5 Key Tracks For The Next Bull Market

KingData ·2022-08-09

Bear markets are often referred to as times when you can get rich. why is it like this?

This is because the opportunity to purchase a project at a disproportionately low price compared to the project's activity, development and utility abounds throughout the space. Choosing the right project is not easy, but the opportunity is clear.

This article is not a guide to getting rich, but if you take the time to learn and observe during a bear market, you may be in a good position.

This article will provide an overview of what is happening on the surface of the crypto market and what will likely charge during the next major bull run.

1. Adopt Layer 2s

In the blockchain space, there is a clear and realistic push to scale and increase transaction throughput. In the last bull run, we saw a lot of interest and speculation in projects like Solana and other "Alt L1". This is largely because Ethereum has not scaled properly to cope with the bull market’s demand for its block space.

However, many of these blockchains, while touting incredible speed and throughput, left many users angry about constant downtime, or underperforming when demand was high. Ultimately, many of these blockchains fail because they are monolithic rather than modular, trying to provide all the security, decentralization, and throughput in a single product.

It simply doesn't work at scale, and it's pretty clear (biased, but well supported). So what is the solution that provides high throughput, high security and high decentralization?

Enter level 2…

Layer 2 solutions provide the ability to increase throughput and thus scale the blockchain, while inheriting the security of the main chain. Solutions like StarkNet and zkSync support "batching", bundling thousands of transactions into a single transaction and publishing it to the main chain (Ethereum). This reduces the cost per transaction by orders of magnitude and increases the speed and total transaction volume that the chain can process.

So why is this so amazing and why should you care? In order for this wonderful technology to enter the mainstream and become the backbone of the new internet, we need it to be fast, secure and decentralized.

Layer 2 solutions address speed, while the main chain provides security.

This will enable a wide range of use cases to run to the standards we need for the world to adopt it. Examples include video games processing thousands of microtransactions per second, instant and cheap sharing of media, and money traded in the blink of an eye.

Without a layer 2 solution, it is likely that the full potential of blockchain will not be realized for a long time. If we want adoption, we need to provide layers that can easily transact at a capacity that allows mass adoption - Layer 2 provides this core requirement.

Currently, Layer 2 solutions such as zkSync, Starknet, Polygon Hermez, Optimism, and Arbitrum are all under active development and show a lot of progress, and will soon meet the basic requirements needed for adoption.

2. The maturity of DeFi and NFTs

Much of the last bull run was driven by two things: DeFi and NFTs. These are very powerful tools, but both are in their infancy - NFTs are more important than DeFi.

With the market calm, now is the time for these products to improve their ability to execute and re-test product-market fit.

So why does decentralized finance lead to the next bull market?

DeFi is an open financial system that allows anyone, anywhere, and any amount of money to participate.

This not only presents a huge opportunity for the “unbanked” but also enables a wide range of new fintechs to develop and mature. The problem is, “Decentralized lending is still in its early days. It can’t do everything centralized lending does, but it can go beyond the inefficiencies of traditional finance and take advantage of the creative thinking that Web3 attracts.”

  • Unbanked

The existing centralized finance (CeFi) financial system is a huge walled garden controlled by banks and governments. They choose who gets in and who gets how much. Regardless of whether you meet all their demands, they can still easily turn you down, and often do.

DeFi lending protocols and services sidestep this permission gate, offering the same financial services that banks currently offer to everyone.

It is 100% transparent and trustless. Everyone can view each other's chips (anonymous with their addresses) and assess the creditor/debtor's financial situation for themselves against their own criteria. This means you can peel off these layers like never before and understand the inner workings of the new age banks that exist in DeFi.

This opens up a world of financial innovation, introducing new utilities, new opportunities and clarity around who can earn, borrow or lend.

But what about NFTs? Those are just jpegs, right?

Why do they lead to the next bull market?

You are dead wrong. Non-Fungible Tokens (NFTs) are the Trojan horse of the world of true digital ownership.

In the final bull run, monkey photos and pixelated punk ruled the universe. This is just the beginning, simply demonstrating the basic utility of digital ownership.

When we buy a shirt from a brick and mortar store, it's yours, only you own that particular shirt and you have a receipt to prove it. It is "irreplaceable" in every sense.

But before NFTs, this was not possible in the digital realm. Sure, you can buy X, Y, or Z online collectibles, but it's stored by the company from which you bought it, on servers in their rented space. With NFTs, the asset lives in a wallet that you control.

This technology can and likely will disrupt a slew of industries in gaming and music, all the way down to home mortgages and lending. The scope is unimaginable, and some of the other products and solutions that will lead us into another bull run outlined below use this key technology.

All in all, watch out for innovations within the NFT space and teams that are working hard to realize the full potential of what they can do.

3. Adopt Web3 Single Sign-On

Single sign-on web3 authentication allows the use of a single password and account without attaching personal details to millions of new websites and existing major news outlets and platforms.

