Speculation on Layer 1 assets basically no longer exists (Polkadot’s DOT is the only exception these days). In the Bankless 2021 forecast, I don’t think there will be a new L1 blockchain that will seize the market.
what does this mean?
In a bull market, thousands of new market participants will enter the market with funds, and all they want to do is "speculation."
They are beginning to feel the FOMO sentiment, BTC has just risen from $5,000 to $40,000, and ETH is close to the previous all-time high (ATH). These two assets are the most accepted crypto assets in the current ecosystem. Relatively speaking, they belong to crypto investments with the least risk.
Greed fuels a bull market, and people will take out their calculators and ask themselves:
"If I put all my money into BTC in March 2020, how much money will I have now?"
The answer is of course "8 times increase", of course, most people may sell all the way, and most people will not copy to the end, etc.
What these new entrants want is an 8-fold increase similar to BTC, but when they see BTC worth $40,000, they will subconsciously think that "a 10x increase in BTC" is no longer possible.
Therefore, after these new players enter the market with funds, they will check the asset list by the market value list, and then guess which token can bring them 10 times the return.
Cryptocurrency bull market cycle
First, BTC skyrocketed, then ETH kept up, and then new funds would flow into the altcoin market. Next, we will have a -40% wash and repeat. The crypto market is like that.
The general rule of thumb is how people view the development of these markets. The income of BTC is transferred to the income of ETH, and then to the altcoin.
And altcoins are assets with low market value, and they are also the assets that are easiest to increase. In the bull market cycle, you can see that many altcoins will have 100 times returns. At this stage, you will find that a large number of people have made a lot of quick money on the books, and then there will be a big laundering, leverage and greed will be washed away, and then we start to wait for the BTC price to rise, which shows that we will bear more Multiple risks are possible.
Binance Vs Uniswap
Binance emerged in 2017. It is one of the fastest companies in the world to achieve unicorn status. The exchange quickly met the needs of retail investors and listed as many crypto assets as possible. Binance has risen rapidly because it serves "speculative demand", and it has become the Schelling point for token listing and liquidity promotion.
A key driving factor behind its traction is free access (Binance does not require KYC before 2019), and there are no deposit and withdrawal restrictions.
Binance perfectly captured the speculative demand in 2017, because in 2017, there was a lot of speculation on Layer 1, and people wanted to buy the next Bitcoin or Ethereum killer.
Bitcoin was in a civil war at the time, and Ethereum was only a few years old. Not many people believed they would succeed in the future.
Therefore, there has been a lot of L1 token speculation in the 2017 cycle, which in turn requires a centralized exchange to act as a cross-chain infrastructure.
Because there is no intermediary, you cannot exchange BTC for ETH. These blockchains cannot communicate with each other, so you need an intermediary to provide services for you, and Binance is the intermediary.
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Uniswap
Uniswap is similar to the Binance role in 2017. It does not require KYC, email and password to register. As long as you have an Ethereum wallet, you have a Uniswap account.
Uniswap does not require a deposit and a 20-minute confirmation time. If your money is on Ethereum, you can use Uniswap.
Even better, Uniswap does not focus the asset listing decision on a team, nor does it require the token project party to pay a huge listing fee. All of this is achieved by self-help.
Another reason for Binance's success is the BNB token, which allows Binance to obtain funding and "list" early in its life cycle. Binance's ICO investors have reaped great returns. The initial price of its token was $0.1, and now the market price of BNB has reached $45 (this is why people will speculate on low-market value tokens).
In a similar way, Uniswap distributed its universal basic income to more than 200,000 users. Uniswap has become the Schelling point of Ethereum asset trading. We know that Uniswap's weekly trading volume has surpassed Coinbase.
Cryptocurrency and blockchain technology are revolutionary, and trading assets on a centralized exchange is not revolutionary.
The L1 speculation era is coming to an end. Bitcoin and Ethereum have achieved great success. Now, the era of application layer speculation has arrived, and the winner has not yet been confirmed.
Even DeFi’s darling Uniswap, it faces a strong competitor-Sushiswap. In the past 14 days, the price of the token sushi of competitor Sushiswap has doubled, and the trading volume of the platform is also very Considerable, this shows that the speculative potential of the DeFi protocol is huge.
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