Standard Crypto Partner: Now is the best bear market cycle in history

Organize & Compile: Deep Tide TechFlow

This episode of The Block interviewed Standard Crypto co-founder Alok Vasudev. In this conversation, Alok discusses the changes and trends of the bear market and the reasons for the market changes. Alok believes that every crypto cycle will have a new blockchain application to drive the bull market. They also discussed the potential of encrypted games and the economic crisis, as well as the combination of AI, ZK and blockchain.

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The following is the main content of this dialogue, which was listened, translated and organized by Shenchao, and the main points of view were output:

Host: Frank Chaparro, The Block

Speaker: Alok Vasudev, Co-founder of Standard Crypto

Original Title: Crypto's 'Best Bear Market Of All-Time'

Podcast: The Block

Show: Link

Bull-bear evolution trend and application layer explosion

• Alok discusses some changes and trends in the bear market. He mentioned that in a bear market, the speed of transactions will slow down, but the quality of transactions will become better. He believes that the participants in the current market are more serious, no longer participating because they heard that the encryption field is cool or chasing hype, and now there are many founders in the market who are entering the encryption field for the second or third time. With greater experience and better understanding.
• Frank and Alok discuss the reasons for the market shift. Alok believes that BlackRock CEO Larry Fink has changed his views on Bitcoin and cryptocurrencies, which may be an important factor in the market change. Alok mentioned that the crypto market may have been undervalued in November and December last year, because cryptocurrencies and blockchain technology are the right direction of historical development, and the market should reflect the equilibrium price of these assets based on the progress made.
• Trends about the crypto market. Alok believes that every crypto cycle will have a new blockchain application fueling the bull market. For example, the bull market in 2013 was mainly driven by Bitcoin, the bull market in 2017 was driven by tokens and ICOs, and the bull market in 2021 was driven by DeFi protocols and NFTs. He believes that the next cycle may be driven by new applications, because we are no longer limited by the infrastructure as before. **
• They discuss the biggest hurdles preventing application layer explosion. Alok believes that in order for more consumer-grade applications to work, someone first needs to have a wallet. He believes that as more people start using wallets, it should become less difficult to use and become as easy as using a browser. This means that cryptocurrency wallets should become more user-friendly, easy to access and operate, thereby promoting more people to participate in the use of cryptocurrencies.
• Alok mentions the concept of "mini-network effects," the idea that when the number of users of a new product or service increases, so does the value of that product or service. A network effect is a common economic phenomenon that states that the value of a product or service is directly proportional to the number of its users.
• Alok's point is that there are enough users now to start forming these small network effects in new products. This means that as more users start using a new product or service, such as a cryptocurrency wallet or app, the value of that product or service increases. This added value may manifest as a better user experience, more features or services, higher security, etc.
• Alok believes that social networks need to be relatively niche from the start, not to bring in a lot of celebrities from the beginning, and successful social networks are those that can cultivate their own celebrities, not those that bring in celebrities and ask them to bring their own fans network of.
• Alok believes that the big opportunity for social networks is to find out the Status Game of tomorrow, which may include NFT and other encryption functions. He thinks the crypto-centric social network is a cool place because it fits all the boxes, it's still relatively niche, but he thinks many crypto people are on the right side of history.

The Potential of Crypto Games and the Economic Crisis

• Alok and Frank turn to a discussion about games. Alok mentioned an interesting investment strategy of looking back at the last market cycle to identify projects that resonated but might not have been entirely successful. He believes that these projects may be good investment opportunities. Alok gave two examples, Cryptokitties and Axie Infinity. Both games succeeded to a degree, but had some flaws. He believes that these games demonstrate the great potential of gaming in the cryptocurrency market.
• They discuss the economic crises in the game and how to manage them. Alok believes that the economic crisis in the game may be due to the decline of token prices, market fluctuations or other factors. He mentioned that in order to deal with these crises, game developers need to take some measures to maintain the attractiveness of the game. He believes that financialization is an effective solution that can help attract players and provide them with additional incentives.
• Alok also mentioned that financialization in cryptocurrencies and games can be achieved through token rewards, token economics, DeFi protocols, etc. These financial means can help game developers attract players and provide them with additional incentives. He believes that this is an effective way to help the game maintain its attractiveness in the face of token price pressure.
• Alok believes that Axie Infinity is an important milestone for many game developers, prompting them to delve deeper into the cryptocurrency field. He mentioned that the success of Axie Infinity shows that games can remain attractive even when token prices are under pressure. He believes this is because in-game monetization can help attract players and provide them with additional incentives.

