Zero to One: 2021 Recap and 2022 Outlook

2021 was an amazing year for the crypto world. Aside from progresses and innovations in L1s, L2s, DAO governance, DeFi and NFT applications, we see a continuous trend of institutional adoption from a bird’s-eye view.

2021 Recap
Since September 2021, Gate Ventures has been supporting and working with visionary builders in the crypto industry. The blood of “BUILDer” has been in Gate Ventures’ veins since its birth. With the team growing organically, we now have footprints in Singapore, Hong Kong, and the U.S. By Q1 2022, we expect to have a global team covering all crypto hubs. As the team leader, I really appreciate our new members’ efforts in building this venture brand. They are so young, passionate, and energetic. At Gate Ventures, we think about two questions:

- What will be there in the future?
- What are practical approaches to bring the future to us?



In less than 5 months, we have closed more than $20m investments in 17 portfolio companies and projects, covering opportunities from Seed to Pre-IPO rounds. At Gate Ventures, we take a global approach to find innovations. The sector chart shows that we have been investing heavily in the financial infrastructure, with quite limited exposure to applications in the NFT and Gaming sectors. In our next stage, we will catch up in the tech-infra and app-layer sectors. Our portfolio shows a well balanced geographic distribution across the globe. With new members continuing to join from the U.S., we are going to broaden our exposure in America later on.






2022 Outlook
Thesis 1: Valuations go down.
I’ve been talking about the possible macro liquidity shortfall in 2022 since this January.


Gold is actually a very good indicator of interest rates. Gold price peaked at ~$2,000 USD in August 2020, while mid-/long-term rates bottomed at the same time (short-term rate had been in the bottom area for 12 months). Since the crypto market is a new asset-class market, it will likely be impacted by the effective rate.



With the expectations of a naturally lower post-pandemic inflation, and Fed’s scheduled rate hikes and balance sheet runoffs, the effective rate would go high in 2022. This could have significant impacts on most risk assets’ valuations.

Thesis 2: Rollup L2s become popular.
Ethereum L2 scaling solutions like optimistic- and ZK-rollups were introduced to the crypto market in 2021. With the implementation of EIP-1559 and continuing growth in onchain applications, it is not practical to put all retail use on the main chain. I expect that more and more apps will move to L2s for better UX. From a long-term perspective, ZK-rollups would win the competition.

Thesis 3: DeFi integrates with compliance.
Institutional adoption is still in the very early stage. As DeFi grows exponentially, it is meaningful to actively explore the regulatory uncertainty. There will be more and more crypto-native DeFi applications expanding to TradFi markets. Compliance will be necessary in order to acquire more shares in the institutional world. In the foreseeable future, permissionless DeFi and compliant DeFi will co-exist.

Thesis 4: Composable metaverses emerge.
A closed metaverse is just a ship in a bottle. A single game or NFT app is far from being tagged as “metaverse”. Metaverse is not a single picture, game, or tool. Metaverse is the Runtime Environment of human’s open interactions. All interactive NFTs, games, and tools are subsets of the “metaverse” concept. There will be diversified sub-metaverses emerging in 2022. And eventually, these sub-metaverses will be composable to each other.

Thesis 5: DAO governance evolve.
The magic of DeFi 2.0 is in DAO governance. We are moving from the conceptual and philosophical phase to the empirical phase in DAO governance designs. More sophisticated tokenomics will emerge. The evolution in DAO governance will take place at an industry scale.

Compared with last year, 2022 will be much more exciting and thrilling. At Gate Ventures, we are ready to explode from 1 to 100.

To all the crypto industry builders:
Keep your eyes on the stars and your feet on the ground.