Babbitt column | Investment opportunities in the secondary market are greater than the primary market

About 2019, about February, friend L gave me a white paper, VDS. Very excited to tell me, big opportunity. I read the white paper and said that it seems to be a big gambling game. It is very early to participate in resonance. But I did not participate, I did not dare to participate in the primary market of pure game. There is a gambling in the secondary market (with a casino), which is not within my ability circle.

The primary market is much more dangerous than the secondary market. There is a secondary market, there is depth, in the worst case, you can still have some residue. But the primary market is able to return to zero.

In 2019, there are also opportunities to reach the primary market. But I advised my friends to stay away from the primary market. From this year on, for a long time, maybe more than two years, the opportunities in the secondary market are greater than the primary market.

From 2016 to 2017, the first-tier market in the currency circle was full of opportunities. At that time, the entire primary market was crazy enough to earn money as long as it grabbed the share. There is no need to evaluate the project itself. No matter how much junk items are going up.

By 2016, the expansion of Bitcoin has been discussed for a long time. The expansion of the currency from Bitcoin raises some big questions about the current status of the blockchain, such as the tps bottleneck; scalability issues; better consensus algorithms; improved user experience; functions can be more and more abundant; Chain; privacy; and so on. We don't have to worry about the specifics of these issues.

All the primary market projects at the time were all about writing white papers. Around these issues, a group of very arrogant people gathered, put forward a very good solution, and set up a project to successfully finance.

The big outbreak of the primary market from 2016 to 2017 is that the entire currency circle believes that there is huge room for improvement in blockchain technology, which is that a lot of primary market projects have been achieved. But this year, the problem of the currency circle is still these, or tps, scalability, performance, and so on. These problems are still on the way to solving. Until now, there have been no new, substantial, and big problems raised. These new issues are the key to achieving a primary market.

Since the original problem is still being perfected, and the original problem has already occupied the project, everyone is successful in getting money, some people, history, and consensus. If you want to set up some new projects, it will be very difficult.

The big bull market in 2017 brought huge amounts of money and talent to the currency circle. These funds and talents have been deposited in the primary market projects. Although there are many primary market projects established in 2016 to 17 years, capital, talents, and reputation are almost consumed. But still left a lot of rich, some, and consensus projects. These projects are all focused on solving some of the problems of the blockchain. You are now going to see the top 30 of the market capitalization list, many of which were established in 16 to 17 years. The projects that have survived these successes are now rich, people, and resources.

The bear market in the market between 2018 and 2019 has made these projects with people, money and resources fall into slag. At the beginning of 2019, when Bitcoin fell to 3,000 US dollars, there was no slag left in the market for good projects. Then from March to May, most of the coins ushered in a strong rise. By May, BTC had risen strongly and compared all of these projects.

The end result is that these people, who have money, resources, and consensus, are looking at projects that solve big problems in the blockchain. The valuation in the secondary market is already very low. So, why do you have to go to the primary market to buy some repackaging of the original problem, no money (otherwise to finance), not necessarily, no resources, what?

The first-tier market ushered in 2016, thanks to the maturity of the Ethereum ERC20 token agreement. Ethereum is a well-established financing platform, which is the infrastructure of the primary market in the currency circle. A well-developed financing infrastructure has brought tremendous vitality to the entire currency, although most of them are deceptive projects. But until now, there has been no new change in the financing infrastructure of the currency circle, or ERC20. Intermediate tools such as the exchange's IEO did not bring more infrastructure.

A more complete infrastructure has two evaluation criteria: low transaction friction and high information transparency.

Although the ICO of Ethereum will bring a lot of scammers, it may be the price that the market must pay. We don't care about this first. But IEO, such a platform, is essentially improving transaction friction. After all, the exchange is going to make money. Regardless of whether the current exchanges describe the IEO as an angel, it is always costly for the users. ICO, such as Ethereum's smart contract, has done a very good job in information transparency, how much money has been fused, and how many tokens have been issued. It is completely clear.

Up to now, there has not been a better financing infrastructure, which is one of the reasons why I think the primary market opportunity is too small.

What are the preconditions for the next wave of the first-tier market climax in the currency circle? It is very likely that when there is a real user demand, it will easily become a pure speculation concept, and the opportunity to tell stories may become less and less likely.

In addition, when the basic design of the hair chain is perfect, such as cosmos sdk, Polkadot's Substrate, etc. become truly close to the people, it is equivalent to a new financing infrastructure.

There is also a decentralized exchange. If the decentralized exchange is perfect in terms of usability and ease of use in the future, it is a perfect financing infrastructure, and the primary market will change to the secondary market.

At that time, there may be a big speculation in the primary market. How many years does this take?

Author: Huang Shiliang

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