This article is reprinted with permission from Baihua Blockchain, author: Li Rongqiang, copyright belongs to the original author.
The tide is changing. While many are still immersed in the celebration of the approval of crypto ETFs, the "critical point" for the large-scale application of Web3 has quietly arrived.
This is not just the implementation of friendly legislation or the maturity of blockchain technology; it is a profound "paradigm shift": exchange businesses are being forced "on-chain," and more efficient and transparent DeFi is emerging, blurring the boundaries between centralized and decentralized at an unprecedented speed.
The future is here, and the integration of traditional finance and DeFi will unleash tremendous opportunities. As industry participants, we must discern what constitutes a true "entry opportunity" and what is merely the last bubble.
From the perspective of the medium to long-term development of Web3, there will be significant opportunities for application landing. Previously, it was said that it was too early, but we are now approaching the critical point for several reasons:
First, from the legal and regulatory perspective, with the issuance and expansion of cryptocurrency ETFs, some friendly remarks from President Trump regarding cryptocurrencies, and the subsequent implementation of friendly legislation, the industry is being given the green light. For example, the passage of the stablecoin genius bill in the middle of this year will allow more traditional financial institutions to enter the market with professional knowledge, tools, and real capital.
Second, the improvement of blockchain and Web3 technologies and related infrastructure has fully met the conditions for large-scale application migration. Ethereum is celebrating its tenth anniversary this year, and after multiple black swan events and various destructive stress tests, time has proven that Ethereum, Layer 2, and various supporting infrastructures can support large-scale application landing.
As technology and infrastructure mature, the cultivation of related professionals and talent teams has also begun to take shape. In particular, the ecosystem of smart contract developers represented by Solidity and Rust is supporting the progress and future development of the industry.
Additionally, the emergence of MicroStrategy and numerous US stock DAT companies has significantly lowered the threshold for institutions and individuals to purchase cryptocurrencies. Previously, many institutions (such as funds and family offices) were not allowed to buy crypto ETFs, but they could buy US stocks. Incorporating cryptocurrencies into DAT companies can be seen as opening Pandora's box, further lowering the entry barrier for institutional and individual investors. This is also a form of innovation, but it is crucial to pay attention to asset custody issues and the accompanying dark operations of wash trading and various liquidity swaps, which will take time to improve. It is also expected that some black swans will emerge, so I say the market will present opportunities amidst the chaos.
In summary, we have reached a certain critical point, and it is an opportunity for Web3 mass adoption. As ordinary investors, we need to find a good entry point.
The development of any technology and related industry is always a winding upward path. There is no need to rush; there will always be an opportunity for you to enter. All winters provide a chance for those who have not boarded the train to get back on.
On one hand, there are still opportunities in public chains. It is difficult to find opportunities that yield dozens or hundreds of times like before, but relatively speaking, there is still significant growth potential, and some small projects are also rare.
Secondly, there is the opportunity for large exchanges to migrate their businesses on-chain. The previous wave saw exchanges leveraging their traffic advantages to monetize influence and traffic, obtaining high valuations through early project investments for listing. However, this wave can no longer continue.
Users are not fools. Projects that start with valuations in the tens or hundreds of billions of dollars, many of which have very questionable basic business logic, launch with high valuations and then crash.
I believe this wave mainly presents opportunities brought about by the genuine migration of exchange or traditional financial institution businesses on-chain. Additionally, some traditional DeFi projects (consider how quickly this industry has developed; DeFi emerged not long ago and has already split into traditional and new DeFi) that have cash flow and have been operating for a long time, along with opportunities for collaboration with traditional institutions or the addition of traditional business on-chain with refined management, will also arise. With the allowance of legal regulations, many previously prohibited attempts can now be made, undoubtedly providing a lot of imaginative space. We can take Binance and Coinbase as examples.
However, before discussing this, we must mention the recently popular project Hype, which has sustained trading volumes at this level with a team of just a dozen people. This fully demonstrates that anonymous, permissionless perpetual and spot decentralized exchanges may indeed be the main line of the future.
From a core perspective, it is more efficient, more transparent, and more decentralized. A dozen people have supported such a large trading volume, while Binance requires a massive scale, needing technology, operations, customer service marketing, and various public relations to maintain relationships with KOLs, and it is somewhat strenuous, especially after the market rumors following the 1011 crash.
Therefore, Hype's model has hurt many centralized exchanges, forcing them to confront the issue directly and engage in perpetual and spot DEXs. At the same time, due to technological advancements, the order book model's technology has matured enough, and efficiency is increasing.
Thus, Binance has CZ directly promoting Aster, Coinbase has Avantis, and other exchanges are following suit. They are building a full chain from exchanges to public chains to DEX and DeFi applications.
