Everyone wants to be a prophet of the industry. At the beginning of 2019, the price of bitcoin hovered around $ 3,500, and the market no longer mourned. Instead, it was silent. Whether it is WeChat group, Twitter, or the project community's official community, few people have spoken and ridiculed, and everyone seems to have lost enthusiasm for blockchain and cryptocurrency.
Under winter, there are still many investors and institutions that have long been optimistic about the blockchain industry and have made their own predictions for future development.
BlockBeats has translated 11 predictions made by cryptocurrency investment fund Outlier Ventures on the blockchain industry at the beginning of the year. Seeing that 2019 is coming to an end, let us review how many of these predictions are correct and wrong? At the same time, what industry trends may be next year?
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The following is a summary of the "Prophecy" translation by Outlier Ventures, a summary of the status quo, and an outlook:
Trend 1: Killing Crypto. Crypto-only funds will die. More and more money will be invested in strategic and professional investors, enabling them to compete in a wide range of emerging technologies. Prediction: By the end of 2019, there will be fewer than 50 VC funds with assets under management of more than 30 million U.S. dollars, and they will call themselves "cryptocurrency funds."
Reality: Not the case.
According to data from PwC's Q3 2019 cryptocurrency fund report and Crypto Fund Research research institutions cited in the report, there are currently 166 cryptocurrency funds with asset management scales (AuM) above $ 50 million, far exceeding the previous The pessimistic expectations show that even in the poor market in 2019, capital has not given up on the exploration of blockchain and cryptocurrencies.
A more convincing data is that the total AuM of global cryptocurrency funds will continue to rise to nearly US $ 20 billion in 2019, a year-on-year increase of 129%, while the performance of the secondary market during the same period is far less than that of the primary market, and the price of bitcoin rose year-on-year. 97%, the price of Ethereum rose only 42%, the price of altcoins with small market capitalization generally did not increase significantly, and even fell compared with the same period last year.
Although nearly 70 crypto hedge funds have closed down this year, at the same time, 140 new funds have been established and issued products. In general, the cryptocurrency fund industry is still on the rise and there is room for continued rise, because all cryptocurrency funds That adds up to less than 1% of the total assets of hedge funds.
It is worth mentioning that in the forecast at the beginning of the year, one point was accurate, that is, the trend of cryptocurrency funds to focus on the head. As of the current statistics, more than 60% of cryptocurrency funds AuM are below $ 10 million, and a large amount of funds are being controlled by front-line oligarchs.
BlockBeats predicts that in 2020, cryptocurrency funds will continue to consolidate the "overall growth, head-gathering" trend. The speculation boom of the blockchain is gradually dissipating, people are taking it against me, and money that is optimistic about long-term value is waiting for opportunity.
Trend 2: DeFi / Open Finance Narrative Falls Short. DeFi became one of the most enticing "stories" in the US blockchain field at the beginning of the year, but in fact, in addition to in-depth users in the circle, various new products of DeFi cannot be made in the short term. Let the public understand and use it. Perhaps DeFi is more attractive in the African market.
Prediction: DeFi will lead in terms of on-chain transaction volume, but in 2019, Western DeFi for consumers and institutions will not exceed 10 million users.
Actual situation: Basically correct.
In fact, no report can give "how many DeFi users in the West", after all, the address information on the blockchain and personal information in reality are not a one-to-one mapping relationship. However, we can still peep through some DeFi data pipes.
According to DAppTotal statistics, the current global DeFi daily life is about 83,000, and the weekly life is about 250,000. It must be known that the real data on the chain will only be lower than this and will not be higher than this, so "the number of DeFi users in the West in 2019 will not exceed 10 million" is basically established. In addition, DeFi's on-chain transactions and transaction amounts have increased compared to last year. until now. DeFi has locked in more than $ 900 million worth of crypto assets.
In addition, according to statistics from DeFi Pulse, the number of Ethereum locked positions on DeFi's preferred platform has reached 4.5 million, which means that approximately every 24 ETH is locked in DeFi.
BlockBeats found that with the increasing popularity of DeFi, more emerging public chains have begun to attack DeFi, such as the top PoS public chain Algorand, the mobile financial platform Celo, and the cross-chain infrastructure Cosmos.
