What will be the crypto narrative for the next cycle?

Original title: "The Next Big Crypto Narrative"

Original author: Matti

Original translation: Jack(0x137), BlockBeats

Dang Da While most people are still trying to adapt to the bear market, we find that there are already people who want to jump to the next stage of the market as soon as possible. Beware, history has proven us countless times that bear markets always have their own unique way of playing.

Your personal journey through the crypto cycle is actually not the same as the famous "Hero's Journey" archetype There is not much difference (BlockBeats note, the "Hero's Journey" prototype comes from Joseph Campbell's "The Hero with a Thousand Faces", which is a classic template for Hollywood movie design hero roles), from the "Hero Return" stage to the new "Adventure Call" Phases take a while. During this period, it is best not to mess around, but to sit patiently for a while.

There are those who are always ready for the next adventure, calling every potential narrative that could explode, what they call the market's "Supernatural Aid." But "supernatural pushers" don't come around very often, and today we live in a real world (increasing interest rates, inflation, and economic wars) where the supernatural never seems to come.

Until we ask the "paranormal" to happen, we feel like we're living forever at the bottom. The word "bottom" seems to have disappeared from our lexicon because the crypto world has become so "flat" that even a 5% move feels like a big deal.

On the journey to the next bull market, we will encounter many "false prophets" , some of them even talked about some strange things called "fundamentals" that they never mentioned during the bull market.

The irony is that we laugh at the fundamentals when the market is good and beg the market to acknowledge them when the market is bad. I heard about one recently, and it's called the "Ethereum Merger".

Although this is indeed a major event in terms of "fundamentals", those Those hoping for quick redemption may be very disappointed. Because this is not the way markets work, it will take time for an event as important as this to be widely accepted by the market.

And the biggest disappointment may come from those who thought they had reached the "iron bottom", but found new lows again and again people. This is the time when most people lose their last hope, fear turns to disappointment, and then turns to exhaustion and death, the market becomes boring, and capital and practitioners have nowhere to go.

But while most have lost interest, unbeknownst to them, some are still Research tools, with the help of liquidity "golden fingers" in the future, will become the real "supernatural pushers" of the market. Lest we become dull in the coming dreary period (after a healthy period of volatility), let's explore the underlying narratives that could be the next wave of "supernatural pushers."

Hey, ever heard of "macro"?

The real supernatural driver for cryptocurrencies as a risk asset is the Federal Reserve's "India cash machine”, but this applies to almost all asset classes. If the Builders sit idly by for the next year or two, the new cycle will not be so glamorous. The narrative about "new things" is very important, and it is an important part of the industry's "vision reset".

Only when we have a narrative of new things can the encryption market be able to achieve a macro-reactionary (Macro-Reactionary), or in other words with a macro-background contend. So when everyone is too busy trying to stay sane in a bear market, technological developments lack change and innovation, we need to look outward to the world to change its stance on this new asset class.

Bitcoin does this over and over again, it keeps changing itself narrative. Since the market crash of 2018, the crypto world has been chanting “institutions are coming” in unison. In the end, the institutions did come, but not when the market was calling for help, but when everyone was busy paying attention to their positions that kept pulling orders.

Bitcoin as a technology does not change, but Bitcoin is also a missionary, cleverly using global macroeconomic events to promote its own beliefs and dogma, and Decorate it in the process. From payment systems, digital gold, to hedging inflation and cloud swiss bank accounts/trusted neutral bonds.

Another trusted neutral asset is Ethereum, which is being upgraded and mature enough to Let your own narrative become "macro-reactionary". Ethereum is now strong enough to compete with Bitcoin on a macro narrative scale and, moreover, it presents the opportunity to generate yield.

In terms of current macro events, one obvious line of thought is that we are going through a macroeconomic transition caused by geopolitical events. This is a new interpretation of the clash of civilizations, East versus West.

Obviously, when the geopolitics is changing, the bottom-up microscopic view of central bank policy Understanding is useless. This is not a peacetime economy, but a wartime economy, which means liquidity is being injected more into the building of real things and less into "online casinos" like cryptocurrencies.

This line of thinking is based on the premise that inflation is not demand driven but structural (i.e. supply driven) and not It will be alleviated in the short term due to the hot war in some cold areas (economy, cyberspace, etc.). Globalization is over and global trade will be fragmented.

As the Russian central bank’s foreign currency assets are frozen, we are hearing more and more about countries considering Take a diversified approach to the news of the US dollar international trading system. The dollar is not a convincingly neutral asset, which can be a problem in times of war for those who do not abide by the "dollar node".

I expect cryptocurrencies will try to create some new narratives around these geopolitical events, some even Likely to become a reality, because a credibly neutral currency has always been a fundamentally strong proposition. Can the "cloud kingdom" of ETH and BTC defend its sovereignty and profit from the war like Switzerland during World War II?

