5 narratives and trends in cryptocurrency inventory

5 trends in cryptocurrency

Cryptocurrency is all about narratives and trends, following the right trend can lead to success. Cryptocurrency researcher Louround lists 6 sustainable narratives and trends, including scaling solutions, LSD, Omnichain, real yields, real-world assets, and tokenization.

1) Scalability Solution: In order to attract the next billion users, we need an infrastructure that allows for decentralized, cheap, and fast transactions. A scalability solution built on top of Ethereum would bring enormous value. Optimistic rollups have been the preferred solution, however, the recent Arbitrum airdrop has exposed the weakness of chains handling large txs, and the inability to submit fraud proofs makes current optimistic rollups very concerning. If ZK rollups can successfully decentralize their sequencer, they may have an advantage in the market. Therefore, I am focused on the ecosystem development of major zkEVM rollups and modular optimistic rollups.

2) Capital Efficiency of LSD: Compared to traditional markets, the crypto industry still has a long way to go in terms of pricing and asset categories. Currently, many capital resources are being inefficiently used or locked up, which affects their own development. Liquidity staking derivatives are one of the solutions, with various ways to “recycle” capital for protecting PoS chains (Eth, Matic, etc.) or LP positions, so that users can use their capital to earn additional income, and capital can be rotated and used in different protocols, benefiting both projects and users.

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3) Omnichain Unified Liquidity: Over the past few years, L2 and blockchain solutions have led to liquidity fragmentation. The more fragmented the liquidity, the harder it is for users and builders to navigate. This often leads to unsustainable token issuance to attract users and higher venture capital, and results in higher centralization. Therefore, projects built on the Omnichain narrative will allow users to better navigate between chains, provide seamless experiences, and make capital more accessible to protocols.

4) Real Returns: The era of founders keeping all income for themselves is long gone. The blockchain and crypto spirit are about sharing resources and incentivizing decentralization, and real returns are a way to make projects more sustainable in the long run.

5) Real-world Assets and Tokenization: It is important to connect the industry to the real world in order to make cryptocurrencies accessible to the masses. The more synergies established with the real world, the more people will understand their added value. In this sense, cryptocurrencies allow for tokenization and create a liquid form for assets (real estate, watches, etc.) that initially had no liquidity, creating real added value for newcomers.

Reference: https://twitter.com/Louround_/status/1661466676984963073

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