WOO X Research: With the arrival of the copycat season, are there any hope for these tracks?

1. Background: After the leverage cleanup, the alt season continues

On December 10, the crypto market crashed, with Bitcoin falling by 5%. Excluding Bitcoin and Ethereum’s altcoins (Total 3), they faced an even more severe drop of up to 14%.

At that time, WOO X Research published an article on this situation, characterizing the decline as "long leverage liquidation, bull market structure unchanged", and the market also showed strong resilience, Bitcoin rebounded to $100,000, and Ethereum once again challenged the $4,000 mark.

At the same time, the alt season that we are most concerned about can be judged by BTC.D. When the market fell on 12/10, BTC.D rose to 58%, and after the decline was corrected, BTC.D also dropped to 56%. It can be judged that the alt season is still established and continuing.

The logic behind the rise of altcoins is this: when external funds enter the crypto market, such as investors who have never been exposed to it, traditional financial institutions, Web 2 companies, national pension funds, etc., the first choice must be Bitcoin, and only then will some funds flow into the altcoin sector with a lower market value.

Now, except for the recently popular AI The Agent track continues to grow, and other sectors including Meme, DeFi, RWA, and L1/2 also show strong upward momentum in coin prices. The overall altcoin market seems to have a bright future.

However, some sectors seem to be forgotten by the market. Other sectors have risen sharply, but BTC ecosystem-related, NFT and GameFi are indifferent. Do these sectors still have a future? What are the recent developments? Let WOO X Research show you.

Reference: coingecko

2. BTC Ecosystem Related

The BTC ecosystem generally refers to BTCFi and related protocols and assets such as inscriptions and runes. The core narrative point is:

Liberating Bitcoin liquidity: The DeFi market is dominated by Ethereum, and Bitcoin is mostly idle. It does not pursue the efficiency of fund use. Compared with the requirements of ecological applications and transaction speed, Bitcoin ecology has a high demand forSafetyThe requirements of Bitcoin are much higher than those of other public chains. Therefore, the user profile of Bitcoin is different from that of other public chains.SafetyInstitutions and large investors with higher requirements for security hold huge amounts of Bitcoin, so they focus on long-term, stable and deterministic passive income.

From April to July this year, the protocol that triggered the Bitcoin staking boom was Merlin Chain, with a maximum total lock-up of $2.64 billion. In addition to Bitcoin, it also supports header inscriptions and NFT projects such as ORDI and RATS. However, after Merlin issued the coin, the price was not as expected, and there were many controversies at the time. Currently, the TVL of the entire chain has dropped sharply, and the market attention is no longer there. It has become clear that the EVM cross-chain mapping technology has been falsified.

Reference: DefiLlama

The relevant protocol that can be expected at present is the Bitcoin re-pledge protocol Babylon, which has completed three rounds of public financing, totaling US$96 million, and its current TVL is US$5 billion, ranking first in the Bitcoin ecosystem and 12th in the overall protocol ranking. It can be seen that the market still expects the "Bitcoin interest collection" model to operate successfully. The focus of observation is still whether Babylon can officially generate interest after it officially generates interest.SafetyContinuously generate revenue, further increase TVL, and thus drive the explosion of the entire ecosystem.

Bitcoin native meme assets: The emergence of Bitcoin inscriptions in May 2023, due to its own technicalXiaobai NavigationThe characteristics make asset issuance open and transparent. At that time, the market hated VC coins. Inscription Assets undoubtedly launched a "grassroots" revolution from the bottom up, allowing retail investors to trade in a fair environment. Whether the asset price can maintain momentum depends onCommunityThe consensus and cohesion of the blockchain is a natural place for the issuance of meme coins. Among them, ORDI, SATS, RATS and other inscription assets have increased by hundreds of times.

However, inscriptions have also been criticized for wasting Bitcoin block space and creating on-chain garbage. Runes can be seen as an evolved version of inscriptions, allowing more efficient transfers and combining multipleTokenTransfers are bundled into a single transaction, and multiple transfer destinations can be set (BRC-20 can only transfer oneToken), relieved by the use of BRC-20, etc.TokenThe Bitcoin UTXO expansion and network congestion caused by the standard.

In addition to being Bitcoin ecological assets, inscriptions and runes are also classified as meme coins. However, the iteration speed of the meme coin track is extremely fast, and the current mainstream narrative is to cooperate withAI Agent's meme coin, inscriptions and runes are no longer popular, plus the headexchangeSupport for the inscription asset format has been cancelled, which means that it will be very difficult to revive the related assets.

