With the rapid development of blockchain technology, the encrypted world has entered the era of multi-chain coexistence. The impossible triangle of blockchain "security, scalability, and decentralization" has spawned thousands of tokens and hundreds of chains. From the L1-based public chain narrative in the last cycle to Optimism and Arbitrum in the current cycle, Layer 2 is the future trend but it also leads to the fragmentation of liquidity.
According to the data platform Defillama, there are currently 177 chains, with a total TVL of $47.84b, and a total market value of stablecoins on the chain of $133.08b. How to maximize the use of these assets and integrate information, the interaction between these chains is very important, because only when interoperability is achieved can different chains be able to communicate with each other and maintain the global state and liquidity of tokens. Interoperability is the key to enabling blockchain technology to achieve scalability and interconnection. It allows different blockchain networks to work together to achieve wider applications and Better user experience.
Whether it is to incentivize liquidity or incentivize transactions, it has existed long before DeFi Summer. For example, most centralized exchanges have incentive plans for cooperative market makers, the purpose of which is to allow them to provide good trading depth on their own platforms, so that other traders can obtain a low-slip trading experience, which is similar to liquidity incentives. It’s just that most of these incentives are carried out in the form of fee reduction and return, and most of them have nothing to do with the platform’s own equity tokens.
The earliest testers of transaction incentives\mining are also centralized exchanges, which were first practiced by Dragonex in 2018, and launched platform tokens (DT) based on transaction volume rewards, and transaction fees based on platform tokens "Transaction Mining" mechanism. This mechanism was then further "developed" by Fcoin. After the transaction mining was launched, the businesses of these two exchanges have achieved rapid growth. Especially Fcoin, as a latecomer to the "Exchange Wars", its single-day trading volume during its peak period was the sum of all other first-tier CEXs.
However, neither Dragonex nor Fcoin's glory lasted long. The former collapsed due to insolvency due to stolen funds, and the latter collapsed due to a huge deficit due to so-called "internal financial errors". The reasons for the collapse of the two platforms are slightly different, but the commonality is the financial deficit. The former is due to external attacks, while the latter is due to internal problems.
But we can’t help asking: If there were no theft incidents and internal financial problems that year, could transaction mining help them stabilize their market share in transaction volume and form barriers?
With the development of Web3 business so far, monopoly seems to be more difficult to build here. This is determined by the Web3 world's own account system, permissionless capital flow and project creation, open source transparent code and composability. It is difficult to build a moat in this environment, because users become It is more difficult to "capture and monopolize".
Any project that wants to survive and develop in this "low barrier" environment can only continue to strive for operational efficiency. The "operation" here is a broad term, which includes product innovation, marketing activities, team management, etc. In terms of work, accurate and efficient incentive design is also one of the important tasks. It is conceivable that the distribution and incentive model of tokens will inevitably need to be iterated more and more with changes in competition and user needs, and become a long-term work, based on the "economic model that does not need to be changed" designed from God's perspective For most projects, it may end up being a delusion.
Therefore, as a platform, when COSO selects long-term investment targets, whether the project team has "long-term combat capability", "sustained commercial aggressiveness", and "willingness to actively respond to market changes" are the key qualities of the inspection.
The "easy business victory" brought about by genius ideas will become increasingly rare in Web3.