as Holograph applications, SDKs, and command-line interfaces to help developers develop and deploy applications on the protocol more easily.

Application Scenarios of Holograph Protocol

• Decentralized Finance: Holographprotocol provides a seamless solution for asset transfer and liquidity supply between Decentralized Finance platforms, helping to build a more efficient and interconnected Decentralized Finance ecosystem.
• Game: Holographprotocol supports Cross-Chain Interaction using in-game assets, allowing players to freely transfer assets between different Blockchains games, greatly enhancing the interactivity and experience of the game.
• Non-fungible Tokens (NFTs): Holographprotocol allows for the creation and transfer of NFTs across multiple blockchains, which is a valuable feature for artists and content creators looking to expand their reach.
• Supply Chain Management: Through Holograph protocol, data can flow across blockchains, thereby enhancing the transparency and traceability of the Supply Chain, which helps improve Supply Chain management and ensure the authenticity of products.

Overview of Holograph Protocol

Ecosystem Structure

As a tokenization layer in the entire chain ecosystem, Holographprotocol promotes the interoperability of Liquidity between various blockchains. This ensures that assets can flow smoothly between different blockchain environments, thereby improving overall efficiency and network connectivity.

Protocol Architecture

Holograph protocol relies on ten core elements, which form the basis of the protocol's basic functions. They ensure the stable and efficient operation of the system on each on-chain Block.

Full Chain Function

Holographprotocol provides asset issuers with a comprehensive solution, supporting customized full-chain Token creation, deployment, and transfer, including:

• Standard Token: Supports both fungible and non-fungible tokens. The tokens will be destroyed on the source on-chain and then re-minted on the target on-chain to achieve Cross-Chain Interaction transfer.
• Custom Token: Allows the creation of Tokens that can interact with multiple blockchain execution environments.
• Existing Tokens: By locking the existing Tokens on the source on-chain and minting the full-chain Tokens on the target on-chain, the existing Tokens also have full-chain functionality.

Contract Deployment Architecture

The Holograph protocol ensures the consistency of the contract Address and Token ID used on all Blocks on-chain, making it the unique identifier for Tokens. It also supports secure Cross-Chain Interaction for asset transfers, ensuring the integrity and value of Tokens are not affected.

Token Transfer Architecture

The Token transfer mechanism of Holograph protocol ensures the smooth progress of Cross-Chain Interaction by destroying Tokens on the source on-chain, transferring information to the target chain, and re-minting an equal amount of Tokens on the target on-chain. This mechanism unifies Liquidity, avoids price Fluctuation issues, and maintains the fungibility of Tokens.

The operation mechanism of Holographprotocol

Holograph Transmission Process (HTP)

Holograph Transmission Process (HTP) is the core mechanism to ensure seamless transfer of Tokens between different Blockchains. Its operation is as follows:

1. Initiation: Users submit bridge requests on HolographBridge, triggering Token burning on the source chain.

2. Message packaging: HolographOperator encapsulates the bridge request into a message and passes it to the LayerZeroModule.

3. Cross-Chain Interaction messaging: LayerZeroModule will forward the message to the Decentralization Verification Network (DVN) of LayerZero for verification.

4. Target chain execution: After verification, the message will be transmitted to the target chain, and the corresponding Token will be minted again at the same contract Address.

Through this process, Token is able to maintain its properties and value, thus achieving unified Liquidity between different blockchains.

Integration of Holograph Protocol with LayerZero Infrastructure

The combination of Holographprotocol and LayerZero's interoperable infrastructure greatly enhances the security and efficiency of Cross-Chain InteractionToken transfers. LayerZero provides a Decentralization messaging protocol to ensure secure and reliable message transmission and verification across blockchains. With this integration, Holographprotocol can rely on the powerful network of LayerZero to achieve smoother and safer TokenCross-Chain Interaction transfers.

Holographprotocol Architecture

Core Components

1.HolographGenesis.sol HolographGenesis is deployed on all Blockon-chain that support Holograph protocol, ensuring that all core components are deployed through it. Its main operation is through the deploy function, which uses the CREATE2 opcode and a unique salt value to deterministically generate the same contract Address on any EVM compatible on-chain. This ensures that the core contracts of the protocol are deployed to the same Address on every Blockon-chain.

2.Holograph.sol Holograph is the main entry point for users and developers to interact with the protocol. It provides a universal Address on-chain for all Blocks, making it convenient for developers to use protocol functions. Holograph also maintains references to the current HolographRegistry, HolographFactory, and HolographBridge implementations, and manages the underlying protocol through a single interface, referencing all supported Block chain names and IDs.

