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Bixin Ventures: 2022 Year in Review and Outlook

22-12-31 18:25

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原文标题：《 2022 End of the year review—Bixin Ventures 》

Original source: Bixin Ventures

preface

The cryptocurrency industry saw a DeFi Summer in 2020, bitcoin and Ethereum hit record highs in 2021, followed by NFT, and everyone is looking forward to 2022 for blockchain. But looking back, it's been a rough year for the cryptocurrency industry.

At the start of 2022, monetary and fiscal policies around the world began to tighten in response to inflation, and the macroeconomic environment was deteriorating. The cryptocurrency sector has also experienced the rapid dissolution of Terra Ecosystem in mid-year, and a number of large organizations (such as Three Arrow Capital, Celsius, Blockfi, etc.) have experienced chain liquidation and bankruptcy. The recent FTX/Alameda thunder incident has resulted in significant customer losses and continued volatility in the blockchain market.

Despite the challenging macro environment, the practitioners have shown admirable perseverance and fighting spirit. Developers continue to drive innovation, and Bixin Ventures and other investors continue to find great projects and invest large amounts of money to support the industry. As a difficult year draws to a close, Bixin Ventures will review its recent portfolio to further solidize its investment principles and remind ourselves of our original purpose and mission to drive the industry forward.

Our investment statement

Uphold the investment principles of "decentralization", "no access" and "autonomy". We believe in empowering individuals to own assets such as data through decentralization. As technology advances, governance and decision-making power will also shift from centralized actors to a more widely dispersed group of people, fully stimulating individual creativity and engagement.

Based on the core principles, we focus on the following directions:

1. Infrastructure projects to promote the large-scale application of Web3 network

2. Innovative tools and applications that are economically sustainable and engage billions of active users

As an investment firm, we will grow with the founders while leveraging our expertise and resources in the Asia Pacific region to help the entrepreneurial team grow, including global expansion.

The most exciting event of 2022

Blockchain infrastructure

Blockchain infrastructures are all-encompassing and rich, but they ultimately serve one purpose: how to abstract the underlying blockchain infrastructure so that it is invisible to end users. Applications will drive blockchain adoption by mass users, and the goal of the blockchain infrastructure is to ensure that the diverse needs of those applications are met.

L1s

Layerone(the underlying public chain) is the foundation on which all other applications are built and will continue to interest us in the future. Over the past year, we have invested in:

(1) Two public chains that support Move language:AptosandSui, the team comes from the Diem team with profound technology accumulation. We incubated the first adoptionMoveStarcoin, the language's POW consensus public chain, has gained a lot of experience in the process, using that valuable experience to deploy and deploy developer resources to support the growth of both ecosystems.

(2) Privacy public chainMina, they are building a security layer for Web3 with privacy features, while reducing the computing power requirements of node participants, thus increasing the degree of decentralization.

(3) We also participated in the financing of Scroll, an L2 ecosystem based on ZK-rollup technology. We believe that zero-knowledge proof technology will be the key to achieve trust-free privacy.

(4) To scale up the data availability layer, we invested in Subspace Network, a highly scalable modular blockchain that serves as a shared infrastructure layer for builders across ecosystems.

We are also working on a variety of L1 blockchains to help us understand this niche. You can find out more at the hyperlink above.

Given the different focus of each blockchain design, we recognize that there are many different approaches to blockchain extension:

(1)EthereumL2 provides a cheaper and faster alternative to L1, while retaining the decentralized nature, and of course users can choose to pay directly on L1 if they wish.

(2)CosmosThe blockchain design is centered on interoperability, resulting in the birth of an ecosystem of application chains, each running its own set of validators to manage economic security while connecting via the interblockchain Communication (IBC) protocol.