The combination of AI, ZK and blockchain

• Alok introduced their investment philosophy, emphasizing that they are more concerned with finding potential entrepreneurs than pursuing a specific investment theory. They believe that the key to investment success is to find potential entrepreneurs, rather than pursuing specific investment theories.
• They discuss the intersection of AI and crypto, which Alok sees as deeply connected. Alok mentioned that both artificial intelligence and encryption industries are technology-driven fields, they are both developing rapidly, and both have great potential. He believes that both fields are exploring new business models and application scenarios, which may have a profound impact on the entire society and economy.
• Both artificial intelligence and encryption require large amounts of data and computing power. The field of encryption can provide artificial intelligence with a secure, transparent and decentralized data exchange and computing platform. At the same time, artificial intelligence can provide the encryption industry with smarter and more efficient transactions and contract execution.
• Alok also mentioned that artificial intelligence can help the encryption field to better predict market dynamics and risks, and the encryption field can provide artificial intelligence with a safer and more efficient payment and transaction platform.
• With the development of blockchain and encryption industry technology, NPCs in the game may have their own bank accounts and wealth. He believes that this will provide more opportunities for innovation and interaction between game developers and players.
• For example, NPCs may conduct transactions, investments, or other financial activities with players. This situation will make the game more interesting and realistic. Players can interact more complexly with NPCs and experience a more realistic game world. At the same time, this will also provide game developers with more business opportunities, such as advertising, promotion or other commercial activities through NPCs.
• Alok Vasudev discusses the impact of technological developments on the crypto market, particularly the advancement of zero-knowledge proof (ZK) technology. Alok mentioned that zero-knowledge proofs allow one direction to prove to another that a statement is true without revealing any other information. This technology has many applications in the field of encryption, such as protecting the privacy of transactions and verifying the correctness of smart contracts.
• Alok believes that ZK technology will enhance trust in the market. By using ZK technology, both parties to the transaction can verify the correctness of the transaction without revealing any other information. This will help increase transparency and trust in the market. Second, ZK technology will help improve the efficiency of the market. By using ZK technology, both parties to the transaction can complete the transaction more quickly and securely. This will help improve the liquidity and speed of transactions in the market.
• Finally, ZK technology will help expand the range of applications in the market. By using ZK technology, the encryption field can better meet the privacy and security needs of users. This will help to attract more users into the market and expand the application scope of the market.

The impact of market cycles on technology research and development and DeFi

• Alok believes that market cycles play an important role in promoting technology research and development. Market cycles can inject funds into technology research and development, he explained. During a bull market, the price of cryptocurrencies rises, and the assets of market participants increase in value along with it. This means that more funds can be used for technology research and development. These additional funds can help develop new technologies, optimize existing technologies, or expand the application of technologies.
• Alok pointed out that the progress of the encryption market has far exceeded the level of the past, the market fundamentals are healthier, and the encryption market now has more participants, more applications, more technological innovation, more compliance, etc. .
• Alok singled out DeFi protocols as ideal venture capital investments. Alok believes that DeFi protocols have the following advantages:

• Low Capital Requirements: DeFi protocols generally do not require large capital investments because they are based on blockchain technology and do not require traditional centralized infrastructure. This makes them ideal for venture capital investments.
• Strong Defensibility: DeFi protocols are generally highly defensible because they are decentralized and not easily attacked or manipulated. This makes them more stable and secure in the market.
• HIGH OPERATING Leverage: DeFi protocols typically have high operating leverage, as they have almost no operating expenses and users bear transaction fees. This allows them to operate more efficiently and generate higher returns.

• Alok also mentioned that the revenue of DeFi protocols is not the same as that of software companies. Software companies usually need to bear high operating expenses, while DeFi protocols have almost no operating expenses, and users bear transaction fees. This enables DeFi protocols to operate more efficiently and earn higher returns. Alok believes that the DeFi protocol is the best business model ever.
• Alok also expressed expectations for a Bitcoin revival. He believes that Bitcoin may be going through a renaissance period. He mentioned that Bitcoin used to be a vibrant ecosystem that attracted many developers and technology enthusiasts. However, over time, this vigor fades away. But he believes bitcoin is recapturing that dynamism, and that many new entrants to the crypto market may not realize its potential.