SparkDAO is an investment research group focusing on the field of digital encryption, with members distributed all over the world. We are keen to explore the underlying logic and cutting-edge tracks in the field of digital encryption. Welcome to our Twitter: sparkdao_io

1.Institutional credit weakened, Web 3 rise

Research shows that trust in institutions is waning, and 70 percent of Americans disapprove of how Congress handles its work because Congress spends money recklessly and does insider trading.The Web 3 will seek to replace the rotten institutions.The "user-ownership economy" will continue to exist and will begin to dominate.Basic factors such as timing, appropriate talents and investors have gradually been in place, making the "user ownership economy" a reality.Ordinary savers can earn 5% annualized earnings in the DeFi agreement, much higher than the savings gains that Wall Street provides.In addition, NFT will also provide creators with a lot of opportunities to cash in.

The DAO era opens

The DAO is a mobile online community, whose resources are managed by community contributors.Encrypted wallets are the backbone of the DAO and Web 3 economy, and wallets will play the role of a data manager and universal identifiers.DAO tools, NFT infrastructure, and cross-chain bridges will receive more attention this year.The specific content worth paying attention to include: decentralized identity management system, financialized elements, community-oriented business model, creator tools, and markets focused on NFT and other tools.

The DeFi agreement has seen tremendous growth over the past two years, with two of the most active DAO, Compound and Uniswap having huge reserves of $1 billion and $4 billion, respectively.Although most of these DeFi agreements already play a role in money management, best practices for money management are still missing, and we may see real financial managers joining various DAO's this year.

Often, traditional institutions generate reports quarterly, which means that financial transparency disclosure is limited to four times a year.In contrast, DAO and blockchain can significantly improve financial reporting because the data is always available, and we'll see blockchain-supported financial statements to improve how the organization operates.

3.More money flows into crypto space

The year 2021 is arguably the first year of cryptocurrency institutions, with a large amount of institutional capital flowing into the cryptocurrency sector.Despite no predictions of private fund inflows, when new trends investors begin to recognize the sector, the BTC, ETH and other crypto blue chips will make long-term gains.

4.Bull and bear cycle boundaries are blurred

The cryptocurrency industry is known for its high volatility, with surges and plummeoccurring. The four-year bull and bear cycle seems to be being broken, most desperate predictions have been inaccurate, and bitcoin is creating a new historical trajectory.At the same time, Ethereum, which represents the technical direction, will be difficult to surpass bitcoin in the short term, because its scalability problems remain.New public chains such as Solana, BSC and Avalanche, and second-tier expansion solutions such as Polygon will also continue to strive for living space.

5.Changes in Bitcoin storage mode and technology upgrading

Interoperable blockchain will take over the encrypted world.As long as it is safe and effective, people will no longer care about what form Bitcoin is stored.Currently, 1.5% of the bitcoin reserves are deposited on the Ethereum network, which is just the beginning.With the U. S. adoption of the cryptocurrency industry, about 10% of the bitcoin supply will be locked up in the ETF in the future.Bitcoin's Taproot upgrade was launched in November 2021, with lower transaction costs, increased privacy, and replaceability. What is worth looking forward to is the next phase of the Bitcoin Lightning network.

6.Encryption market infrastructure was further improved

• Lending products and stablecoin regulation have benefited the industry, but cryptocurrency lending could face tight regulation this year.
• Centralized finance in the form of encryption companies is changing financial markets.Talent is moving to crypto companies, and institutions that actively introduce encryption ideas into their traditional finance will win.
• Although decentralized trading platforms have a certain development foundation, but Coinbase, FTX centralized trading platforms and other centralized trading platforms still occupy the dominant position.When Web 3.0 finally takes over, a whole new Internet-scale trading platform emerges.
• Cryptocurrency hosting will be a profitable service.Currently, professional hosting providers on the market include Ledger, Anchorage, Fireblocks, and BitGo. In the future, half of the cryptocurrency holders are expected to keep their crypto assets in multi-signed nonescrow accounts, and the remaining half in escrow accounts.

7.The NFT adoption rate is increased

The NFT is a portable, scarce provable and programmable digital collection, which can be virtual weapons, equity, virtual land, data records on social media, or even a simple digital avatar.Although some NFT's are worthless, NFT overall still has great potential.

For example, Punks and Apes are successful cases.Such NFT belongs to the community-owned profile picture (PFP) collection, gaining value from the early communities and their meme.In the third quarter of 2021, PFP sales reached $5 billion. Crypto Punks, Bored Apes, and Pudgy Penguins may represent in the future people's digital identity and reputation.

Another example, the fan token, can be defined as a collection with membership rights.Rights can be non-financial (experience access, identified as a super fan) or financial (shared royalties, tickets), or a combination of both.Both alternative social token and NFT could be the driving force to bring cryptocurrency into the mainstream.

8.Ethereum merger and liquidity pledge

According to a Bankless report, decentralized finance, outvalue most traditional banks. DeFi's development and NFT fever have pushed Ethereum to a critical point of overload operation (high gas, high energy consumption, low efficiency).In June, Ethereum will turn to the PoS equity proof consensus algorithm through a "merger".With Ethereum upgrading, its monetary properties and the underlying application properties will be further enhanced.The pledge industry is expected to grow to $40 billion a year by 2025.Currently, protocols such as Anchor and Lido allow users to pledge the token while keeping the collateral liquid.

9.Structural differentiation of the stablecoin market

Tether released two transparency reports last year that guaranteed USDT's market credibility.Although USDT's share of the stablecoin market value fell from 80% to 50% in 2021, its structural role in cryptocurrency trading platform settlement remains undiluted.

DAI has been the mainstream decentralized stablecoin for many years.In addition, Terra's UST became the fastest-growing decentralized stablecoin. The Columbus-5 upgrade enables Terra to support dozens of applications and cross-chains through Cosmos's cross-chain communication protocol. DAI serves primarily as an Ethereum reserve, while UST focuses on creating its ecosystem and expanding multiple chains.

*The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of SparkDAO. Every investment and trading move involves risk, you should conduct your own research when making a decision.