3.HolographFactory.sol HolographFactory allows developers to submit signed deployment information for on-chain deployment of the Holograph contract, including:

• Main Deployment Chain
• Token type (such as ERC20, ERC721, ERC1155, etc.)
• Event subscription
• Custom smart contract bytecode
• Custom initialization code

Developers can also submit the same signature data to HolographFactory in order to generate the same Holograph contract if they wish to support other blockchains. The main function of HolographFactory is:

• Ensure consistent data propagation on all Blockon-chain
• Select and apply the appropriate standards
• Ensure that all deployments are completed smoothly and operate normally.
• Ensure the deployed security is highly reliable and cannot be compromised

4.HolographRegistry.sol HolographRegistry is the on-chain data center of Holographprotocol, storing all relevant data. It records the current supported standards and allows the introduction and activation of new standards. All correctly deployed Holograph contracts will be archived here as a reference to help confirm whether the Smart Contract is safe and complies with Holographprotocol requirements.

5.HolographBridge.sol HolographBridge contains the core logic for managing Cross-Chain Interaction transactions, and is the main entrance and exit for Holograph assets to enter and exit the supported Blockchains. It is responsible for verifying the validity and standards of each Cross-Chain Interaction operation, ensuring the integrity of bridge operations.

6.HolographOperator.sol The main task of HolographOperator is to interact with the Cross-Chain Interaction message protocol, and handle all Cross-Chain Interaction messages. It ensures that all submitted requests are genuine and valid, and ensures that bridge requests within the protocol can be correctly sent, received, and executed.

7. Message Module Currently, the protocol only supports LayerZero as the Cross-Chain Interaction message Relay. The protocol adopts a modular design, allowing the message Relay logic to be divided into independent modules. Holograph can extend the message functionality by adding contracts that support specific messages and fee logic to the module directory, while ensuring the security and consistency of the data.

8.LayerZeroModule.sol LayerZeroModule is the interface module between Holographprotocol and LayerZero. It provides LayerZero's functional interface for sending and receiving Cross-Chain Interaction messages, obtaining Cross-Chain Interaction fee pricing, and setting gas parameters for each supported blockchain.

Standard Execution Mechanism

Holographprotocol uses a stack structure to manage ERC standards, ensuring that contracts deployed based on this protocol strictly adhere to the standards of the corresponding Token types.

1.Holographer.sol Holographer is the core part of all Holograph contracts and is enabled whenever a Holograph contract is deployed. It integrates various components and routes incoming function calls to the corresponding contracts, ensuring security and enforcing specified standards. Holographer is isolated in a dedicated layer of the Holograph Blockchain and has been solidified into the Block chain.

2.ERC standard executor ERC standard executors ensure the Compliance and operability of the contract, such as HolographERC20 and HolographERC721. These executors internally store and manage all data, ensuring the security, Compliance, and integrity of the contract. They communicate with custom contracts through specific event hooks, while the storage and Data Layer are independently isolated and not directly accessible by custom contracts.

3.HolographRoyalties.sol HolographRoyalties is an on-chain royalty contract designed for non-fungible Tokens. It supports handling various on-chain royalty standards for Block and can be expanded to be updated with the introduction of new standards.

4.HolographInterfaces.sol HolographInterfaces is an external library contract responsible for storing and sharing standardized data. At the same time, it provides mapping of different protocol chain identifiers, making protocol or Cross-Chain Interaction communication consistent and efficient.

External Components

Holograph protocol adopts a modular and scalable design, allowing developers to easily build contracts according to the required standards, and has the Holograph feature of Cross-Chain Interaction asset transfer. Common examples include SampleERC20.sol and SampleERC721.sol.

1. Custom Contract

Custom contracts can be developed outside of the protocol, and developers can freely build projects according to their needs. The requirements for transforming custom contracts into Holograph contracts are very low, even Newbie developers can easily achieve it. Both replaceable and non-replaceable Token contracts can easily have Holograph functionality now and in the future.

Holographprotocol ecosystem

Holograph Application

The Holograph application provides an intuitive and user-friendly interface that allows users to easily interact with the Holograph protocol. Users can conveniently create, manage, and transfer Tokens on multiple Block on-chain. Even users with less technical background can easily use various functions of the protocol through this application. The app includes a Token activity monitoring dashboard, asset management tools, and Token attribute customization options, providing a smooth user experience.

Holograph Software Development Kit (SDK)

The Holograph SDK is a comprehensive development toolkit that helps developers integrate the functionality of the Holograph protocol into their applications. The SDK provides libraries, detailed documentation, and sample code, supporting multiple programming languages and platforms, to help developers easily build and deploy Decentralization applications (dApps) utilizing the full chain functionality of the Holograph protocol. This SDK greatly simplifies the development process and reduces the time and effort required to develop powerful blockchain solutions.

