The merge of Ethereum has become a major event in the world under the current bear market consensus. We are experiencing this critical moment in the history of crypto, and we are also experiencing this same cold crypto winter. Winter is coming, will spring be far behind?
will the butterfly flapping now will cause what future ? We stand on the shoulders of the world's outstanding investment institutions and giants of crypto KOL. We look forward to and analyze the mainstream development status, investment concepts and layout directions as samples to understand the judgments of global investment institutions on the current situation and trends of the industry, and jointly discover and deploy the most A track with potential.
1. Ethereum Value Increase
As early as the beginning of December 2021, Vitalik published an article titled "Endgame" (the final stage), putting forward the view that all blockchains will eventually converge in the future. In July this year, Vitalik spoke again at ETH CC To sum up, Merge is just the beginning of a new phase in the development of Ethereum. Merge => Surge => Verge (edge), followed by Purge and Splurge. These processes may happen in parallel or happen one after another.
The first step is the well-known Merge in progress, which refers to the full transition from proof-of-work POW to proof-of-stake POS;
The second part, called Surge, plans to increase the scalability of Ethereum, dramatically increasing bandwidth and throughput, especially on zk-rollup..
Figure 1: Summary of Vitalik ETH CC's speech
Regarding the progress of the most important infrastructure in the crypto world, we believe that the Ethereum merger (Merge) will be successful iteratively. Regarding the market reaction, since ETH has rebounded from $1000 in June, it has increased by 100%, coupled with the switching of the huge application ecosystem. The impact that the upgrade may bring is repeated, and the adjustment will be a high probability event.
In the medium term, after ETH merges and converts to deflation mode, the shackles of ETH 2.0 technology development space will be fully opened, and the status of Ethereum's security anchoring the basic public chain will be greatly improved, which means that Ethereum is moving towards becoming a world-class financial settlement layer and the underlying infrastructure of the Metaverse have taken a key step, and the value growth trend of ETH will be gradually released and reflected in the medium and long term.
2. Tuyere Track After The Merge
The Ethereum merge is the most important event for the global crypto infrastructure in 2022, but the merge is only a small step in the development of Ethereum, and it will not immediately bring about a reduction in Ethereum gas fees or a substantial increase in transaction speed.
Therefore, the most important development direction after the merge will be zk-rollup. zk is one of the potential core driving forces in the next cycle and has long-term value. It occupies the 2 core level narratives of Ethereum scaling and privacy computing. ZK acceleration network and mining is the focus of the organization's layout, because it has a stable game structure.
After the merger, Ethereum is about to usher in its Layer 2 era, and ZK-Rollup is one of the best solutions among all L2 scaling technologies, and it is also the most worthy of our attention.
The zk-rollup track pattern has become increasingly hot, and the three major players of zkEVM：Scroll、Matter Labs and Polygon have all suggested that he is the first company to bring zkEVM to the market, of which Polygon has officially announced the launch of the world's first open-source zkEVM implementation in July. The is a revolutionary step and probably the second most important event in the field of crypto development in 2022 after the Ethereum merge.
Figure 2: Comparison of zk-rollup track routes
From the perspective of zkEVM - the most important domain, StarkWare, zkSync, Polygon Hermez, and Scroll take different technical routes. Matter Lab's zkSYNC 2.0 and Polygon Hermez solutions are more universal. They are leaders in contract compatibility and EVM Bytecode compatibility respectively. Among them, we are more optimistic about Polygon's comprehensive layout, including the multi-angle collaborative layout formed by Polygon. For example, Polygon Zero will be able to better exploit the endless potential of zkVM.
YieldDAO believes that from the rise of many public chains in 2018 to 2019 and the merge of Ethereum in 2022, the global encryption market has once again confirmed the status of Ethereum as an infrastructure public chain. The most important basic consensus of the metaverse and NFT industry.
Based on this research, we will preferentially promote YieldDAO to build a technical architecture path based on Ethereum and zk-rollup to support the layout of the YieldDAO metaverse application track in the medium and long term.
3. The Evolution of Web3 and Metavers
Ethereum is becoming the main operating layer of the Metaverse and Web3, and ETH obtains the value of cultural assets through NFT.
We believe that the Ethereum ecosystem will be an important part of the metaverse.
Many current public chains, such as sonala, flow, sol, near or ftm, may not disappear in the future. But these public chains have chosen to sacrifice "decentralization" for better scalability and faster speed.
In essence, the meaning of the existence of web3 (metaverse) is the industrial subversion brought about by decentralization. But from a philosophical point of view, centralization and decentralization are a unity of contradiction. In a decentralized world that allows centralized things to exist, such as social activities and other high-frequency activities, the demand for decentralization is not so great.
However, in the key elements of the world system, such as economics, politics, and culture, decentralization and diversification are the meanings that support the existence of this world
Therefore, the future metaverse will be a multi-chain structure, but we see that the current mainstream public chains carrying economic, political, and cultural social activities are still dominated by Ethereum, and the rest of the public chains still need to go through time and practice. long test.