Shining new things

In the past, macro narratives typically built strength over time, accelerating only when exposed to and mixed with new things and technologies. So instead of relying on macro narratives, we should explore potential micro narratives for the future.

The big bull market in 2021 began in DeFi Summer in 2020. Speculative Self-Referential Feedback Loops are the catalyst. Then, we saw the rise of NFTs and GameFi in the same cycle. So what are the potential technologies in the future?

Real DeFi 2.0

Although we have heard about DeFi 2.0 in the past round of bull market, I don't believe they really did it. If there is DeFi 2.0, I think it will be released in the next year or two. I include some thoughts on what DeFi 2.0 might look like:

1.< /b> More sustainable yield

2. More complex on-chain tools, including the ability to build complex structured products

3. More KYC (this sounds bad, but using some ZK Proof magic for privacy would be nice)

4. Products related to the real economy (not meme production)

5. New stablecoin experiments (this time may not be algorithmic stablecoins )

6. I am still watching OlympusDAO closely as I believe in the narrative of establishing a crypto reserve currency independent of fiat currencies

When the new crown epidemic began in March 2020, I was looking for DeFi application scenarios in the real world, because I thought the world would move towards Regional developments, global travel and trade collapse, and regional lending dApps imagined as crypto extensions of the real economy. Maybe this time someone will come up with a viable encryption model for the WIR franc (BlockBeats note, the WIR franc is a Swiss community currency issued and supported by the Swiss banking cooperative WIR Bank).

Now I am more curious about how to connect DeFi with actual business. Bridging this gap will allow DeFi to grow into a more sustainable product and not just a speculation-based Web3-native solution.

Web3 Business

The answer here seems to be GameFi. With their massive early success, dApps like StepN have truly captured users, but now face the challenge of translating Ponzi’s token economy into a sustainable business relationship with their users.

In-game purchases, referral fees and utility NFTs etc could actually move us towards decentralization Business. I haven't seen any successful prototypes yet, but we need to get people to spend their money on the blockchain instead of gas fees and speculation.

Another manifestation of decentralized commerce may be related to content production and monetization. I can imagine the DAO organization owning the intellectual property of Tolkien, Harry Potter, Star Wars and other entertainment series. Community owned and operated media companies are also an interesting proposition given the natural tendency of cryptocurrencies to drive capital formation.

While people are skeptical of DAOs, it is important to realize that their failure Rates are no different than typical startups. They can still be effective stewards of content production and monetization. Getting to this stage required an app that combined the best of Discord and Kickstarter, because we needed a smooth user experience.

The easiest achievement of Web3 business is the game on the blockchain, in which the Items are truly owned by people, and maybe they become more important than the game, which also helps to drive games to be built around in-game items that can be transferred between platforms.

Web3 Social

This is already such a hot topic that I have provided a lengthy thought piece on the matter (BlockBeats note, see Beyond Buzzwords: Next Generation Of The Social Internet"). Most critics will argue that being "social" on a blockchain is redundant. But Web3's social will try to separate the social graph and the platform, so that users have sovereignty in the digital field, and their relationship graph can be freely transferred in various social places.

If Web3 social is only for the crypto community, it will likely fail. It is not enough to provide ideological motivation, the key here is to introduce new forms of business models that overlap with "Web3 business", these new social tools must be intuitive and easy to use.

Back to the main advantage of cryptocurrency frictionless capital formation, the next era of social media may be Emerging around crowdfunding and community governance. Social media is already a big platform for content monetization. Web3 solutions can broaden possibilities for creators and their audiences.

This is why if NFTs are intrinsically linked to the future of social media, the next major social Applications will be powered by cryptocurrencies. Of course, the question remains: is the future of social media really intrinsically linked to NFTs, or is it a red herring fallacy?

Decentralized Science (DeSci)

According to future.com, this trend sits at the confluence of two broader trends (pictured below):

In short, apart from the systemic failures described in the introduction, the problems in science or academia can be described as:

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1. Institutionalized academia has produced career bureaucrats who only seek to optimize their internal reputation (journal publications) rather than select potentially risky

2. Innovation funding within the scientific community is centralized, corrupt, unproductive, and distinct from the raw tinkering/entrepreneurial nature of scientific discovery< /p>

3. Knowledge is closed source, locked behind a paywall. In this way, data (and power) is concentrated in the hands of a few major publishers.

Funding research that helps alleviate specific problems through online communities is an interesting prospect. Necessity is the mother of invention, and I have seen so many people sharing tips online about health issues, especially when modern medicine has no real answers. Giving academics the ability to fund research and potentially develop cures for diseases is an exciting prospect. But turning Reddit into a crowdfunding platform for scientific discussion, research, and development still seems like a stretch (and maybe that's why it's so cool).

Atomic World

For most "living in mom's basement" netizens, this is indeed a crazy proposal. I want this to be the narrative that spans all of the above. By "atomic world" I mean the connection between cryptocurrencies and the production economy, the real thing.