Crypto market Q4 outlook: Cancun upgrade, RWA and game investment logic analysis

Let’s talk about the tokens that we are paying attention to and deploying recently.

Cancun Upgrade

The Cancun upgrade is the most important narrative in recent times. Large-scale narratives often bring about a large amount of emotion and traffic (not because of changes in technology that bring about price changes). However, Cancun has not yet announced a specific time, so there is no synergy. Judging from the current progress, devnet9 is likely to be the last test network, and then it will be a public test network. But there is also a possibility that devnet9 is a short-term test network, and devnet10 may be the final test network.

During the public testnet phase, the likelihood of announcing a specific date (block time) for the Cancun upgrade will become higher. However, this time point will probably be announced in mid-October or November.

The targets of the Cancun upgrade are nothing more than Layer 2, Arbitrum, Optimism, and the recently announced potentially beneficial Metis (Metis plans to become the first decentralized L2 of Ethereum this year, allowing its community to take over key centralized components of the network). And some other Layer2. In addition, Mantle is also promoting the growth of its own network, but the current performance of $MNT is average. The Cancun upgrade is also a boon to Coinbase’s stock price.

In addition, emotional contagion will be transmitted to the protocol on Layer 2. The first choice on Arbitrum is $GMX. $VELO on Optimism may not be able to take on a big role, mainly due to the high inflation of $VELO and the weakness of the Optimism ecosystem. $SNX may be better. But if I were asked to choose only one target among these ecosystems, I would choose $GMX.

why?

There are two main reasons:

One is optimism about the future development of the Arbitrum ecosystem and the further development of GMX as a head protocol (there are also GMX tasks in the Odyssey event);

The second is optimism about future volatility (the contraction of liquidity is slowing down).

Explain the first point in detail.

Arbitrum recently passed a proposal to provide 50M $ARB as a support fund for the ecological protocol, and GMX will definitely get a corresponding share. The main thing is to see whether GMX will promote the development of v2 through $ARB incentives. As GMX deploys additional incentives + airdrop expectations/incentives from other protocols decrease, there is no chance of regaining its former glory.

In addition, I personally think that there is no need to worry about 50M $ARB. On the contrary, this behavior will make the car lighter, which is a good thing for $ARB. (It depends on how many levels you think about)

The advantages and disadvantages of GMX v2 are obvious. The disadvantages are that it is not very friendly to large funds, the liquidity is dispersed, and the support for long-tail assets is not thorough enough. But correspondingly, the advantages of v2 are cost-friendly, better composability, and capital utilization. Higher rates and so on. Overall, I think that although GMX v2 does not meet market expectations, the corresponding changes are all solving some previous problems, which is always a good thing.

All in all, choosing $GMX is a choice that captures the expected reversal.

A few more Arbitrum gossips. I’m also quite optimistic about what Arbitrum is doing recently, such as cooperating with Espresso s to explore shared sequencer solutions; launching XAI (Layer3) to promote the development of the game track (the game track may have a wave in the near future) Small explosion, will be mentioned later), including Offchain Lianchuang also said that gaming is one of Arbitrum’s growth areas; Arbitrum launched Stylus, which supports developers to use traditional EVM tools and WASM-compatible languages (such as Rust, C and C++) Build applications on the Arbitrum Nitro chain. Also, Arbitrum has reopened the Odyssey event. There is actually nothing to say about this event. It does not give airdrops or rewards, only badges, which may need to be eaten together with the 50M $ARB reward.

But in the final analysis, these things are all technical changes, and whether they can trigger price changes remains to be seen from the market.

FXS

$FXS is a coin with strong expectations, but also a difficult coin. Although it has gained widespread market attention through its Lend module mechanism before, now it has returned to the price when Curve crashed.

My personal judgment is that $FXS will not maintain a sustained rise, and its price changes in this round can only rely on the short-term expectations provided by new products. Its subsequent expectations include but are not limited to: frxETH v2 (node operator lending model), Frax v3, FPI (Coinbase CEO believes that Flatcoins "stablecoins that can track inflation rates" will be the next generation of stablecoins), sFRAX (and FXB , RWA), Fraxchain, frxBTC (? Doubtful, implementation will be more difficult, but it appears in the team roadmap) and so on.