Holograph Command Line Tool (CLI)

Holograph Command Line Tool (CLI) is a powerful tool designed for developers who are accustomed to the command line environment. It provides a series of commands for contract deployment, Token management, and interaction with the Holograph protocol. The CLI aims to simplify the development process and help developers efficiently manage Holograph assets. With the CLI, developers can automate routine tasks, perform batch operations, and integrate the functionalities of the Holograph protocol into their development workflow.

Financing process of Holograph protocol

Holographprotocol raised a total of $11 million in three rounds of financing, which helped the team improve technology and expand operations. The financing details are as follows:

• Seed Round (April 27, 2022): Holographprotocol completed its largest financing round, raising $6.5 million, with main investors including Courtside Ventures and Wave Financial.
• Seed Round (April 30, 2024): The second round of seed financing raised $2.8 million, with Mechanism Capital and Selini Capital as the main investors.
• ICO Round (May 23, 2024): In the recent ICO funding, Holographprotocol raised $1.7 million.

Token Economics Model of Holograph Protocol

The operation of the Holograph ecosystem relies on the native Token $HLG. As a fully composable and substitutable Token, $HLG can be freely transferred between Blockchains while preserving complete data records, thus improving the efficiency and interoperability of the on-chain ecosystem. The total supply of $HLG is 10 billion, allocated to six strategic stakeholders.

• Ecosystem and Incubation: 25% (2.5 billion HLG) - Used to support the ecosystem of Holographprotocol, incentivize teams that promote cross-chain interoperability, and support the developer community.
• Core development team: 23.4% (23.4 billion HLG) - Used to reward the core contribution team responsible for security, engineering, product, infrastructure, rise, and operations.
• Strategic Network Partners: 21.18% (2.118 billion HLG) - Provide strategic investors with the opportunity to participate in the private sale to promote the long-term development of the ecosystem.
• Foundation Treasury: 15% (1.5 billion HLG) - Supporting key projects, including future full-chain tokenization research, operating expenses, and other related plans.
• Community and Launch: 10% (1 billion HLG) - Rewards for active community supporters in the Holograph ecosystem.
• Long-term Advisor: 5.42% (5.42 billion HLG) - Rewarding those who contribute to the long-term development of the ecosystem.

Is HLG worth investing?

Investing in HLG (the native token of Holographprotocol) has certain potential advantages and risks. Here are some important considerations.

Potential Advantages

• Innovative Technology: Holograph protocol solves core problems such as interoperability and decentralized liquidity in the Block chain.
• Complete ecosystem: Holograph applications, SDKs, and CLIs greatly enhance the usability of the protocol.
• Strategic cooperation: Cooperation with LayerZero and other blockchains has expanded the application scope of Holographprotocol.
• Token has a wide range of uses: HLG is mainly used for Money Laundering, participating in stake, and governance, so the demand is high.
• Governance and stake mechanism: Tokenholder can influence protocol decisions through stake and earn rewards at the same time.

Potential Risks

• Market Fluctuation: Cryptocurrency prices may experience significant Fluctuation.
• Regulatory Risk: Changes in regulatory policies may have an impact on HLG.
• Competitive Pressure: The blockchain industry is highly competitive, requiring continuous innovation to maintain competitiveness.
• Promotion and Usage: The success of the protocol relies on market acceptance and user adoption.

Although HLG has great potential for development, it also comes with risks. Detailed research and evaluation should be conducted before investing.

How to buy $HLG on gate

To purchase $HLG on gate, please follow the steps below:

• Visit the Gate.io website and create an account using your email and password.
• Deposit funds into your gate account.
• Select HLG/USDT trading pair, enter the quantity and price you want to buy, and complete the transaction

Buy $HLG

View the current price of $HLG and start trading your favorite currency pairs:

• HLG/USDT

Although BTC remains the most trusted cryptocurrency, its inherent design limitations restrict its capabilities in complex smart contracts and advanced applications. This limitation has become a major obstacle to the evolution of BTC, limiting its potential to surpass digital money. On the other hand, Ethereum provides a versatile EVM functionality, allowing the creation and execution of complex smart contracts, but lacks the security and trust accumulated by BTC over the years. This duality in the world of digital money creates a gap, urgently requiring a solution that combines the strengths of both.

This is the role of Tuna Chain. The concept of Tuna Chain is designed to fill this gap. It ambitiously aims to integrate EVM compatibility into BTC's Layer 2 framework, thereby expanding the possibilities of BTC's applications and utilities.

What is Tuna Chain?

