Is the ecological airdrop season coming? With the mainnet launched for more than two years, can DFINITY return to its peak?

Is the airdrop season coming for DFINITY's ecological development? Can DFINITY return to its previous peak after more than two years since the mainnet launch?

Author: Baize Research Institute

Do you remember the former king project DFINITY?

In May 2018, 50,000 registered participants received ICP token airdrops.

In August 2018, DFINITY raised $102 million from a16z, Polychain Capital, KR1, Amino Capital, and other crypto venture capitalists, forming an all-star team of over 215 members, most of whom are world-class cryptography technology, academic, and leadership talents.

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In May 2021, the highly anticipated Internet Computer (IC), developed and maintained by the DFINITY Foundation, was officially launched on the mainnet.

DFINITY attracted investors, application developers, and communities during the early stages of development, thanks to founder Dominic Williams’ visionary concept of a decentralized “world computer” – a public chain that can build fully on-chain DApps without using centralized cloud services like AWS, a public chain capable of supporting countless high-performance DApps, and a infinitely scalable decentralized cloud computing platform.

Co-founder of Ethereum, Vitalik Buterin, has mentioned DFINITY on several important occasions. During the recent EDCON 2023 conference, Vitalik referred to the IC network developed by DFINITY as a sister network to Ethereum, rather than a competitive relationship.

However, all of this has disappeared in just a few months, from “king” to “fallen”, due to the fall in the price of ICP tokens, criticism of the network system from the community, the development of multi-chain narratives, and the recent Ethereum L2 craze. From the initial hype and heated discussions to the silence of the Chinese crypto community on DFINITY and ICP. It has become one of the representative projects that “peaked upon debut” along with other star projects (Chia, Filcoin, etc.) during the same period.

Now, two years after the launch of the IC mainnet, how has the technology development and ecosystem performance been? In this article, I will introduce the development process of the IC network over the past two years from three aspects: ICP 1.0, ICP 2.0, and the ecosystem airdrop season. (Note: 1.0, 2.0 are unofficial definitions)

ICP 1.0: Perfecting the underlying infrastructure, expanding the network through on-chain governance

NNS: On-chain governance system built into IC

Since the launch of the IC network in May 2021, there have been more than 140 upgrades, an incredible number.

All of this is made possible by the on-chain governance system designed for the ICP token – the Network Nervous System (NNS).

Every ICP holder can become a neuron by locking their ICP and participate in the NNS, and will receive system rewards for participating in governance. This is similar to the “staking mining” model, where participants lock their own ICP to obtain voting rights and corresponding rewards based on the amount and duration of staking. The longest staking duration is 8 years, which is the origin of the largest community of 8yeargang (8-year party) in the ICP community. It is a DAO composed of a group of loyal ICP fans who accompany the growth of the IC network.

The proposals of NNS cover almost every aspect of the IC network, including modifying system parameters and rules, optimizing and upgrading the system, freezing and unfreezing accounts, adding or reducing subnets, and approving nodes, etc. When a proposal is approved, the IC network will automatically upgrade according to the parameters in the proposal.

In other words, NNS represents the voice of the ICP community, and the IC network upgrades accordingly based on the community’s voice.

However, due to the fact that any neuron can initiate a proposal, there are indeed a large number of spam proposals in NNS, and neurons that support the passage of spam proposals can earn more token rewards by actively participating in governance voting. Although the development team has proposed modifications several times, this issue has not been effectively resolved to date.

Currently, approximately 1.4 billion US dollars’ worth of ICP has been staked on NNS, enough to make the IC network one of the highest TVL public chain ecosystems.

Infinite Subnets: Narrating the “World Computer” behind the IC network

As of the writing of this article, the TPS of the IC network is approximately 5200 transactions per second, which is an astonishing number. But its upper limit is infinite.