The value and valuation carried by Ethereum today are limited to:
1) Application value
2) Monetary value
3) Capital value
4) Cultural value
Among them, NFT is the current main manifestation of cultural asset value. Cultural value can be given a specific valuation hardly. It should also take into account history, power and the value of digital assets in the future metaverse. This has gone beyond the consideration of asset value. It also includes social value, cultural and historical value, and the future development value of the human digital economy.
4. Light of NFT Bear Market
NFT is still in a deep bear market, but we see that NFT is becoming the main channel for ETH to obtain the value of cultural assets, which is by far the most important application channel for cross-border out of the crypto world.
The NFT bear market consensus itself proves that NFT is going through the first complete bull-bear cycle. Due to the rapid development of Web3, the duration of the bull-bear cycle will be difficult to predict, but it is certain that this is The inevitable process of becoming mature of any vertical digital economy track.
A piece of good news we’ve seen recently: Blockchain gaming company Limit Break recently announced the completion of $200 million in financing, making it the largest single-funded crypto project in recent months. After the official announcement of the financing news, the NFT series DigiDaigaku, which was just released by Limit Break on August 10, once ranked first in the trading volume within 24 hours on OpenSea, and the floor price once rose to around 18 ETH during the peak period.
From Free Mint to the floor price of 18 ETH, DigiDaigaku completed an unimaginable contrarian growth under the bear market. DigiDaigaku is currently only available in the form of Stealth Drop (stealth launch) + Free Mint. As for the next step, Gabriel Leydon said that because he does not want others to imitate it, it will not be announced to the public for the time being.
It is difficult to see the difference between the two from Gabriel Leydon's interview and other public information. "Free to Own" seems to be another high-level term for "Free Mint", and it is inevitable to have old wine in new bottles.
The game behind the mentioned NFT has not been released yet, and no game dynamics can be found. Gabriel Leydon only revealed that behind it is a team with rich experience in MMO games.
From this point of view, DigiDaigaku seems to be no different from the Piece Of Shit project that once became popular and quickly fell. Quickly attract a group of users with free Mint to form a consensus, raise the price, and earn income from late entrants through some gameplay design intentions. “Piece Of Shit” also claims to be launching the game, but the game has not been launched yet, and the floor price of “Piece Of Shit” has dropped to 0.06ETH, which is almost zero.
But “Limit Break” is still in its early stages, and despite the ambiguity of the so-called innovative concept of "Free to Own", the project itself doesn't seem to have much practical highlights. However, under the bear market, and with the ability to get $200 million in financing from well-known investors such as Paradigm and FTX, the next action of “Limit Break” is still worth looking forward to.
What we can clearly feel is that after the "Play to Earn" model, capital or the market urgently needs a new model to emerge. As an early project, Limit Break comes with a number of halos, $200 million in financing, luxury investors , the successful entrepreneurial experience of Web2 games, the innovative concept of "Free to Own"..., but the market is never short of new stories. After the story is told, hopefully “Limit Break” will open up a new wave of innovation and growth for the sluggish market.
5. The Beginning of a New Narrative of Web3.0 Digital Economy
Ethereum Merge is an important project that has been brewing for seven years. We believe that the Ethereum merger is of epoch-making significance. It ends the meaningless debate and hype around the "Ethereum Killer" public chain battle, and it is the first time. It points out clear for the evolution direction of the most important infrastructure architecture of Web3.0 and Metaverse technology.
With the completion of Ethereum Merge, we will most likely see that the zk-rollup L2 track will gradually enter the mature stage of the mainnet launch in 2023, which has always restricted the speed and capacity of the blockchain and metaverse economic development. With mainstream solutions, the mainstream commercial DAPP application ecology of Web3.0 will begin to gradually enter a prosperous period.
The bear market light that DigiDaigaku flashed in the cold winter of the market gave us new Web3 narrative clues. As the basic technology and important component of Web3.0, NFT will enter the 2.0 stage of the new narrative of the digital economy. NFT is based on the rapid development after the Ethereum POS infrastructure merge. , in addition to the current digital artwork positioning, will inevitably evolve in two major directions, one is the direction of financial assets, and the other is the direction of tool application (Dapp), we may see Web3.0 digital The economic Cambrian explosion of life.
YielDAO based on the research on the industry status quo of the digital economy and the judgment of technology trends, and a firm layout to promote the technical infrastructure route of Ethereum. In the field of metaverse middleware and NFT application system, we will be based on Ethereum + zk-rollup system, promote the implementation of the NFT-Based Metaverse's original digital intellectual property METAIP and the core IP DragonCapsule, promote the implementation of the NFT-Based new generation of visual DID decentralized identity protocol Openavatar Protocol, and build an open collaborative DAO system based on the OpenAvatar Stack. To build a Web-based industry metaverse solution-0xSPACE, and the upcoming MetaBox metaverse terminal in the upcoming Web3.0 super cycle, to jointly build a new world of metaverse digital economy.