Author: Blockchain Researcher Haotian | CryptoInsight
The continuous frenzy of MEME coins and the relative sluggishness of mainstream narrative coins have created an illusion that this bull market will be driven by AltCoins. This has left those who are still building mainstream coins feeling lost and uncertain. Does value investment stand a chance against pure emotional FOMO? Apparently, it does.
In my opinion, the frequent breaking of circles by MEME coins is just a prelude to the mainstream narratives such as Layer2 Summer, AI+DePIN, and Chain Abstraction, which are still brewing and may be on the verge of something big.
Firstly, the listing of BOME on Binance within three days has achieved a miraculous day for the MEME market. Although the narrative of pure asset issuance carries great risks, as seen from DOGE to the previous round of SHIB PEPE, MEME coins have become the “mainstream narrative” during the period of no progress.
However, it should be understood that the fundamental of pure asset issuance narrative is emotion. Some funds that prefer high risk and high volatility tend to speculate on emotions, while some new off-chain funds and users are easily swayed by FOMO emotions. However, emotions are ultimately just emotions. The low issuance and operating costs of MEME coins determine that their lifespan will be short, so don’t get too attached.
In fact, through my interactions with VC friends during this period and my observation of early-stage projects in various vertical narratives, I firmly believe that the dominance of MEME coins is only because mainstream narratives need more time to ferment. Value investment will not be in vain, and a more magnificent and enduring bull market needs these mainstream narratives to take over. Next, I will share my trend observations:
1) AI+web3
AI+DePIN will definitely be the narrative of the main bull market wave. The reason is simple: new story, strong scalability, slow implementation.
The AI concept attracts a lot of developers, VC funds, and large-scale users who are interested in both web2 and web3. Whether this bull market can break the cycle of existing funds depends on the impact of AI breaking the circle.
At the same time, the extension possibilities of AI scenes are vast, such as computing power convergence, model training, interactive model communication, intelligent automated trade execution, AI distributed data verification, data IP ownership, etc. The narrative space of AI+Web3 is beyond imagination.
With this narrative space, various infra projects can be developed around different vertical directions, attracting VC investments, playing around, developing applications, and so on. The key lies in the prosperity of the infrastructure and the market’s expectations for application landing. We all know that AI application landing is difficult. Isn’t this an opportunity for the infrastructure market to push towards the sky?
Imagine if the mainstream narrative can shift from DeFi infrastructure to AI+web3 infrastructure. Even if we don’t consider the landing of applications, the AI narrative framework can span both bull and bear cycles.
2) ETH Layer2
Although the modular one-click launch and the upgrade of the Cancun have reduced the development and maintenance costs of Layer2, Layer2 has also been burdened with market expectations for comprehensive chains.
Which Layer2 technology is more unique and differentiated? Which Layer2 has a faster user and traffic growth rate? Which Layer2 has a wider coverage of B-end stack strategic resources? Which Layer2 has made progress in ecological landing? Which Layer2 can have killer-level applications, etc.? All of these will become indicators of the Layer2 value evaluation system.
This means that the Layer2 track will become more competitive, and more projects like Metis will disrupt the market. The four giants standing at the forefront of Layer2 will face tremendous pressure. The huge market expectations and slow ecological landing will make it extremely difficult for these Layer2 projects to reach new heights.
To some extent, choosing Layer2 means enduring hardship and loneliness. Fortunately, the scalability of the Layer2 track is strong enough. Modular combination of new chains, Rollup As A Service, stack strategies, Layer3 application chains, Paymaster subsidy war, Tokenomics catalyst, Primitive component commercialization exports, etc., are all points of leverage.
I have always believed that the current Layer2 is essentially a “soft fork” of the Layer1 mainnet. Standing on the shoulders of giants, Ethereum can undergo crypto-native chain upgrades in a more flexible and independent manner, which is also a way to give Ethereum a new lease of life.
With this in mind, can we have a new expectation for Layer2, which has always fallen short of expectations? There is no doubt that the Ethereum Layer2 battle is difficult but necessary.