Source: Tuna Chain Website

Tuna Chain is the first Layer 2 solution on the BTC network, aiming to redefine the boundaries of blockchain capabilities. It is a unique platform that combines BTC's unparalleled security with ETH's versatile EVM functionality by leveraging the hybrid ZK-OP layer. Tuna Chain is more than just a concept; it is a transformative solution that brings new possibilities for the applications and utility of BTC.

Mission & Vision of Tuna Chain

Tuna Chain's vision is to revolutionize the blockchain landscape by combining the security of BTC with the versatility of ETH Shop EVM. Its mission is to bridge the gap between these two leading Cryptocurrencies, using their respective strengths to create a secure, powerful, and innovative Платформ.

Tuna Chain envisions a future where the application and utility of Bitcoin (BTC) are not limited to Digital Money. It aims to extend the capabilities of BTC to enable hosting of complex smart contracts and advanced applications, a feat previously achievable only through the Ethereum (ETH) network.

Tuna Chain Team

• Tuna Nigiri: Tuna Nigiri is the visionary leader of Tuna Chain. He has more than three years of experience in the Blockchain industry and six years of work experience in traditional industries. His strategic insights and leadership have played a key role in driving the success of Tuna Chain and ensuring the rise and innovation of the platform.
• Tuna Sushi: Tuna Sushi is a blockchain expert of Tuna Chain, with six years of experience in encryption technology, security, and the blockchain field. He is a core builder and owner of multiple complex encryption products, including custody wallets, decentralized finance (DeFi) protocols, and exchanges (DEX and Non-fungible Token). His expertise ensures that Tuna Chain always stays at the forefront of blockchain technology.
• Tuna Sashimi: Tuna Sashimi is an experienced blockchain marketing professional and planner with three years of experience in the field. She has successfully managed projects with venture capital support and facilitated the listing of Token on a top Centralized Exchange (CEX). Her marketing acumen and strategic planning are crucial to the market presence and rise of Tuna Chain.

Technology Behind Tuna Chain

Modularization The architecture of Tuna Chain is powered by Celestia and adopts a modular design. This modular approach effectively addresses the data availability challenges associated with layer-two solutions. Tuna Chain creates a trust-minimized ecosystem by leveraging advanced technologies such as two-dimensional Reed-Solomon erasure coding and Namespace Merkle Trees (NMTs). This significantly reduces the Transaction Cost for end users and greatly improves overall network efficiency.

ZK-OP layer The cornerstone of the Tuna Chain execution layer is the innovative hybrid ZK-OP (Zero-Knowledge Optimistic Rollup) solution. This layer ensures EVM compatibility, allowing Tuna Chain to move towards a complex ZK-OP hybrid architecture. The ZK-OP layer provides lightning-fast, secure transaction processing and powerful Smart Contract execution, revolutionizing Blockchain technology.

Tuna original Stable Coin - $Toro Tuna Chain, powered by $Toro, is a specially designed stablecoin aimed at meeting user demand. Users can collateralize BTC to obtain $Toro, meaning they can exchange BTC for a stable Digital Money. $Toro is not only a stablecoin; it is also the currency used for transactions on the Tuna Chain network.

The connection between $Toro and BTC provides users with the benefit of earning Interest on BTC holdings without selling BTC. This means that users can achieve higher investment returns without giving up BTC.

Operational Updates on Tuna Chain

As an extension of the BTC network, Tuna Chain broadens its functionality through innovative second-layer solutions while maintaining the basic security of BTC. This enables Tuna Chain to provide a secure, scalable, and efficient platform for executing smart contracts and processing transactions.

Trading Mechanism Transaction processing on the Tuna Chain involves meticulous sorting and processing of transactions, which are then securely published to the data availability layer (Celestia) and undergo final state confirmation on the BTC Block on-chain. Validators ensure data consistency and promptly submit fraud proof in case of discrepancies to maintain the integrity and security of the network. The Tuna Chain utilizes Optimistic Rollup (OP) and Zero-Knowledge Rollup (ZK) to enhance scalability. The recent Taproot upgrade on the BTC network has opened up new possibilities for enhancing native asset security, which the Tuna Chain leverages to protect native assets and enhance network security.

How does Tuna Chain work?

BTC's Layer 2 rolling solution and operation mechanism Tuna Chain uses a hybrid ZK-OP (Zero-Knowledge Optimistic Rollup Upgrade) method to enhance the capabilities of Bitcoin. This Layer 2 solution combines the EVM (Ethereum Virtual Machine) functionality of Ethereum with the strong security of Bitcoin. By using rollup technology, Tuna Chain can bundle multiple transactions into one batch, reducing the burden on the BTC mainchain and significantly dropping the Transaction Cost. This approach ensures faster and more efficient processing while maintaining high security standards.