BlockBeats predicts that the DeFi field will develop at a faster rate in 2020, but it is limited to user education and threshold issues. Unless there is a killer application (probability) driven by policies, DeFi has no way to attract more traditional finance. Investors, the overall scale is difficult to exceed 10 billion US dollars.
In addition, before the on-chain identity system is perfect, the essence of DeFi must be to sacrifice capital efficiency in exchange for free flow without access.Therefore, the development of DeFi stems from the exchange and liquidity requirements of native crypto assets, and has strong anti-censorship Demand scenarios, so the growth point of DeFi in 2020 comes from the conversion of deep users in the circle and the entry of gray industries such as hacking.
Trend 3: The infrastructure of Security Tokens. "STO Securities Token Issuance" is under construction and no real market has been formed yet. Due to higher regulatory hurdles and costs, we expect to see companies such as Harbour, Abacus and Republic build a complete set of integrated services in issuance and trading. Hope to hear more about "STO for Coinbase" before the end of the year.
Forecast: The daily circulation of STO in 2019 will not exceed 50 million U.S. dollars.
Actual situation: Basically correct
Although there is no accurate STO daily transaction volume data, combined with the ICO financing report released by PricewaterhouseCoopers Q2 and the latest research report released by STO research institution Blockstate, the average daily STO transaction volume is about USD 7.2 million, which is in line with previous forecasts. This year, the largest publicly disclosed STO case in the world is financial company Proxima Media, which successfully raised up to $ 100 million in the private placement round with the help of STO.
STO is a financing method combining cryptocurrencies and traditional securities in the blockchain. Embracing supervision is the basis for the mainstream of the cryptocurrency world. STO has also been hailed by many insiders as a new flashpoint. Another person believes that the nature of blockchain and cryptocurrencies does not require access and trust, and the STO issuance method is a retrogression.
In any case, the development of STO in 2019 can be summarized in the following five points: increasing projects, unchanged amounts, rapid development in the West, the rise of integrated services, and Ethereum.
According to Blockstate statistics, the number of companies using STO to raise funds continues to increase, from 35 in 2018 to 55 in 2019, but the overall amount of funds raised has not changed. Of these, 90% of STO companies are in the United States, Switzerland, and the United Kingdom.
Interestingly, Ethereum still dominates STO, with a market share of 94%. BlockBeats is also expecting more STO publishing platforms to stand out, such as Tezos, Polymath, Dusk, etc.
Trend 4: On-chain governance. As the risks of high-risk and slow decision-making technology of "on-chain governance" are exposed, people's interest in this issue will decrease. Attracting a wide range of network participants to govern the network is a lofty ideal, but there are many difficulties in achieving it. Under the guidance of venture capital, 2019 will be a year of off-chain governance.
Forecast: By the end of 2019, there is no on-chain governance agreement among the top 25 in terms of market capitalization.
Actual situation: Basically correct
As of the beginning of December 2019, according to Coinmarketcap statistics, there is really no on-chain governance agreement in the top 25 blockchain projects with market capitalization, and 60% are public chain or payment cryptocurrencies. However, MakerDAO, the largest open financial platform, ranks 21st in the world with a market value of 500 million US dollars. Although MakerDAO also has a part of MKR holders voting for governance, it is not a pure on-chain governance agreement. More is Attract traffic in the DeFi realm.
At the same time, the most well-known on-chain governance project, Aragon, has a circulating market value of $ 16.7 million, ranking only 160. Ethereum financing project MolochDAO, marketing project MarketDAO, etc. have not issued their own tokens. Similarly, in 2019, everyone's discussion on on-chain governance is still enthusiastic, especially in the domestic market. However, Tezos, which focuses on governance and STO concepts on the chain, was sought after by capital in 2019, outperforming Bitcoin by 67% throughout the year, and became the star PoS public chain this year.
BlockBeats predicts that the debate on on-chain governance will increase slightly in 2020, but it is still mainly confined to the West, and the overall market participation will not be higher than DeFi. The debate on on-chain and off-chain governance in the blockchain field will not be conclusive in the short term.
Trend 5: Mo data, mo (real world) problems. More useless data appears, and protocols related to data processing and artificial intelligence will appear.
Prediction: At the end of 2019, there will be blockchain projects in the data market agreement category that will enter the top 10 in market capitalization.