3) BTC Layer2
If we look at the BTC ecosystem from a modular perspective, BTC seems more suitable for promoting a series of BTC Layer2 derivative ecosystems. It has stronger consensus, obvious technical flaws, and weak technical boundaries and principles. Using the BTC mainnet as the settlement layer and then building a BTC derivative market that can release massive liquidity is unique.
However, the BTC ecosystem, which sprouted from Ordinals’ ordinal theory and exploded after BRC20, is currently exploring and landing a series of technical narratives surrounding RGB, Lightning Network, CKB parallel chains, BTC-EVM chains, and more.
The long-awaited third wave of non-fungible tokens (NFTs) is likely to be driven by the upcoming BTC Layer2 narrative, or rather, the BTC Layer2 infrastructure itself will take on the third wave. After all, the BTC ecosystem has already accumulated a large number of users and funds through asset issuance, and only Layer2 solutions that can be implemented directly can continue the story.
From a pessimistic perspective, the BTC Layer2 market may just be old wine in a new bottle. However, from an optimistic point of view, the development of the Ethereum ecosystem requires high resource, manpower, and funding thresholds. In contrast, the BTC Layer2 is a completely new strategic highland, and more developers can join the Builder ranks with relatively lower barriers.
Moreover, BTC has stronger consensus, and the path for BTC Layer2 is wide and open. Why not let developers take the reins and go all out?
4) Alt-layer1 High-performance Chains
In the previous bull market, everyone discussed who could be the Ethereum killer. In this round, Alt layer1 is competing to become an effective supplement to Ethereum.
Whether EVM-compatible Layer1 extensions attract more developers by diverting them from the Ethereum ecosystem through subtle differences or by replicating Ethereum’s approach is still up for debate. However, this round is more about exploring new paths that Ethereum cannot take, attracting more innovative developers to “start from scratch”.
I have confidence in this round of high-performance Layer1 chains. This includes the potential of Solana’s high-concurrency transactions in the DePIN narrative, the reshaping of DeFi security by SUI Move language, and the efforts of various parallel EVM chains such as Sei, Artela, Monad, etc.
In my opinion, these emerging chains have surpassed the technical limitations of Ethereum at the time of its launch, and are attempting to activate a new round of Lego narratives with greater underlying innovation. Whether Solana can activate DePIN or SUI can revitalize new DeFi remains to be seen, but it is worth looking forward to.
5) Chain Abstraction
The development of modular thinking has evolved beyond mere narrative and has become a fundamental blockchain ideology. The account abstraction that has been discussed around the Ethereum EVM environment for many years has become outdated in the environment of more complex UTXO chains and non-EVM multi-chain environments. Thus, a more abstract concept has taken the stage – “Chain Abstraction”.
It can be said that Chain Abstraction is the culmination of the combination of “account abstraction” and “modularity”. It is extremely important. The slogan of Mass Adoption has been chanted for so many years without landing. Ultimately, it is because the market is still in the basic infrastructure stage of trading chains, wallets, exchanges, DeFi, etc., which brings a high threshold and challenge for new users to onboard web3.
Chain Abstraction is based on user experience, reducing the threshold through intermediate chains or in-chain services, allowing web2 users to enter web3 with a smoother and more seamless user experience, thereby changing the fundamentals of the crypto market, which has always been small and in a state of market competition.
In addition to these narratives, there are also sub-tracks such as Restaking, fully-onchain games, intent-centric transactions, privacy transactions, etc., which carry a part of the mainstream narrative progress.
I know that some people may view these mainstream narratives as merely MEME-like, or even worse than MEME. The market’s FOMO and impatience may lead to a distortion of values. Anyway, let’s consider this as a piece of “chicken blood” writing for those who adhere to value investment, reflecting the real voices of persistent builders. That’s enough.
The road ahead is as tough as iron, but now we must take the first step. Stay firm on the correct path that aligns with your own understanding and continue to build!
Note: Honestly speaking, I did feel the pressure from the current market situation where MEME coins are rampant and mainstream coins are declining. I wrote this article in one go to recharge my faith, for myself and for everyone. If you find it useful, please support and repost.
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Haotian-CryptoInsight: “MEME coins are rampant, where should the five mainstream narratives such as Layer2 go from here?”
