In recent times, meme coins have been celebrating while mainstream projects have been overshadowed. However, the author of this article believes that value investments will not be in vain, and a more vibrant and sustainable bull market still requires these mainstream narratives to take over. This article is sourced from the author’s online observation and has been compiled and written by PANews.
(Background:
Study: Bitcoin to Pull Back to $63,000, Shitcoins and Meme Coins at Short-Term Highs
)
Table of Contents:
AI+web3
ETH layer2
BTC layer2
Alt-layer1 High-Performance Chains
Chain Abstraction
Others
The continuous frenzy of meme coins and the relative underperformance of mainstream narrative coins have created an illusion that this bull market will rely on AltCoins. This has left those who are still building mainstream coins feeling lost. Does this mean that value investments will lose to pure emotional FOMO? Obviously not.
In my opinion, the frequent breaking of the meme coin circle is just a prelude to the mainstream narratives such as Layer2 Summer, AI+DePIN, and chain abstraction, which are yet to come. The big ones may be brewing:
Firstly, BOME’s listing on Binance within three days has achieved the great miracle of the meme market. The narrative of pure asset issuance of meme coins, although highly risky, has become the “mainstream narrative” during the period of no progress in the long term. However, it is necessary to understand that the fundamental basis of the narrative of pure asset issuance is emotion. Some funds that prefer high risk and high volatility tend to speculate on emotions, and some new off-chain funds and users are easily influenced by FOMO emotions. However, emotions are still emotions. The low issuance and operating costs of meme coins determine that their life cycle will be short, so one should not be too attached to them.
In fact, through my contact with VC friends during this period and my exploration of early-stage projects in various vertical narrative directions, I firmly believe that the dominance of meme coins is only because the mainstream narrative needs more time to ferment. Value investments will not be in vain, and a more vibrant and sustainable bull market requires these mainstream narratives to take over. Next, I will share my trend observations:
AI+web3
AI+DePIN will definitely be the narrative main wave of this bull market for a simple reason: it is a new story with strong scalability and slow implementation.
The AI concept covers both web2 and web3, attracting a large number of developers, VC funds, and large-scale users. Whether this bull market can break free from the cycle of existing funds depends on the impact of the AI breaking circle effect. At the same time, the extension possibilities of AI scenes are vast, including computing power aggregation, model training, interactive model communication and operation, intelligent automated trading execution, AI distributed data verification, data IP ownership, etc. The narrative potential of AI+Web3 is beyond imagination.
With the narrative space, various development activities can be carried out around different vertical directions, combining various infrastructure projects to expand the industry, attract VC investments, develop applications, and so on. The key is that the prosperity of the infrastructure and the market’s expectations for application landing are not directly proportional. We all know that AI applications are difficult to land, but isn’t this an opportunity for the infrastructure market to reach new heights?
Just imagine, if the mainstream narrative of the market can shift from DeFi infrastructure to AI+web3 infrastructure, even if we don’t discuss the landing of applications, the AI narrative framework can span two bull and bear cycles.
ETH layer2
Although modular one-click deployment and the Cancun upgrade have reduced the development and maintenance costs of layer2, they have also burdened layer2 with market expectations for comprehensive chains.
Which layer2 technology is more unique and differentiated, which layer2 has faster user and traffic growth, which layer2 has a wider coverage of B-side stack strategy resources, which layer2 has faster progress in ecosystem landing, and which layer2 can have killer applications, all these will become indicators of the value evaluation system for layer2.
This means that the layer2 track will become more competitive, and more innovative layer2 projects like Metis will frequently disrupt the market. The four giants standing at the forefront of the layer2 trend will face great pressure. The huge market expectations and slow ecosystem landing will make it extremely difficult for these layer2 projects to reorganize at a higher level.