Protecting Native Assets on BTC: Leveraging the Taproot Upgrade Taproot is an important upgrade for BTC, which improves the privacy and efficiency of Tuna Chain. It allows complex transactions to appear as simple transactions, thereby enhancing security and reducing Money Laundering. Tuna Chain utilizes Taproot to enable more complex Smart Contract and Multi-signature transactions to protect native assets. This upgrade ensures that assets on Tuna Chain are protected through advanced encryption technology, making it a reliable Decentralization application platform.

Transaction lifecycle on Tuna Chain The transaction lifecycle on Tuna Chain begins with initiating transactions on the second layer network. The transactions are then batched with other transactions into a rolling batch. This batch is processed off-chain, with Zero-Knowledge Proof (ZKP) verifying the validity of each transaction without revealing sensitive information. Once verified, the batch is submitted to BTC mainchain for final Settlement. This process ensures fast, secure, and cost-effective transactions while leveraging the advantages of BTC and Ethereum.

Getting Started with Tuna Chain's Ocean Trio

Tuna Chain's Ocean Trio is an exciting journey, divided into three captivating stages. Each stage offers participants unique activities to earn rewards through a point system. By actively participating in these stages, users can earn points and rewards, contributing to the growth and development of Tuna Chain.

Calm Waters The initial phase 'Calm Waters' has been launched. This phase introduces participants to the basic knowledge of Tuna Chain, provides basic activities, and helps users become familiar with the platform and its functions.

Whimsical Tides The second phase, Whimsical Tides, has also been launched, bringing more advanced features and activities. As part of the Tuna Chain Testnet, Whimsical Tides allows users to explore and test new features, and provide valuable feedback to help improve the platform.

Majestic Depths The final stage, Majestic Depths, promises to offer the most complex and rewarding activities. This stage will fully unleash the potential of the Tuna Chain, providing users with a comprehensive and immersive experience. Whether you want to explore the Tuna Chain ecosystem, earn points, or participate in friendly competition, this step-by-step guide will help you get started.

1. Visit the official points website The first step to join the Ocean Trio is to go to the official points website. Here, you can access all the information about the Ocean Trio and how to earn points on the Tuna Chain network.

• Information Center: On this page, you will find detailed information about the Ocean Trio, how it works, and the tasks you need to complete to start earning points.
• Task List: The website provides a clear overview of tasks that you can participate in, ranging from simple beginner tasks to more advanced activities.

2. Complete tasks to earn points

Once you explore the point website, you will find a series of tasks designed to help you earn points. These tasks vary in complexity and nature, allowing you to gain a deeper understanding of Tuna Chain and its partners while earning rewards.

• Task Diversity: Tasks can include various activities such as interacting with the Tuna Chain community on social media, completing specific transactions, or exploring new features within the platform. Each task can help you accumulate points.
• Earn and Learn: By completing these tasks, you can not only earn points but also gain practical experience about the Tuna Chain ecosystem. Whether it's learning about Decentralized Finance or testing the latest features of Tuna Chain, each task can enhance your knowledge.

The more tasks you complete, the more points you earn, which not only gives you a competitive advantage on the leaderboard, but also deepens your interaction with the ecosystem.

3. Ensure wallet compatibility Before completing the task, you must ensure that your Wallet is compatible with Tuna Chain. This step ensures a seamless experience for you to participate in the Ocean Trio and earn points.

• BTC Taproot Address: Tuna Chain recommends using BTC Taproot Address for the best experience. This ensures compatibility with the platform and allows you to participate in various tasks specifically designed for BTC Address.
• EVMAddress Binding: For users operating in the ETH domain, Tuna Chain allows you to bind your EVMAddress (from Metamask or OKXWallet) to your BTC TaprootAddress. This enables you to perform tasks on multiple networks and participate seamlessly in the ETH and BTC ecosystems without any issues.

By linking your EVMAddress with BTC TaprootAddress, you can maximize your ability to complete tasks and earn points, thereby participating in cross-network activities.

4. Track your progress on the leaderboard The leaderboard tracks the points accumulated by each participant, which is an interesting and competitive aspect of the Ocean Trio. This not only adds excitement to the whole process, but also motivates participants to stay active and complete more tasks.

• Competition Ranking: The leaderboard ranks participants based on their total points, creating a dynamic and engaging environment that allows you to see how you compare with others in the Tuna Chain community.
• Monitoring Ranking: You can access this place anytime to check your position. As you complete tasks, observing your own ranking rise provides additional motivation, encouraging you to continue participating and exploring new challenges.

Tuna DAO

Tuna DAO aims to empower the TunaChain ecosystem and provide opportunities for builders and contributors to participate in and shape the future of the platform. Members can stake $TUNA, receive Airdrops, earn stake rewards, gain voting rights, submit proposals, and manage the Tuna treasury through participation.

