Here is the English translation: As an independent researcher, how do you see the development trends of the Crypto industry in the next one to two years? Chen Jian: In my opinion, the entire industry seems to be in a rather anxious state at the moment. Whether it's the primary market or the secondary market, it seems that no one has made much money this year. Venture capitalists may have made profits on paper, but they haven't actually cashed out. Traders in the secondary market have generally been trapped, and project parties are also very anxious. Projects that have already been listed are waiting to cash out and continue to operate, while projects that missed the golden window period in March and failed to get listed on major exchanges are now trying to figure out how to distribute their tokens by the end of the year. The root cause of this anxious state is the lack of liquidity in the market, which cannot absorb the supply. Not only are project parties and venture capitalists very anxious, but even the marketing agencies that help project parties are also very anxious. I feel that the businesses that are truly able to help project parties or venture capitalists solve the liquidity problem are still making money, and making quite a bit. Apart from that, everyone is generally anxious and losing money. As for the hot spots, there doesn't seem to be anything particularly obvious this year. The Ethereum ecosystem is a mixed bag, and Layer 2 solutions are also aesthetically fatigued. The Solana ecosystem is very lively, but there doesn't seem to be anything particularly new. We're pondering what the third growth curve of Solana will rely on, and some people are discussing concepts like DePIN, but they're not particularly novel. For the Ton ecosystem, I'm personally trying to support some projects. Although I predicted last year that the traffic dividend of the Ton ecosystem would take off, I actually participated in relatively few projects. Now I'm starting to change my mind. Through contact with some projects, I find that the quality of traffic in the Ton ecosystem seems to have improved somewhat. Although there are still a large number of bots and junk accounts, at least the Ton ecosystem provides a domain where users can actually interact and operate, compared to the currently rampant infrastructure projects. In general, I feel that various sectors may be in a relatively anxious state, all trying to find their second or third growth curve.

Here is the English translation:

Chen Jian: First, I want to emphasize that as industry practitioners, we must maintain an optimistic attitude towards Crypto. If you think this industry is going to collapse, you should leave as soon as possible. This is not only a professional attitude, but also for your own long-term survival in this industry.

From a rational perspective, I think the market next year will be relatively good. The global economy is awash with liquidity and interest rates are being cut, and apart from the US stock market, Crypto seems to be a relatively good investment choice. But in terms of actual operations, the current market situation is indeed confusing.

The two most alarming factors are: first, Bit is still hovering above $60,000, while Altcoins have fallen to levels even lower than the bear market. If Bit experiences any fluctuations, Altcoins may suffer even greater shocks. Secondly, this industry still seems to be dominated by off-exchange capital, such as the daily focus on the inflow and outflow of ETF funds.

From the perspective of the primary market, I think the current projects can be divided into two categories. The first category is "so-so" projects, that is, the team, track, and valuation are not luxurious or top-tier, but not so grassroots either. This type of project is currently in a difficult situation, and I suggest they prioritize revenue generation, whether through collecting gas, selling nodes, or other means. As long as they can get users to actually interact with the product, they should focus on that, and not rush to issue tokens. Perhaps you can survive without issuing tokens, but once you do, you may die even faster.

The other category is projects with unique advantages, occupying key positions in the track, or with excellent teams and VC backgrounds. If you are optimistic about next year's market, issuing your own assets at the "halfway up the mountain" or "at the foot of the mountain" may be a good choice. But you need to be aware that if your project does not get listed on major exchanges and does not have top-tier institutional support, it may be very bleak if it is listed on small and medium-sized exchanges.

I also want to remind everyone, especially retail investors, to pay attention to two types of projects: one is projects without a revenue model, and the other is projects that have already made a lot of money before issuing tokens. The former may only be able to replenish their funds by selling tokens, while the latter, although they may appear to have money and vision, may not necessarily use that money to support the token price.

In general, I believe the Crypto industry will still have a lot of room for development in the next 1-2 years. But in terms of actual operations, traders need to make choices based on their own risk preferences and judgments of the market.

Mercy: Vitalik recently stated on Twitter that next year he will only focus on Layer 2 projects that have already reached a certain stage. How do you understand the meaning behind this statement?

Chen Jian: Vitalik's statement has two main implications. First, he divides Layer 2 projects into three stages, with the highest stage being fully decentralized Layer 2, including decentralized sequencers. This is in line with Ethereum's technical roadmap and philosophy. Vitalik hopes to guide more Layer 2 projects to develop in this direction.

We know that the main way for Layer 2 projects to make money, apart from issuing tokens, is to earn transaction fees. These fees are usually earned by the project's own nodes. Faced with such huge interests, it is very difficult to demand decentralization of Layer 2 projects. But if Layer 2 is not decentralized, it will not be in line with Ethereum's future development direction. So Vitalik hopes to guide Layer 2 towards decentralization through this approach.

But I think this goal will be very difficult to achieve, mainly for two reasons:

1. The power of vested interests is too strong. The gas revenue of top Layer 2 projects like Base, Arbitrum, and Optimism is very considerable. Especially for projects like Base that do not issue tokens, if they cannot earn gas fees, it would be equivalent to doing public welfare.

2. The development prospects of the Ethereum ecosystem are worrying. Although I am mainly involved in the Ethereum ecosystem, I have to admit that Ethereum's performance this round has been disappointing. Many analyses have pointed out the current problems of Ethereum.

Nevertheless, I still believe that in the long run, Ethereum remains the ecosystem with the highest level of decentralization and spirit. The mission and entire roadmap of the Ethereum Foundation are dedicated to being as open and decentralized as possible. So I think in the long run, Ethereum is still an area that can nurture innovation.