Ethereum is currently focused on transitioning to sharding, but the IC network has had its own sharding solution since its launch, namely subnets. Subnets are a special type of blockchain in the IC network that can seamlessly integrate with other subnets and expand the capacity of the entire IC network by adding subnets.

If the IC network needs more computing power and storage resources, through community regulation via NNS proposals, the system will combine nodes to create new subnets. Subnets interact with each other through ChainKey technology, so regardless of whether they are smart contracts within the same subnet or not, they can communicate directly.

Currently, the IC network has 40 subnets, and this number will continue to increase in the future as the IC network is further adopted and developed to meet growing capacity demands.

Although it has a powerful technical architecture and has paved the way for DApps with a very strong technical foundation, unfortunately, due to the manipulation of the ICP price by SBF, the founder of FTX, after its listing, many investors and developers have lost confidence in the IC network, which has dealt a double blow to the token price and ecosystem. The year 2022 has brought bankruptcy, collapse, and bear market panic. Fortunately, the early applications of the IC ecosystem silently persevered, and the community struggled through this year amidst bullish and bearish arguments.

ICP 2.0: Technological Expansion, Ecological Takeoff

Looking at the entire Web3 ecosystem, it is rare to see a public chain like DFINITY that “enjoys itself in its own world and goes with the flow in other people’s worlds.”

In the Web3 industry, there are numerous projects that abscond with funds, especially during a bear market with limited funds, shrinking profits, and community criticism. To determine whether a team is likely to abscond, it is necessary to see if they are earnestly working amidst community mockery and attacks, continuously developing products; or if they gradually disappear and lie low. Some projects, in order to survive, are willing to abandon their original vision and chase after hot trends.

On Twitter, community members often propose to founder Dom to take a different path, for example, whether to vigorously promote IC NFTs following the NFT craze. Only by continuously attracting new users to the IC ecosystem can the token price and struggling ecosystem be revitalized.

Clearly, DFINITY must continue to follow its own path, a path that must be walked for twenty years. Dom, in the article “Announcing the ‘Mainnet’ and the 20-Year Roadmap for the Internet Computer,” revealed DFINITY’s long-term development path. This path is not about “killing ETH,” nor about becoming No. 1 in the crypto and blockchain industry, but…

5 years later (2026): More and more Web2 traditional entrepreneurs and development teams are developing products on the IC network, making it easier to raise funds for DAO governance.

10 years later (2031): Become the “open internet” of the technology industry, truly Web3.

20 years later (2041): Become a bigger “open internet” than Web2, extending into the lives of every individual.

Two years after the launch of the mainnet, DFINITY continues to explore multiple key technological areas, making efforts to achieve this roadmap.

ckTokens: Advancing into the multi-chain ecosystem

In August 2022, the DFINITY Foundation announced the successful integration of the IC network with the Bitcoin network. Simply put, each subnet and smart contract in the IC network can use threshold ECDSA signatures to receive, store, and send real Bitcoin on the Bitcoin blockchain. (Not a cross-chain bridge, all transactions using this method are broadcasted on the Bitcoin blockchain)

To facilitate the circulation and application of Bitcoin in the IC network, based on this technology, the development team has launched ckBTC, a Bitcoin-pegged token similar to WBTC, managed by the ckBTC smart contract (issuance, redemption). Users can mint ckBTC by sending real BTC to this smart contract, and conversely, the smart contract will pay BTC to the user’s Bitcoin wallet when ckBTC is sent to the smart contract.

In other words, transactions are settled on the Bitcoin network only when users transfer BTC into the IC network and ckBTC out of it. Therefore, users do not suffer from the drawbacks of slow transaction speeds and high fees in the Bitcoin network when using ckBTC in the IC network.

In fact, there are already quite a few Bitcoin-pegged tokens in the entire Web3 ecosystem, but ckBTC’s advantages allow it to stand out:

– ckBTC has sufficient collateral, and users can even check the amount of collateral at any time during the transaction.