Key Features of Tuna DAO

• stake$TUNA: stake$TUNA is a way to obtain DAO voting rights. This voting right is crucial for participating in the governance of the ecosystem, allowing members to voice their opinions in important decisions.
• Qualifying for Airdrop: Members with voting rights are eligible to participate in various upcoming Airdrops. This provides additional incentives for active participation and interaction.
• Earn stake rewards: The initial stake reward is set at an annual interest rate (APR) of 30%, with the potential to increase to 60%. This makes staking $TUNA not only a way to gain influence, but also a profitable opportunity.
• Obtaining Voting Rights: Voting rights are granted based on the amount of $TUNA staked and the duration of the stake. The longer the stake duration and the larger the amount of $TUNA staked, the more accumulated voting rights. The calculation is done by dividing the daily amount of $TUNA staked by 182.
• Submit Proposal: Members with at least 2,000 voting power can submit proposals to promote the development of the ecosystem. This ensures that those who have the most investment in the platform can directly influence its rise and direction.
• Manage Tuna Treasury: DAO members collectively manage a treasury containing approximately 100 million $TUNA. The treasury funds proposals and projects that benefit the ecosystem, making the governance process democratic and impactful.

How to obtain voting rights Obtaining voting power in Tuna DAO is very simple. Members gain voting power by staking $TUNA, and the voting power increases with the amount of $TUNA staked and the staking time. This system ensures that those who are most committed to the platform have greater influence.

Proposal submission process Submitting a proposal in Tuna DAO is a structured process. A minimum of 2,000 voting power is required to submit a proposal. The proposal follows a 7-day timeframe, including one day for preparation and six days for voting. At the start of the voting, a Snapshot of the voting power balance will be taken to ensure fairness and transparency.

Tokenomics of Tuna Chain

The unique Tokenomics of Tuna Chain embodies its innovative approach in the encryption field. The ecosystem operates around three main Tokens: $TUNA, $TORO, and $WOOG, each with its unique purpose.

$TUNA

$TUNA is the governance Token of Tuna Chain. It grants holders the voting rights, enabling them to participate in the decision-making process and influence the future direction of the platform. \ $TUNA's total supply is limited to 210,000,000 Tokens, distributed as follows:

• Seed Round - 2.00%
• Partners - 0.50%
• private sale - 2.00%
• LBP - 8.00%
• Contributors - 15.00%
• Liquidity - 8.50%
• Ecosystem - 51.00%
• Community Upgrade - 3.00%
• Foundation - 10.00%

$TORO $ TORO is the native stablecoin of Tuna Chain. Although more details about $ TORO have not been released, it is expected to play a key role in maintaining the economic stability of the Tuna Chain ecosystem.

$WOOG $WOOG, as a unique channel to enter the Tuna Chain ecosystem, aims to provide holders with a first-hand experience of a diverse ecosystem. The total supply of $WOOG is limited to 1000 Tokens. 200 $WOOG Tokens will be distributed in the Bybit BRC20 inscription launch event, while the remaining 800 $WOOG Tokens will be sealed and unlocked only by external factors in subsequent activations.

Conclusion

Tuna Chain represents a groundbreaking development in the blockchain field. It combines the unparalleled security of BTC with the multifunctional EVM functionality of ETH.

By leveraging innovative technologies such as Zero-Knowledge Optimistic Rollup (ZK-OP) and Celestia's modular architecture, Tuna Chain addresses the limitations of BTC in terms of scalability and functionality while ensuring strong data availability and Transaction Cost drop.

OX coin Overview

OX Coin is the core of the gamified Derivatives exchange OX.FUN. The platform provides a gamified trading experience with Depth and Liquidity for all popular trading pairs, and has top-notch exchange tokenomics. OX Coin is used as collateral and profit/loss currency for the exchange.

Traders can complete daily trading tasks, earn up to 200% APY, participate in trading competitions, earn profits by placing coins in copy trading and proprietary treasury, and even earn MILK Token in losing trades.

OX.FUN allows users to convert the old version of Open Exchange Token (OX V1) into the new version of OX Coin (OX V2) within a limited time, and OX V2 will be minted at a 1:1 ratio, with all received OX V1 being destroyed.

What is OX.FUN?

OX.FUN is a new gamified Perptual Futures exchange built around $OX Coin, formerly known as Open Exchange (OPNX). It was originally a platform for debt trading, allowing users to trade tokenized debts such as FTX, Mt.Gox, and Three Arrows Capital. Later, OPNX changed its product direction and ceased operations at the end of January, officially transitioning to Perptual Futures exchange OX.FUN in early February 2024.