Fact: completely wrong
There are indeed many projects related to data processing and artificial intelligence protocols in the market.The Ocean Protocol, which has sold tokens on CoinList and Bittrex, is a model of this. However, such projects have not been sought after by the market. Instead, they are generally poorly valued areas in the current blockchain investment market. According to Coinmarketcap data, OCEAN tokens are still in the state of Bittrex IEO breakout, with a market value of $ 9.3 million. Ranked 300 worldwide.
The reason is that the current blockchain data market and AI projects still do not solve the problems of high data feeding costs and difficult acquisition. The effective proof of work and node incentive system have not been tested in practice, but have increased their own and traditional centralized data Difficulty of competition.
Interestingly, on CoinList's official website, BlockBeats found that the investors of Ocean Protocol happened to include Outlier Ventures, and it is not difficult to resolve the fund's position and views.
Trend 6: Beyond wallets. With Coinbase, Circle and even Revolut providing customers with Staking accounts, Staking business is starting to become a service. Wallets are the traffic entry point for the cryptocurrency world, and a bear market will drive more and more practitioners to set out in this area. In 2019, we expect that there will be more "available" assets in the NFT (non-homogeneous tokens) category. Assets that can generate income will gradually enter the public eye, and will trigger discussions on the "except speculative" token economy.
Prediction: Coinbase, Circle or Revolut directly support staking or similar asset-generating functions in the wallet.
Reality: Half correct.
Support for cryptocurrency transfers, NFT transactions, DEX, and integration of DeFi and Staking services through a browser seems to be standard on the wallet. Coinbase Custody has extended the Tezos (XTZ) node commission pledge service from institutional customers to users across the United States, and Binance's Trust Wallet directly supports one-click Staking of some PoS assets.
Rather than say that the assets supported by wallets are more diverse, the competition landscape of blockchain wallets is changing. Earlier Bitpie, ImToken, etc. mostly depended on the rise of a certain currency (such as BTC, ETH / ERC20), which brought huge demand for asset storage and transfer, which gradually precipitated users and developed. The blockchain wallet competition after 2018 has begun to focus on the integration of various services, such as DEX, DeFi, and DAO.
At the same time, the new batch of wallets is facing greater competition pressure, because the exchanges, as a better traffic inlet, have successfully established a brand and a reputation after attracting wallets.
BlockBeats predicts that the overall number of blockchain wallets will gradually decrease in 2020, showing an oligopoly development. The wallet will focus on the development of UI / UX and new user education, and functions such as staking business, explosive DeFi, and DAO governance will become more popular.
Trend 7: Crossing the chasm with Web 2.5 not Web 3.0. The blockchain industry has put forward a vision of highly distributed and automated Web 3.0 over the past few years and is ambitious about it. However, with the exception of a few scenes, the public touts it too aggressively, which is a bit exaggerated. In 2019, we will see more pragmatism that makes decentralization of the Internet possible.
Forecast: This is a difficult forecast to quantify. In layman's terms, 2019 will cross Web 2.5 instead of Web 3.0.
Actual situation: Overestimated.
Compared to crossing Web 2.5, the more realistic situation is that the public still has not left the Web 2 world, traditional Internet companies still rule this world, the Web 3 stack is still in the ascendant, and Block stack with id identity system and development rewards has attracted many applications. Programs, such as decentralized graphite, Office software, but users are still confined to the circle, technical people, and large-scale applications are still far away.
Trend 8: The interoperability story. 2019 will shift from traditional virtual machine architecture to development standards like WebAssembly (WASM).
Prediction: The first phase of Ethereum 2.0 is compiled using WASM, and there will be 3 top 10 projects with market capitalization compiled by WASM by the end of 2019.
Reality: Not the case
WASM enables developers to write smart contracts in a variety of languages, including C / C ++, Go, Rust, and Typescript, as well as high-performance code that allows detrust to run in the browser, which will make the blockchain more internally accessible. Operate, improve performance, and possibly enable users to run nodes in a browser. However, Outlier Ventures seems overly optimistic about the speed of WASM adoption. According to Coinmarketcap's market capitalization ranking, only EOS in the top ten uses WASM, and the second phase of Ethereum 2.0 will introduce a new virtual machine eWASM.
Trend 9: Enterprise adoption needs enterprise chains. In 2019, we will see some emerging blockchains provide convincing advice to companies with specific use case needs. Enterprise adoption requires an enterprise chain, and blockchain-as-a-service (Baas) providers like Interstellar, Kaleido, and Amazon's QLDB will come in handy.