– ckBTC is completely decentralized and directly managed by the governance system NNS.

– KYT (Know Your Transaction) is enabled to shield black bitcoins, making it more secure and compliant.

Currently, the total amount of ckBTC on the IC network has reached 47, with a value of about $1.2 million.

Inspired by ckBTC, DFINITY plans to build a “ckTokens” ecosystem in the future, integrating with more public chains through non-cross-chain bridge integration. It is expected that the IC network will become a “hub” for future multi-chain ecosystems. The direct integration with Ethereum and the development of ckETH have been put on the agenda.

SNS: DAO LaunchLianGuaid of the ecological project

SNS, which is referred to as the “fist product” of the IC network along with NNS, was officially launched this year.

NNS and SNS are both core governance infrastructures of the IC network. NNS is responsible for the governance system of the entire IC network, while SNS is a “one-stop” governance system specifically designed for ecological DApps, promoting their development in open governance, tokenization, transparency, and other aspects.

Each DApp in the IC network can use SNS to quickly issue tokens and enable open governance. It generally requires 5 steps:

– Set SNS parameters

– Transfer control of the DApp

– Submit a proposal to NNS (whether to activate SNS and how much ICP needs to be raised)

– NNS approves and starts decentralized token sales.

– If the sales target is met, the DAO is successfully launched, and future upgrade proposals for the DApp will be published in the SNS project DAO. If the sales target is not met, it fails, and control is returned to the project party.

Users can participate in the decentralized token sales of DApps through the “LaunchLianGuaid” function of NNS, directly using ICP for payment.

Currently, 5 projects have successfully become DAOs through SNS, namely the decentralized chat application OpenChat, the decentralized short video platform Hot or Not, the decentralized search engine Kinic, the first meme coin on the IC network ICGhost, and the Web3 game Dragginz. There are 3 platforms currently under proposal, namely the decentralized community management platform Catalyze, the decentralized game platform Boom DAO, and the AI computing power trading platform EMC.

Airdrop Season: Can the IC ecosystem explode?

If you have been following the ecosystem since the launch of the IC mainnet, you may have noticed that due to the lack of unified token standards, the development of DeFi has been relatively slow. The more intuitive feeling is that most early-stage ecological projects are mainly SocialFi, many of which benchmark against Web2 platform giants.

In fact, the design of the IC network is naturally suitable for DApps that require high performance, such as SocialFi and games. On most mainstream public chains, all operations involving on-chain interactions (contract function calls) require a certain amount of gas fees, and the cost of interactions is influenced by the price of native tokens in the secondary market. In addition, in case of network congestion, the cost of interactions will also increase accordingly.

IC Network implements a “reverse Gas” model, which, as the name suggests, is the opposite of the traditional blockchain Gas model mechanism. As users, we do not need to pay any Gas fees when interacting with the chain, but rather, the developers prepay the interaction Gas in the smart contract. This is somewhat similar to the mechanism of the traditional internet, where developers bear the operational maintenance and hosting costs of the application platform.

This greatly improves usability. Compared to Ethereum, where users have to buy ETH from exchanges and then withdraw it to their wallets in order to use DeFi and NFT applications on ETH, this threshold directly blocks most potential users. On the IC network, developers provide Gas for running DApps’ smart contracts, and users only need to enjoy the service. In this way, users can easily use DApps, even without knowing that the application runs on a blockchain.

Currently, most of the early applications in the IC ecosystem have been officially launched, and some are already preparing for SNS token sales, resulting in many airdrop expectations. Moreover, attracted by the ability of SNS to launch DAO with one click, more and more projects are starting to build on the IC network.

(Due to space limitations, the following text only lists some popular DApps on the IC network. For more DApps, please refer to the list I have compiled: http://reurl.cc/QXkNK9)

1. DeFi

Infinity Swap

A well-established IC DeFi platform.

Notable investors include PolyChain and a16z. It has clear plans for interactive airdrops and SNS token issuance.