As a trading platform, OX.FUN's core function is Perpetual Futures. Currently, it has over 130 trading pairs and continues to update, including top Market Cap Tokens, meme coins, and other niche tokens. OX.FUN's slogan is 'Every trade is a profitable trade.' Profitable trades in Close Position can earn OX coins, while losing trades in Close Position can obtain Milk Coins.

How does OX.FUN work

At OX.FUN exchange, it is divided into two parts, one is the meme coin Perptual FuturesOX.FUN with OX as the currency base, which is executed on-chain at OX, and the other is the full-chain perpetual Contract Trading called OX .MARKETS with USDC as the base. Let's briefly introduce the basic functions of these two below:

CowFun

Earn 100% annual interest on the hottest Memecoin Perps and all memecoin deposits.

OX.FUN is on-chain OX, the only Token that can be traded on Spot, and the rest are Perptual Futures. In addition to over 100 popular meme Tokens, OX.FUN also has top Tokens in the market such as BTC, ETH.

OX.FUN is a hybrid CEX/DEX perpetual exchange. The project is still in its early stages, so the 24-hour volume is not high. Unlike other centralized and decentralized exchanges, all perpetual futures on OX.FUN use its governance token OX Coin as collateral. It adopts a dual-token trading model where profits and losses are settled in OX Coin. Trading profits can earn more OX Coin, while trading losses can earn Milk Coin. Milk Coin and OX Coin have equal value.

OX.FUN 4 ways to earn income: Perptual Futures, copy trading, prison, referral

Perptual Futures is the main feature of OX.FUN. Previously, there was a OX Farm feature where completing all trading tasks on the platform could earn up to 200% annualized returns on $OX balance. This feature has now been cancelled and replaced with referral deposit rewards.

1. Perpetual Contract Trading

The interface view is similar to other top exchanges like Binance and Gate.io, but on OX.FUN, you can engage in basic Perptual Contract Trading. I haven't seen the function to set batch Close Positions in advance yet. In addition to using OX as the base currency for Settlement, the trading interface also integrates community channels, where you can share your trading views while preparing to go long or short, and all views can be easily shared on Twitter. All trades use OX as Margin, and if you make a profit, you can earn more OX Tokens, while if you incur losses, you will receive Milk Coins.

2. Follow Trading Fund

In the interface of copy trading, you can see the duel between the two founders of OX, Su Zhu and Kyle, as well as the leaderboard of other trading masters. In each Vault, you can see the PNL of the trading master, the $OX staked by followers, and the $OX of the trading master, which is their own 'investment capital'. There is a profit and loss ranking function, and you can also search for the names of traders you are interested in. You can view the profiles, trading records, and Twitter of trading masters, copy their trades with one click, and even apply to become a trading master.

The official Chinese Twitter of OX.FUN will also have the latest MEME team battle, and interested traders can follow.

3. Earn more in prison

This prison function has a kind of Su Zhu's black humor, and squatting in prison is actually a staking function. "Prison" is a passive fee product that rewards stakers by charging a portion of the fee, plus the treasury emissions, and earning more as they invest. In the past, there was a separate label, but now it is labeled "Earnings". In OX. FUN can earn OX_Prison rewards by depositing and trading.

Deposit Reward: Non OX deposits can earn 100% APY paid daily by OX_Prison.

Trading Reward: The yield earned by trading OX_Prison is equivalent to 0.1% of your volume, with an annual interest rate of up to 73%.

OX_Prison itself cannot be traded, but it can be used as collateral for trading. It can also be converted into liquid OX Coin.

4.Recommendation Reward

Recommend depositing fren into OX.FUN to receive referral deposit rewards. Level 1 referral's MEME deposit earns an annual interest rate of 20%, while level 2 referral's MEME deposit earns an additional 4% annual interest rate. The people you refer can earn a 100% annual interest rate on all MEME deposits received in OX_Prison.

Recommend fren to trade on OX.FUN, you can earn 69% commission from all Money Laundering paid by the referees, and the referees can get permanent trading discounts (50% Maker discount and 28% Taker discount).

Bull Market

Trade USDC Perps and farm OX points. Earn points + professional trader experience.

If OX.FUN is the Contract Trading arena for meme coin players, then OX.MARKETS is more suitable for relatively professional traders to operate. OX.MARKETS' multi-chain routing adopts Bridgeless Cross-Chain Interaction technology, which can switch Mainnet at any time, supported by the Orderly Network technology. No matter which on-chain your funds are in, you can directly trade on OX.MARKETS, settle on-chain, and eliminate the friction of Cross-Chain Interaction fund transfer. Currently, it supports 5 mainstream Mainnets, including Ethereum, Mantle, Base, Optimism, and Arbitrum.