From the perspective of fundamental changes to the project, perhaps only sFRAX (if FraxDAO's management model is more structured than MakerDAO) can reverse the decline of $FXS and promote the growth of its stablecoin and positive income. I will keep a close eye on this matter.

Overall, Frax has too many products and too complex wiring, making it difficult to achieve sustainable growth - especially at a time when FRAX supply is shrinking, FraxBP TVL is declining, and frxETH is sluggish.

I am also paying attention to $MKR and $CFG on the RWA track. I think $MKR has a chance to test $1,600 (even higher than Ethereum before the split). If I think about it from a DeFi blue chip perspective, I would also consider $AAVE. At present, $AAVE has been working on solving the problem of $GHO de-anchoring (de-anchoring has no direct impact on the price of $AAVE).

game

Web3 games will be my main area of focus in Q4. Mainly let’s talk about a few coins related to games.

Gas Hero

The main reason for paying attention to Gas Hero is related to Stepn, the producer behind it. They have spent some effort in marketing and creating early popularity, so I personally think that I can pay attention to this game.

Judging from the white paper, Gas Hero has no obvious advantages over other Web3 games, and the gameplay is not very new, just an idle game + Ponzi. Since Gas Hero has not yet announced this part about gold earning, I cannot say whether the game can maintain its popularity through the Ponzi model. At the same time, because $GMT is also complicated to play in the secondary market. If you want to formulate a trading strategy solely from the perspective of Gas Hero consuming $GMT, it is obviously untenable.

Prime

Parallel is a chain game that I like very much. Although there are some flaws in the balance of the game design, the overall game production (you can tell how much money is spent and how many production staff there are) is still good. It is a card battle game with a mode similar to Hearthstone. Card collecting is similar to Magic: The Gathering.

The most important thing is that Parallel has deeply integrated $PRIME into the game economy. For example, in the game, each NFT card can accumulate the reputation of this card through the game. The accumulation of reputation allows players to consume a certain amount of PRIME to mint Echo (phantom card). The number of PRIME consumed by mint phantom cards will be dynamically adjusted according to the demand of mint Echo (for example, the PRIME consumed by NFT cards with high market popularity will be dynamically increased). At the same time, players do not need to purchase expensive cards, they can directly purchase the copied Echo through PRIME/ETH. As the number of players in onboard games continues to grow, the demand for $PRIME will be amplified, forming a flywheel.

However, the investment cycle in $PRIME should be very long, so the "buying point" is very important.

MC

The main trend of Merit Circle is to rename $MC to $BEAM and then split it at 1:100. Beam is built on the Avalanche subnet. Merit Circle claims that Beam has "a robust network of more than 60 partner games, dozens of contributors, developers, tools and investors."

GHST

Aavegotchi chain is coming soon. Although the official said that the test network will be launched in September, there is no news yet as September is almost over. However, judging from official interactions with Polygon, they are working hard to promote this (including launching Game Center). The main problem is that the project is moving too slowly.

other

LINK

Regarding $LINK’s views, I mainly draw on the current price trend of LINK and @jyosamson’s views. Xiusang believes that Chainlink holds the Smartcon conference on October 2 every year, and there may be major announcements. Secondly, the price of $LINK is also closely related to CCIP’s income. Currently, CCIP’s income has no obvious bright spots (it is also related to the downturn on the chain).

SUN

The reason for paying attention to $SOL is that Solana has been very active in hackathons recently, and some European and American KOLs/media have been shouting a lot. From the perspective of hackathon money, the Solana Foundation is relatively wealthy. However, this is not directly related to the $SOL price. The biggest impact on the price of $SOL was the sell-off of FTX. It has been confirmed that the $SOL held by FTX is not fully circulated, and is basically investment shares, so its influence on the market is not that great.

Finally, in this article, the logic corresponding to Token is divided into strong and weak ones, so it is best to read it carefully.