Another big topic that is constantly in the news is privacy and data. Companies like Meta, Amazon, and Google pretty much own your identity. They know everything about you - your password, date of birth, SSN and everything you do on the internet.

They say it's safe, but how many times has your data been compromised? It's essentially Westworld-level data collection, and most people just allow it to happen because there's no better solution to gain traction…yet.

The data collection market is worth billions of dollars, and that's how these companies make money. From data:

“The global data collection market is valued at USD 1.66 billion in 2021. It is expected to reach USD 8.21 billion by 2028, growing at a CAGR of 25.6%.”

These trillion dollar companies are selling you. Not just random data about a 25-year-old, white, woman living in Ohio, but your name, email, location, products purchased, and more.

Web3 single sign-on solves this problem. It allows companies to collect data, learn about your preferences, and provide you with personalized sources of information that they think are of interest to you and ensure that it is tied to your identity.

But they can only have the data with your permission.

The future looks like this to me: create a web3 wallet/identity and link it to any of the hundred websites where you have an account. When you visit any of them, click a button - "Login with web3 wallet" - and you are good to go. It's one password to rule them all, while protecting your data and identity, and making it easier to surf the web.

4. The rise of GameFi

Currently, in a traditional gaming environment, gamers either pay for the game up front, pay monthly, or purchase digital assets in free-to-play games.

However, no matter what game they play, every action they take and every item/character they get is not theirs. It's stored by that game, and if they stop playing or stop paying, it dies in a server they can't control. Current game studios often have strict terms of service that prohibit players from making any "real money transactions."

This means that all the time gamers spend immersed in the game and all the value added to the game world is not theirs. The current system doesn't allow gamers to take advantage of it, and if they try to circumvent the rules, they could be banned permanently.

This market is ripe for disruption. Allowing players to invest their time and money into games powered by blockchains with verifiably owned NFTs will create opportunities for both games and players.

We may soon be living in a world where moms don't say "why waste time playing games" but "I don't understand what Jimmy does with these games, but he pays for all his stuff ."

The gaming industry is currently more lucrative than all other media industries combined, and so far, players have just been left out of the equation. Web3 gaming isn't a fairytale fantasy, it's a reality.

Unfortunately, there is currently a very dearth of finished playable web3 games. But in this bear market, watch out for games that become playable and have strong communities.

These are the games you want to pick up and try.

Some games I follow closely:

Impact: Space Strategy MMO

Parallel : Sci-Fi Card Game

Loot Realms: Massively Multiplayer On-Chain Economy and Knights Game

Guardians Guild: Mobile RPG

5. Music NFTs.

Today, making a living as an artist is more difficult than ever, although the ability to spread music out is easier than ever.

Why? In a nutshell: Streaming services and record labels take most of the money, while artists are left with pennies.

As an artist, you have to be one of the lucky few to be picked by a record label or farm social media algorithm for content revenue. However, even with content creator income, you need to be at the top of the totem pole to be a sustainable life.

In Web3, artists can better monetize their music through new monetization avenues, stronger connections to their communities, and fuller ownership of their music.

NFT monetization can be done in several different ways

  1. Selling exclusive membership NFTs to give fans special access to the artist, such as VIP access to shows, limited edition merchandise, face-to-face with the artist

  2. Sales revenue sharing NFT, sharing % of future sales profits, allowing artists to work freely without having to be subject to a lot of red tape when working with record labels and streaming services.

ownership of their music

Ownership of an artist's music is the crux of the current market problem. Record labels own most of the profits, then streaming services pay a small percentage, which is then divided unfairly between artists and labels.

With NFTs and web3, artists can distribute music as NFTs, whether it's a single album or an entire album, allowing your fan base to buy music directly from you, rather than through a record label.

A tighter community

With web3 authentication and NFTs, artists can leverage small fan bases for sustainable living. You don't need a global audience to buy your world tour - you just need 100 loyal fans.

A prime example of an artist already doing this is Gramatik, who has been a long-time proponent of cryptocurrencies, blockchain, and empowers artists to own their music catalogs and create them freely.

Unlock the potential of content creators to create how and where they want, while being able to have their own audience.

In web3, artists and content creators are no longer beholden to the platforms on which they build their audiences or rely solely on advertising as a source of revenue.

Being able to offer their followers a basic and potentially free NFT to allow them access to your private website, content, discord and community will also empower these content creators to be able to get closer to their community, share their Followers port to any new platform and unlock new and unique web3 monetization opportunities.

Road ahead

web3 is still in its early stages. It took a lot of development and UX design to push us to the next level.

A few important things are still needed to support this growing ecosystem:

The Layer 2 solution is fully operational and provides the base layer with the ability to support transaction volumes to support mass adoption and utility

Ethereum successfully merges, shuts down Proof of Work (PoW) and moves to Proof of Stake (PoS)

Bring new users into the user experience of these platforms and products to elevate to a level comparable to the web2 experience we all enjoy today

We don't know when the next bull market will come. But we are coming out of a bear market and can expect the next bull market to offer serious utility and mass adoption.

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