With up to 50x leverage on OX.MARKETS, traders can earn OX points and Orderly Network Merits in addition to profits from trading USDC Perptual Futures. OX points can be exchanged for OX Coins, and up to 2 million OX points can be earned every week. OX.MARKETS also has an alliance referral program where members can earn 40%-60% commission and non-members can earn 0%-20% commission on every trade by sharing referral links. Become an OX.MARKETS Pro member today!

Niu Chain

The OX Chain is an advanced Layer 3 blockchain platform designed for Meme coin, aiming to address the challenges faced by Meme coin in the current blockchain ecosystem. It allows users to transfer and trade assets, and provides incentive mechanisms to motivate asset bridging. The main features of OX Chain include high transaction speed and low fees, supporting the growth of the Meme coin industry and integrating it into Decentralized Finance, GameFi, and SocialFi.

The platform has a Decentralization exchange (DEX) called OX Swap, which supports the creation of various liquidity pools. The vision of OX Chain is to drive the next stage of development of Blockchain technology, bring more practical applications and legitimacy to Meme coins, and thus create an inclusive and versatile financial ecosystem, promoting the progress of the entire Blockchain industry.

OX.FUN team and investors

Team Background

The core members of the OX.FUN team include Su Zhu, the founder of Three Arrows Capital and OPNX (predecessor of OX.FUN), and Kyle Davies, the co-founder. Su Zhu was previously a trader at Deutsche Bank and Flow Traders, and graduated from Columbia University with a major in mathematics; Kyle Davies worked at Credit Suisse. Another partner is 0xyima, the former Chinese language director of Bitget (Twitter: Rolling Auntie @0xyima).

(Screenshot from https://www.rootdata.com/zh/Projects/detail/OX.FUN?k=MTEyMzU=）

Investment institutions

OX.FUN received a total of $4 million in financing in February 2024, with major investors including GenBlock Capital, Double Peak Group, and Emchain. The funding will be used for product development, talent pool construction, and market expansion, according to OX. In January of the same year, when it had just transformed into OX.FUN gamified perpetual exchange, without the replication trading pool and other passive earning functions, it had already reached $1.5 billion in OX deposits and $20 billion in OX volume, with only daily trading tasks and leaderboard competitions.

OX coin Tokenomics

$OX is the currency used to calculate profits and losses on OXFUN. When trading Perptual Futures on OXFUN, for every $1 change in Token price, you will make or lose 100 $OX per contract. For example, if you buy 25 contracts of ETH Perptual Futures, and the ETH price pumps by $10, then your profit or loss will be 25,000 $OX.

This design ensures that the Fluctuation of $OX price will not affect the Close Position price, but will jointly affect the profit and loss of the Perpetual Futures price and the $OX price. Therefore, compared to Perpetual Futures priced in US dollars, contracts priced in $OX may experience greater increases and decreases. For example, if both $OX and $BTC Perpetual Futures pump 2 times, your profit may be magnified to 4 times.

In addition, all losses incurred on OXFUN will be refunded in $MILK Token. The maximum supply of $OX Token is 9.86 billion, and 3.5 billion have been minted so far. The initial supply was minted through a 1:1 bridge method, burning Open Exchange ($OX V1) Tokens for exchange. This 1:1 conversion ended on March 15, 2024. Now you can only obtain $OX through the "Buy OX" function on the public market or via OXFUN.

During the launch phase, the treasury will retain the ability to mint up to 9.86 billion supply for community and team incentives, as well as an insurance fund for market maker losses. The final supply will be kept as low as possible.

$OX Token Distribution and Release

The project has not officially announced Token issuance or Token Airdrop.

Summary: Is OX coin a good investment?

OX coin and its ecosystem demonstrate an innovative cryptocurrency trading model that combines gamification elements and professional trading features. OX.FUN and OX.MARKETS provide rich options for traders at different levels, while the development of OX Chain opens up new possibilities for meme coin. The team has a strong background, and Su Zhu's BD capabilities are also very good, as can be seen from their previous investment in Three Arrows Capital and its portfolio. OX project has ample investment support, which lays a solid foundation for the future development of OX coin.

However, investors still need to be cautious. The inherent high risk of the cryptocurrency market, coupled with the unique pricing mechanism of OX coin, may lead to greater price fluctuations. In addition, the uncertainty of token distribution and release plans is also a factor to consider.

In general, OX coin represents a new trend in Cryptocurrency trading, and its innovative model and strong background make it promising. However, like all Cryptocurrency investments, investors should conduct in-depth research, weigh the risks and returns, and only invest an amount they can afford to lose. The future development of OX coin is worth following, but investment decisions should still be based on careful evaluation and individual risk tolerance.