For the Layer 2 track, my view is: if you are a consumer-facing application with a large user base, issuing your own Layer 2 or application chain is a good choice. This way you can not only make money by issuing tokens, but also continuously earn income by collecting users' gas fees.

But for those platform-level Layer 2 projects, I'm no longer very interested. I even start to try to refuse to cooperate or participate with this type of project as much as possible.

Mercy: Ecosystems like Solana, Ton, and Base are still receiving a lot of attention. In your judgment, what kind of opportunities will exist in these ecosystems?

Chen Jian: Let me elaborate on them one by one, starting with the Ton ecosystem that everyone is concerned about.

I think the Ton ecosystem is worth continuing to watch. Although its first stage (a large number of ineffective interactions to obtain incentives) may have ended, I have recently come into contact with some projects that can truly engage users, and they have shown new development trends. These projects not only have creativity, but also combine real social attributes and asset-ization capabilities. I think the second growth curve of the Ton ecosystem may come from this type of project.

Next is the Base ecosystem. The main problem with Base is that although the trading volume is very large, the leading projects are still Ethereum-native projects, such as Curve, Aave, and Uniswap. This is more like the migration of old projects, rather than the rise of new projects. Logically speaking, the Base ecosystem should not be prosperous, because it does not issue tokens and does not provide expectations for token issuance. But it can generate such high trading volume and TVL, which is actually very abnormal. This may mean that there are powerful backers or a "conspiracy group" behind it driving it. If you can integrate into the Base ecosystem, you may have good opportunities. But if you simply enter because of the large trading volume on Base, you may fall into a trap.

Finally, let's talk about the Solana ecosystem. Although I am mainly involved in the Ethereum ecosystem, I am not opposed to secondary market trading on Solana. In September last year, I wrote an article analyzing why I chose to buy at $18. But from the perspective of the primary market, the opportunities to participate in the Solana ecosystem may have diminished. We can see that the new projects emerging in the Solana ecosystem recently, the founders almost all have Solana backgrounds, which means the ecosystem has formed a relatively closed loop, and pure outsiders or investors will find it difficult to get involved.

In general, these ecosystems all have their unique opportunities and risks. As an entrepreneur or investor, the key is to choose the appropriate ecosystem to participate in based on your own advantages and judgments. At the same time, you need to always be vigilant and do a good job of risk management, and withdraw at the appropriate time.

III. Discussing OKX's Product Experience and Suggestions

Mercy: The Web3 industry has been eagerly awaiting the next big explosion. From your independent researcher's perspective, what role will OKX play in this process?

Chen Jian: First, I want to make it clear that this is not just because this is an OKX event that I'm saying good things. I really think OKX is a very solid exchange. Through communication with OKX employees, I have deeply felt their love for the company, which stems from their belief that they are making some substantive contributions to the industry.

One of the best examples is the OKX Web3 wallet. Since using this wallet, I almost no longer use other DEXs or Swap tools when buying projects on-chain. The user experience of the OKX Web3 wallet is very smooth. I have a few friends working on the OKX Web3 wallet team, and they respond very promptly to user feedback.

As far as I know, OKX has invested a lot of manpower and cost to refine this wallet product, and currently this wallet is non-profit, and user interactions on it will not be charged additional fees. This determination and courage are admirable, and in addition, the OKX wallet is also exporting technical solutions to other exchanges, which marks that OKX is at the forefront of the transformation from "exchange to wallet" and "Web2 to Web3".

Of course, returning to the exchange itself, we also hope that OKX can continue to focus on its core business, such as trading depth, new coin listings, and mining activities. But in terms of product strength, OKX is undoubtedly very competitive.

In terms of how to attract new users, I think there are two aspects: one is to let users have assets on the chain, and the other is to let users interact and trade on the exchange. OKX has opportunities in both aspects. Especially in the field of scenario-based applications, if a project similar to STEPN that can both attract new users and bring transactions appears, OKX's previous investment and product accumulation will have the opportunity to connect with this traffic.

In general, I think the exchange should not only focus on the trading scenario, but should also invest energy in some forward-looking reserve work, and even some seemingly unprofitable public products. OKX has done a good job in this regard.

Mercy: Do you have any suggestions for the future technical development or product experience of OKX?

Chen Jian: OKX's products, especially the Web3 wallet, have already done quite well, with a very smooth user experience.

But for the exchange itself, I hope that OKX can continue to focus on trading depth, new coin listings, and mining activities to improve its competitiveness in its core business.

In addition, I think OKX can consider further expanding into the payment field. If it can launch a product similar to a Visa card, allowing users to directly use the funds in their exchange account for daily consumption, it will greatly increase user stickiness. This not only allows users to see OKX as a trading tool, but also as a daily life payment solution.

In general, if OKX can realize that users can directly use the funds in the exchange for daily consumption, rather than just using the exchange as a tool to check the market, that will be a very promising development direction.

Risk Disclaimer

This article is for reference only. This article only represents the author's views and does not represent the position of OKX. This article does not intend to provide (i) investment advice or investment recommendations; (ii) an offer or solicitation to buy, sell or hold digital assets; (iii) financial, accounting, legal or tax advice. We do not guarantee the accuracy, completeness or usefulness of such information. Holding digital assets (including stablecoins and Non-Fungible Tokens) involves high risks and may fluctuate significantly. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. Please consult your legal/tax/investment professionals for your specific situation. Please be responsible for understanding and complying with the relevant applicable laws and regulations.