Bitfinity

An Ethereum L2 (IC EVM layer) launched by Infinity Swap, aiming to connect IC with Ethereum.

Currently in the testnet phase, official products include wallets, cross-chain bridges, and block explorers. It is attracting more projects to build on it. When the mainnet is officially launched, it may trigger a wave in the IC community, and the issuance of SNS tokens is worth paying attention to.

ICDex

An early DEX on the IC network, with slightly better liquidity and support for more tokens.

Active on Twitter, with a large following. Official products also include IC Swap. It is currently transitioning to multi-chain asset DeFi (token cross-chain). On ICDex, you can participate in trading mining to earn ICL token rewards, which can be traded on ICP Swap.

ICP Swap

A well-established DeFi platform on the IC network, with functions including token exchange, liquidity mining, NFT market, and governance. It is planning to launch a chat function.

The token is clearly confirmed as ICS, with a total supply of 1 billion. It is expected to be issued on SNS in the second half of this year and become a DAO. There are expected to be interactive airdrops.

Sonic

A rising force in the IC ecosystem DeFi, with functions including token exchange, liquidity mining, and LBP (token issuance through liquidity bootstrapping pools).

According to the co-founder, the liquidity mining feature will be launched soon, and all liquidity pool creators will receive token airdrops.

Funded

IC version of Gitcoin. Projects and communities can raise funds on this platform and provide donors with NFTs with customized reward benefits, such as project token airdrops, discounts during token sales, etc. NFTs can be traded on this platform. So far, many popular projects on IC have launched crowdfunding campaigns on this platform, including HOT or NOT and Catalyze.

Users can receive rewards by donating to promising new projects. For example, Catalyze, which is currently conducting decentralized token sales on SNS, will airdrop tokens to NFT holders who donate on Funded.

2. SocialFi

Openchat

One of the earliest social applications on IC, the IC version of Telegram. It supports creating group chats, sending emojis, sending red envelopes (ICP, ckBTC), etc. Voice and video chat functions will be launched in the future. Each regular user has 0.1GB of free storage space for messages, and diamond members have unlimited storage.

OC tokens have been issued through SNS. Currently, by upgrading to Diamond membership on Openchat, users can obtain invitation links and invite friends to register and receive CHAT token rewards. In addition, later this year, Openchat will launch a reputation system (through DAO proposals), where chatting can make money, but it will focus on reviewing robot spam messages.

DSCVR

One of the earliest social applications on IC, the IC version of Reddit. It supports posting, liking, commenting, rewarding, creating and joining topic portals, and other functions. The latest version also launched a web mini-game platform, where developers can submit and upload their own mini-games. Polychain invested $9 million in DSCVR.

As an early IC project, it has not issued tokens on SNS yet, but if the project issues tokens, it is highly likely to airdrop them, because the platform has conducted large-scale airdrops of SNS-1 tokens before. Therefore, interested users can interact more without much cost. In addition, DSCVR often holds joint events with other projects, with prizes available, so users can participate more.

Distrikt

One of the earliest social applications on IC, the IC version of Twitter. It supports posting, liking, commenting, and using hashtags.

According to the roadmap, the project will issue tokens on SNS in the fourth quarter of this year. There may be airdrops, so users can interact more.

Hot or Not

IC version of Douyin (TikTok). It brings the short video Douyin mode to IC and uses Web3’s unique token economy to motivate passive users.

Recently, the project completed its token distribution plan on SNS. It is currently conducting airdrop collection activities. If users register for the project before July 15, 2023, they can receive HOT+COYN airdrops. In addition, as a Web3 project, Hot or Not is committed to earning money by watching videos, so interested users can interact more. In the future, it may launch token airdrops based on rankings or behavioral activities.

Catalyze

Catalyze is a community governance platform where creators can join, create their own groups, and interact with their fans. They can also create NFTs for unlocking online or offline activities.