(3) 2021Solana,AvalancheThe emergence of Alternate Layer in Luna and the strong investor interest in Aptos and Sui, two new public chains based on the Move language, also demonstrate the demand for high performance, high throughput, and low cost blockchains.

middleware

As the underlying blockchain evolves, we foresee a number of new trends emerging that could lead to opportunities in the following segments:

(1) The state of the network will grow, requiring more management

(2) Add more secure on-chain economic value

(3) A stronger connection to the Web2 world will facilitate easier transfer of data from down to up the chain

(4) Users want to transfer value securely across different blockchains, and the demand for interoperability will increase

(5) Better self-care of personal assets

So we think that decentralized storage solutions,Decentralized pledge solutionPermissionless prognosticators, trust-free Bridges, and unmanaged wallet solutions will play a large role in these trends, respectively.

From this, we have invested in:

(1) Arweave, a decentralized storage network that leverages idle disk space

(2) Swell Network, a licenseless, unmanaged and liquid ETH pledge agreement

(3)Switchboard, a permissionless predictor that allows you to create high-performance data sources from any API

(4) Layer Zero, a full-chain interoperation protocol that supports cross-chain communication

(5) Gnosis Safe, a digital asset management platform that allows multi-signature schemes

(6) Meson Network, a bandwidth market on Web3, focuses on integrating and monetizing idle bandwidth resources of long-tail users at a low cost

(7) Safeheron, provider of Multi-party computing (MPC) and Trusted Execution Environment (TEE) technology, improves managed security

(8) Bitkeep, a decentralized multi-chain digital currency wallet, is committed to providing users with safe and convenient one-stop digital asset management services

(9) BloXroute, a high-performance, globally distributed blockchain transport and content distribution network. Similar to CDNS, BloXroute created its own BDN technology to provide on-chain transaction acceleration for Defi traders on Ethereum and BSC.

We have further incubated:

(1) OneKey, an alternative hardware wallet solution for Ledger and Trezor

(2) Openblock, an MPC wallet, allows users to recover accounts through social means without having to keep mnemonics.

Another area of concern is the on-chain data handling class items, such as indexing services, API calls, and so on, which are important for application developers.

Application layer

Going back to the application layer, we believe that user-centered design and value-added should be the core of the underlying logic. Similar to Web2 consumer applications gaining mass adoption after iterating on their product UI/UX, we believe that Web 3 applications need to make the user experience as seamless and straightforward as possible. For example, difficulties in the experience of a new user might include the acquisition of cryptoassets, the application registration process, the need for multiple signature verification, etc. Most notably, the inability to interact with most applications on mobile devices is a huge pain point, resulting in incompatibility with existing user populations.

DeFi

The first wave of Defi Summer shows the real demand for such products, but mass market usability remains a key issue that has not yet been solved.

DEX

There is no question that the need for decentralized exchanges is increasing, especially after they exploded. The majority of trading volume is currently occurring on CEXs simply because of their higher availability. In this case, the next wave of DeFi products will need to have similar or higher availability to attract more users, especially non-encrypted native users.

From this, we have invested in:

(1)Drift protocol, a high-performance decentralized exchange on Solana that will replace the way people execute trades and swaps on CEX. The upcoming Drift v2 version will include several new products, such as spot swaps and lending.

(2) Pontem, a development studio on Aptos, has launched titles such as DEX , the largest AMM model on Aptos; Products such as Liquidswap and Pontem Wallet, a consumer-focused Wallet that is easy to use, inexpensive and seamlessly integrated with most of the apps in the Aptos ecosystem.

derivative

Similarly, we believe that on-chain and decentralisation of derivatives is the future. The underlying problem is that there is currently a lack of mature infrastructure for these applications to thrive as centralized applications. As mentioned above, the progress made in the infrastructure layer could be a turning point in the development of decentralized derivatives.

From this, we have invested in:

(1) Arrow Market, Avalanche's decentralized financial market options agreement, aims to democratize the entire channel of options trading, from market making to brokerage to clearing and settlement.

(2) Rage Trade, the most liquid ETH perpetual trading platform in Arbitrum and Stablecoin Farm. Notably, Rage Trade is supported by Layer Zero, which allows them to unify mobility across multiple chains.

(3) Struct Finance, a derivatives platform that provides users with a way to customize interest rate products and combine them with other products available in the ecosystem to build premium structured products.