For example, Binance-BNB Chain-Aster (PancakeSwap/Lista/Venus), Coinbase-Base-Avantis (Aerodrome/Morpho). Currently, Avantis only has perpetual contracts DEX, but I estimate that related functions will be on the way to complete this chain.
This is truly about gradually migrating the business of exchanges on-chain. This is an unstoppable trend because permissionless, anonymous, and fully decentralized exchanges provide extreme efficiency improvements compared to existing heavily operated centralized exchanges.
This is a technological advancement and a conceptual advancement.
Of course, I am not saying that centralized exchanges will become obsolete in the future; they will continue to exist. Currently, in terms of matching trades and supporting large-scale user concurrency, centralized exchanges have their advantages, which is undeniable. Therefore, centralized exchanges will exist in the long term, but the market space will be eroded by decentralized exchanges.
However, this permissionless and anonymous decentralized exchange provides more people with a choice.
The aftermath of the 1011 crash event, due to the lack of transparency in the automatic liquidation mechanism (ADL: auto-deleveraging) of centralized exchanges, harmed many users. Market rumors suggest that the actual liquidation volume during the 1011 crash was much higher than disclosed. This will create a demand for some people to migrate to completely decentralized exchanges.
The response from exchanges, based on the principle of joining if they cannot compete, has led Binance to launch Binance Alpha and Alpha 2.0. Currently, Binance users can purchase on-chain tokens using funds from the exchange, and the Binance homepage has a Binance Alpha section, with liquidity provided by PancakeSwap. In the future, what is unacceptable about lending funds from exchanges to Lista and Venus? They may have already connected; we just don't know. These matters are imperceptible to users.
In theory, Coinbase proposed this slogan earlier. When the Base chain was launched, it stated that it would put all of Coinbase on-chain, but it has always emphasized its compliance, which inevitably constrained its related business, especially given the various restrictions imposed on cryptocurrencies by then-President Biden and the SEC chairman. Coinbase could not fully embrace the Base chain and projects like Binance.
However, the Base chain has now clearly announced plans to issue tokens, which may completely change this landscape, providing a strong boost to the Base chain ecosystem and the entire Coinbase business ecosystem.
At the same time, consider Coinbase as a publicly listed US company, and how it will handle the legal framework related to the issuance of tokens for one of its businesses, the Base chain. If this process is streamlined, it will set an example for other projects. There will be more DeFi companies going public, and possibly more public companies issuing tokens. Related mergers and collaborations are also an option; Pandora's box has been opened.
As long as the effects are good and there is a wealth effect, it will definitely trigger imitation, leading to more businesses migrating on-chain, ultimately blurring the relevant boundaries, and even making it so that users cannot distinguish between centralized and decentralized.
Additionally, I have recently heard that HashKey, a compliant exchange in Hong Kong, is also considering going public. I don't know how they will handle their already issued tokens, HashKey; the situation is becoming increasingly lively.
On the other hand, Robinhood, as an established brokerage, has successfully transitioned into the cryptocurrency trading business, with its market value soaring. At Robinhood, users can trade stocks as well as crypto assets, and they may not even know whether they are buying coins or stocks, further blurring the boundaries. Will other established brokerages follow suit?
Moreover, on many perpetual DEXs, it is now possible to trade some large-cap US stocks. You can also buy and sell US stocks on the Kraken exchange, which means that in the future, it will be possible to trade stocks 24/7 on decentralized exchanges and various cryptocurrency exchanges.
First, we won't discuss whether this is right or wrong; at least this will speed up the flow of capital. Previously, due to the backwardness of financial infrastructure, many people in various countries and regions could not even play with stocks, let alone have bank cards. However, the advancement of Web3 infrastructure allows stablecoins to reach more people. Compared to their local currencies, US dollar stablecoins are a lifesaver, and it can all be done with just a mobile phone.
Inclusive finance itself is a lifeline for many underdeveloped countries, but if these things are inherently risky, they also become victims of that risk. Therefore, everything has two sides and should be viewed comprehensively.
As the industry deepens, there will be higher demands for projects and practitioners, especially in terms of professionalism, requiring more knowledge, which aligns with the development trajectory of new technologies.
Currently, new projects often emerge with valuations in the tens or hundreds of billions of dollars, which are basically impossible to evaluate. I hope for a moment of chaos when these projects return to reasonable valuations, at which point we can carefully consider which projects are worth researching.
Therefore, the first principle in this industry is to survive for a long time, to stay away from those fleeting memes, to avoid leveraged contracts and related derivatives, and to steer clear of debt. Only by surviving for a long time can one see the stars and the sea of Web3.
Related: DraftKings acquires Railbird to enter the prediction market, choosing Polymarket as the clearing service provider.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