At the time of writing this article, Catalyze is conducting a decentralized token sale on SNS. In addition, the official roadmap shows that there are airdrop plans, and early participants/official NFT holders should pay attention to when the airdrop will take place.

Seers

More like an IC version of Twitter than Distrikt, but with fewer active users.

Currently, Seers only has a “post and earn” activity, rewarding ICP tokens based on the activity of users’ posts each week. The rewards are minimal. Additionally, to prevent bots, users must stake 1 ICP at registration, inhibiting user adoption. However, one good point is that Seers also plans to issue tokens on SNS and become a DAO.

Dmail

The first decentralized Web3 email service, offering features such as communication, domain names, asset transfers, NFT avatars, subscriptions, and notifications. Notable investors include Hashkey, Kucoin, and BiXin. In addition to the IC network, Dmail has integrated with other networks, including Starknet, Sei, ETH, and Solana.

Recently, Dmail collaborated with Worldcoin and completed a Pre-A round of financing. It actively cooperates with other wallet projects (accelerating adoption) and currently has over 550,000 registered domain name accounts and more than 300,000 individual addresses, showing great potential. Currently, Dmail is implementing a points system and is expected to have airdrops in the future.

3. Games/NFT/Metaverse

Plethora

An IC version of “Egg Party.” Completing daily tasks gives players a chance to win NFTs from official game partners.

IC1101

One of the early-stage projects in the IC ecosystem, a metaverse platform built on the IC network.

Currently in the testing phase, IC1101 has outstanding visual quality and strong technical capabilities. It has been selected for the Future3 incubator program supported by Hashkey. However, the development team’s marketing efforts have been somewhat unsatisfactory.

BoomDAO

BoomDAO’s flagship product is a decentralized game launcher that integrates many IC-based game projects. Users can link their wallets with one click and play different games. Game developers can quickly upload games, issue tokens or NFTs. Additionally, BoomDAO is committed to developing game-friendly tools such as a universal game engine.

They plan to issue tokens via SNS in August and have confirmed airdrops. Users can quickly join the community on the official website to catch the airdrop opportunity.

Yumi

The most popular NFT trading marketplace on the IC network, at the forefront of the IC NFT field.

Conclusion

The author highly agrees with Herbert, the Asia Pacific General Manager of DFINITY, as mentioned in the interview “ICP Responds to Doubts, Enters Hong Kong, IC Ecosystem Sets Sail.” “The narrative of financial investment has become exhausted, and the market will eventually return to its essence, focusing on the underlying infrastructure services of the Internet. DFINITY has chosen the most difficult and even lonely path because we believe it is the only path that can be sustained and is worth pursuing. Once this muddy path is walked, it will become wider and smoother.”

DFINITY has indeed accomplished many great things, such as the very original token economics, the reverse gas model, and the on-chain democratic governance of NNS.

However, DFINITY has also made bad choices, such as establishing a long-term stable governance system by incentivizing neuron lockup for 8 years, which has resulted in permanent “oligopoly politics”.

Nevertheless, it is commendable that from ICP 1.0 to 2.0, DFINITY has always adhered to the original vision, a public chain that can build fully on-chain DApps without the need for centralized cloud services like AWS, a public chain that can support countless high-performance DApps. In the continuous development of the development team, it is believed that DFINITY will get closer and closer to its 20-year roadmap.

Early-stage ecosystem projects have also grown into solid “Web2 killers” through silent cultivation. With the arrival of the ecological airdrop season, can DFINITY, or rather the IC network, return to its peak? We wait and see.

Risk Warning:

The above projects and opinions should not be construed as investment advice, DYOR. According to the Notice on Further Preventing and Handling the Risks of Virtual Currency Trading Speculation issued by the central bank and other departments, the content of this article is only for information sharing and does not promote or endorse any business or investment activities. Readers are strictly required to comply with local laws and regulations and not participate in any illegal financial activities.

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