Prediction: By the end of 2019, a BaaS market with a scale of USD 1 billion in revenue will be generated.
Actual situation: Not as expected.
Business data analyst Research and Markets released the "BaaS Global Market Analysis and Forecast 2016-2025" in October this year. The report shows that in the end of 2019, there will be approximately $ 750 million in BaaS market revenue, compared with 2018. Only $ 360 million. So even though the billion-dollar estimate at the beginning of the year was less than expected, it can't eliminate the fact that the BaaS market is developing at a high speed. At the same time, the report states that the BaaS market is expected to continue to grow at a compound annual growth rate of 48% in the future.
On the other hand, enterprise blockchains and alliance chains are becoming more and more popular. Traditional Internet and financial companies such as Microsoft, IBM, J.P. Morgan, and Samsung have been laying out in the field of blockchain, exploring enterprise blockchain technology solutions and the application of blockchain technology in reality.
Take Dmorr's enterprise chain platform Quorum as an example, it has currently attracted about 220 banks to join the information network, and completed integration with Microsoft Azure this year. The news that JPM Coin is preparing for issuance also excited the market at the beginning of the year. At the same time, outside of the underlying construction of the enterprise chain, the development team is considering adding more features, such as Zether-a privacy protocol compatible with smart contract platforms such as Ethereum, in order to provide better data and identity privacy protection for Quorum users.
Block Beats has organized the following world-renowned enterprise blockchain solutions.
(Block Beats Note: Data are taken from IARIA, "Consortium Blockchains: Overview, Applications and Challenges")
BlockBeats predicts that in 2020, enterprise blockchain will continue to flourish, and the use of blockchain for clearing and settlement and cross-border payments between banks and brokers will continue to increase. In China, the alliance chain that meets regulatory requirements is the mainstream of current blockchain technology development.
Trend 10: Bluechip emerges. Venture capital gradually begins to spread to the later stage of equity financing of blockchain projects. In Q4 2018, 147 investment and financing transactions raised more than US $ 550 million, but about 70% of them came from 20 transactions. A new trend is that capital is beginning to flow into companies that have proven to have new attractiveness and market fit. Some of the best are merging with capital.
Forecast: By the end of 2019, the total private equity valuation of the top five crypto "blue chip" companies is $ 25 billion.
Actual situation: Yes.
With the gradual maturity of the blockchain industry and the cryptocurrency industry chain, the valuation of the top ten "blue chip" companies has exceeded $ 50 billion. Starting from a traditional broker, Robinhood, which has expanded into the cryptocurrency trading business, completed a $ 323 million financing tonight with a valuation of $ 7.6 billion. And the world's leading mining machine manufacturer Jia Nan Technology also successfully listed on the NASDAQ IPO.
(Block Beats Note: Data are taken from the Hurun Global Unicorn List 2019, The Block, Crunchbase)
The blockchain and cryptocurrency industries are moving from disorder to order.Before 2017, no effective barriers have been formed between the internal segments of exchanges, miners, and service providers. Invest in hot money to tap more new projects. Outside of 2019, the industrial chain structure is gradually solidifying, and investment funds tend to invest large sums of money into unicorn companies, with a small amount of money rising after the game, balancing returns and risks.
Trend 11: Year of the BATs FAANG. Blue chip companies in the US and Asia will increasingly adopt blockchain technology.
Prediction: 1 billion new users enter the encrypted world via Whatsapp, Facebook Messenger or WeChat.
Actual situation: No substantial progress.
In 2019, there is still no killer application on the blockchain, and the goal of 1 billion users is still far away. FaceBook's proposed Libra caused a stir in 2019, so many people began to face blockchain and cryptocurrency squarely. However, U.S. regulatory authorities' concerns about Libra's collateral, money laundering, and privacy data protection have shown the difficulty of implementing cryptocurrencies in the real world.
After combing through these 11 predictions, it is not difficult to find that all the predictions related to the actual application of the blockchain and the size of users are basically inaccurate or overly optimistic, and Outlier Ventures ’predictions about the development of the capital market are more accurate. .
The deep reason is that in the early days of emerging industries, financial development was always faster than the entity, and everyone's expectations for the future pushed up valuations.
The penetration of products is always gradual and slow, and the response of the capital market will be more acute, even closer to one step.
In 2020 we look forward to the blockchain being able to walk into the homes of ordinary people.