Reference: Magical Eden

3. Web 3 Games

In 2021, driven by DeFi Summer and the concept of the metaverse, the financialBlockchainGameFi combined with games has become a major narrative in the industry and has attracted a large number of traditional game companies to develop GameFi games. Until 2024, Web3 practitioners still pin their hopes for Massive Adoption on games. This is the biggest narrative in the game track and the biggest consensus that VCs and traditional game companies are always willing to invest in this field. Secondly, around Massive Adoption is theBlockchainTechnology can give players asset confirmation, which is also the main driving force for the continuation of the X to Earn model in most blockchain games.

However, until 2024, Web 3 Gaming has not yet solved the death spiral caused by the overly Ponzi-like token economic model. When the space for profit-seeking becomes smaller, the incentive for users to play games will also decrease. This can also be seen from the following data:

• The transaction volume growth rate is negative: Compared with 2021 and 2022, the daily transaction volume of blockchain games this year has also dropped to between US$20 million and US$30 million, with a negative growth rate.

Reference: Footprints

• Number of daily transactions: This year, the number of daily transactions in blockchain games has also dropped significantly compared to two years ago. Previously, the average was between 20 and 30 million, but now it is less than 10 million.

Reference: Footprints

The current situation of Web 3 Gaming is: old problems cannot be solved and the overall usage of the sector is poor. If this situation continues, it will be difficult to gain the favor of investors even when the crazy copycat season comes.

当前Web 3 Gaming 可以关注的重点项目为Xterio，由Web 2 知名游戏公司FunPlus 孵化投资，近期即将发币，该项目为游戏基础建设平台，强调在平台内运用AI 技术，想在叙事上与AI 有所挂勾。若期待 Web 3 Gaming 有复活可能，可以先参考 Xterio 发币之后的走势。

4. NFT

In fact, NFT appeared as early as 2017, but it only saw a full-scale explosion in 2021. In addition to the release of the ERC-721 standard that improved the infrastructure, the market also realized that NFT's uniqueness compared to homogeneous tokens can be applied to personal digital identity, artworks and other fields, but the main reason for the initial promotion was still the celebrity effect.

At that time, NBA Top Shot was launched in the form of NFT, allowing players to collect the wonderful moments of NBA stars on the court, which attracted the active participation of many crypto enthusiasts and fans. Among them, a dunk by the famous star LeBron James in the 2020 Finals had a transaction volume of up to 230,000 US dollars.

Subsequently, blue-chip NFT projects such as BAYC, Azuki, Doodles, and Pudgy Penguins emerged, kicking off the NFT Summer of 2021.

Due to the low liquidity and small number of NFTs themselves, it is easy to increase prices and easily have a wealth effect in a bull market. The myth of Free Mint to Financial Freedom is everywhere, but with the arrival of the bear market in 2022, liquidity is withdrawn from the cryptocurrency circle. NFT liquidity is more scarce than that of general currencies, so capital flight is obvious and the overall liquidity of NFT is withdrawn.

It can also be seen from the figure below that the overall number of transactions on Opensea has slowed down significantly in 2022. In addition to the lagging competitiveness of Opensea's products themselves, the main reason is still that the NFT market is not popular.

Reference: Dune

So is there still hope for NFTs? What are the recent narratives and actions?

• Opensea is launching new products

• Magic Eden coin issuance

• Pudgy Penguins coin issuance

It can be seen that NFT platforms and blue-chip projects have been active recently. Whether it is Ethereum or Solana chain blue-chip NFT projects, there are obvious signs of recovery in currency prices. Is the NFT market really coming back?

Reference: Magical Eden

In addition to observing whether the price trend of the top NFTs is growing steadily, we can also pay more attention to the use cases of NFTs combined with AI. For example, the well-known Solana on-chain AI Agent Zerebro previously created 299 images on Polygon, and the founder Jeffy also launched 5,500 Zerebro NFTs, and the holders can become core members of the community.

The above are just basic cases of collaboration between AI Agent and NFT. The characteristic of the cryptocurrency circle has always been to speculate on new things rather than old ones. NFT is expected to pick up again with the help of AI Agent.

The article comes from the Internet:WOO X Research: With the arrival of the copycat season, are there any hope for these tracks?

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