Stablecoin

去中心化的经济需要去中心化的Stablecoin。LUNA 暴雷不仅宣告了算法 Stablecoin 的终结，也进一步强调了市场对真正的去中心化 Stablecoin 的需求。尽管目前在 Stablecoin 模型方面有不同程度的去中心化，但我们相信该行业将继续创新并努力实现这一最终目标。

From this, we have invested in:

· Thala，这是一个超额抵押、收益稳定的 Stablecoin 协议，由一篮子链上资产支持。其流动性质押衍生品、流动性池代币、存款收据代币和 RWA 的多样化抵押品确保了其去中心化、抗审查的性质，同时不影响资本效率。

game

Now that we've experienced the last wave of crypto-enabled P2E games, we believe the next wave of games will focus on leveraging blockchain technology to enhance the gaming experience, whether in gaming asset ownership or interoperability or even in esports.

From this, we have invested in:

(1) Shrapnel, coming out with an Avalanche AAA first-person shooter. The game is powered by the next generation of community-driven tools, built on blockchain to provide true ownership.

(2) Star Atlas, a next-generation gaming metauniverse that incorporates state-of-the-art blockchain, real-time calculus, multiplayer video games, and decentralized financial technology.

(3) Midnight Evergreen, a platform for a series of AAA homemade and third-party games for different users. They try to integrate NFT into the classic game experience in a way that enhances the experience.

NFT

We are still in the early stages of the NFT development cycle, with the first real wave of NFT starting with PFP in 2021.NFT will move into art, music, sports, pop culture, branding, and more, while driving the next wave of mainstream consumer adoption, as well as wider acceptance of the importance of decentralized ownership of digital assets.

From this, we have invested in:

· A Few and Far between, the next generation of Web3 experience platforms will include NFT, DeFi, gaming, and other projects in the NEAR ecosystem.

socialize

Now is the perfect time for Web3 social to replace current social media platforms. Data ownership, portability, transparency, and censorship resistance make the Web 3 social Circuit's head item increasingly compelling. Moreover, letting users actually own content will change the current power structure between platforms and content creators.

We have invested in:

· Solcial, a decentralized social network based on Solana. Solcial allows anyone to share content without permission at all, avoids censorship, and rewards users and content creators in a fair way.

Planet, a free open source tool for publishing and tracking web content. Instead of relying on a centralized server, Planet uses IPFS for peer-to-peer content distribution.

Life and entertainment

Web3 can help people incorporate life scenarios into entertainment applications in more creative ways. Having this kind of data will unlock new scenarios and new applications for C-side users.

We have invested in:

Gritti, a Web3 based lifestyle social application, helps users achieve their exercise goals and maintain a healthy lifestyle.

Here are some of the studies we conducted in 2022

Thematic research

Solana Pay and the Future of Web3 Payments

A Deep Dive into Avalanche and Subnets

The Next Big Battle: The Battle for Ethereum Expansion

The Importance of Pledge Aggregators in the Age of PoS

Cosmos Insight: A Focus on Interoperability

《 Stablecoin 的未来》

Solana's Long-Term Viability

Fully Parsing the Move Language: Javascript for Web3

The Censorship Resistance of Bitcoin and Ethereum

GenesysGo: An Important Infrastructure Provider on Neglected Solana

In-depth NFT Market Data, Mining New Trends of NFT Market Iteration

Portfolio in-depth discussion

Bixin Ventures: Why We Invested in Mina
Changers of Perpetual Trade: Drift Protocol

Portfolio Analysis: Sui Led by Mysten

Structure.fi: Bringing real Assets like Stocks and ETFs to Blockchain through tokenization

Bixin Ventures: Why Are We Investing in the Next Generation of Aptos?

Portfolio Analysis: Switchboard

Review and prospect

Bixin Ventures started investing aggressively with its own capital about 18 months ago, and now has more than 20 employees in China, the United States, Singapore, Eastern Europe and other locations. We stand with great founders and participate in their financing. We want to continue to support more startups as the market enters a downturn and startup teams focus on developing apps. We are also proud of the development of our internal research team, which has made us a better investor in this sector.

Looking ahead to 2023, we expect to provide more targeted assistance to our existing portfolio and will actively seek and hire post-investment managers for internal support.