To some extent, choosing layer2 is destined to endure torture and loneliness. Fortunately, the layer2 track is highly extendable, with modular combination of new chains, Rollup As A Service, stack strategy, layer3 application chains, Paymaster subsidy war, tokenomics catalyst, primitive component commercialization, etc. These 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 and conducting more flexible and independent chain improvements in a crypto-native way. To some extent, it is also giving Ethereum a second life.
With this in mind, does it bring a new expectation for layer2, which has always fallen short of expectations in landing? Regardless, the battle of Ethereum layer2, though difficult, is imperative.
BTC layer2
If we look at the BTC ecosystem from a modular perspective, it seems more suitable to promote a series of BTC layer2 derivative ecosystems because of its 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 huge liquidity is uniquely advantageous.
However, the BTC ecosystem, which sprouted from the ordinal theory of Ordinals and exploded after BRC20, is currently exploring landing through a series of technical narratives such as RGB, Lightning Network, CKB parallel replacement chain, BTC-EVM chain, etc.
The much-anticipated third wave of the narrative is likely to be driven by the upcoming BTC layer2 narrative, or rather, BTC layer2 infrastructures themselves 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 directly implemented can continue the story.
From a pessimistic point of view, the BTC layer2 market is just putting old wine in new bottles. However, from an optimistic point of view, the development of the Ethereum ecosystem has a high demand for resources, manpower, and funds, while BTC layer2 is a completely new strategic highland. More developers can join the ranks of builders with relatively low thresholds.
Moreover, BTC has a stronger consensus, and the road for BTC layer2 is wide and broad. Why not let developers go all out?
Alt-layer1 High-Performance Chains
In the previous bull market, everyone discussed who would be the Ethereum killer, while in this cycle, Alt layer1 projects compete to become effective supplements to Ethereum.
Whether EVM-compatible layer1 extensions attract more developers and users by diverting from the Ethereum ecosystem or simply repeat what Ethereum has done is debatable. However, the current focus is on high-concurrency transaction chains, parallel EVM chains, MOVE language underlying chains, etc., in an attempt to take a path that Ethereum cannot take and attract more innovative developers to start from scratch once again.
I have confidence in these high-performance layer1 chains because they all go beyond the technical limitations of Ethereum’s launch and try to enable a new Lego narrative with a larger underlying innovation. Whether Solana can activate DePIN and whether SUI can revive new DeFI remains unknown, but it is worth looking forward to.
Chain Abstraction
Modular thinking has developed to a point where it is not just a narrative. It has become a fundamental blockchain concept. 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. Thus, a more abstract concept has taken the stage — “chain abstraction”.
It should be said that chain abstraction is the combination of “account abstraction” and “modularization”. It is extremely important. The slogan of “Mass Adoption” has been shouted for so many years without results. In the end, the market is still stuck in the stage of basic infrastructures such as trading chains, wallets, exchanges, and DeFi. This creates a high barrier and challenge for new users trying to onboard to web3.
Chain abstraction is based on user experience and reduces barriers by providing more B2B services such as intermediate chains or chains within chains. This allows a wider range of web2 users to smoothly enter web3 and have a smoother user experience, thereby changing the fundamentals of the crypto market, which has always been niche and limited.
Others
In addition, there are other niche areas such as restaking, fully-onchain games, intent-centric transactions, privacy transactions, etc. They all carry a part of the mainstream narrative progress.
I know that some people may view these mainstream narratives as memes, or even worse than memes. When the market becomes FOMO and impetuous, it is inevitable that values become confused. Anyway, let’s consider this as an article written for those who adhere to value investments, reflecting the true voice of dedicated builders, and that should be enough.
The road ahead is as tough as iron, but it is time to take the first step. Stay firm on the correct path according to your own understanding and continue to build!
Related Reports:
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Arthur Hayes: “Narrative is More Important than Technology” for Investing in Cryptocurrency Projects, Bull Market Attention has Shifted to Shitcoins
Educational: Understanding Competitive Coins, Shitcoins, Meme Coins, Dog Coins/Shit Dog Coins, and Air Coins, and Their Differences.