The resonance of Music NFT

Let’s be honest here. Web3, Web4,… Webn 🧐 I don’t think that you care, neither do I. We are here for the Music, it’s all that matter! “Will/how the changes impact us as a fan or an artist” is a different story and maybe it doesn’t even matter to listeners.

If you are curious, let’s dive in!

Just a short brief

(i) Art + NFT, Game + NFT and now Music + NFT

What was the last time you opened music from a cassette or DVD?

You may not probably recall. That’s the beauty when technology meets music. It comes with the promise of giving artists more chances to thrive and giving users a better experience with music, not just listening but also engagement.

The rise of NFT in 2021 has seen the birth of a new model in the music industry, altering the power position of the parties that keep the wheel running in Web2: Publishers and Record labels to the hands of artists and fans.

(ii) Artists don’t get paid as they deserve

In the current system, artists only receive about 12% of the royalty fees for their products, and most of it goes to the pockets of major record labels or music streaming platforms (Spotify, Apple Music, etc.). Meanwhile, artists at Web3 can earn 100% of their profits from selling their NFTs. In addition, artists also receive a royalty fee, determined by artists, for every time users trade NFT.

Problems there. Worth changing if Web3 can.

Digging into the current problems of Web2 music

(i) Power has never been in the hands of artists or fan

Before the internet era, Record Labels is the third wheel of the relationship between fans and artists 

In the 60s and 70s, musicians needed to be contracted by record labels for song rights. Therefore, record labels monopolize the entire industry because they have money, own production studios and provide distribution channels. Those are things that are luxuries for artists these days. Thus, royalties for recordings by musicians are the price in exchange for these services. Monopoly always comes with the hand of power and manipulation. At this time, artists and fans are both depended on the Record labels.

⚠️ Artists → Record labels → Fan

After the internet came, Publishers replaced Record labels to become the next third wheel 

Since the 2000s, the popularity of desktop computers and MP3s have opened new doors for artists as they can now compose at home and distribute on the Internet. With the opening of the streaming industry, many distribution service platforms like Spotify, YouTube, etc., have become alternatives for Record labels. Record labels since then have lost their exclusive privileges to production and distribution.

But again, power and manipulation don’t just disappear; it just transfers from one to another. Now, the primary control between artists and fans is the music streaming platforms.

⚠️ Artists → Publishers → Fan

(ii) Artists’ loss of ownership, a higher requirement for entry and a lower income

Fundraising: Record labels dominate the fundraising market, artists have nowhere to go.

Though with the development of technology allowing artists to be independent in producing music, in 2021, Record labels still account for 70.1% of the market share of the entire music industry compared to independent artists, so-called indie artists. The record labels remain the key player capable of providing artists with resources to produce music.

Ownership: Copyrights mostly belong to record labels and streaming platforms.

Before the Internet era, the Record labels monopolized the supply chain for the music industry, dominating the production and distribution of music products in the market. As the Internet became more popular, the Record labels’ monopoly in distribution was replaced by music streaming platforms. However, as mentioned above, the Record labels are still crucial in the production stage.

Artists depend on third parties in both the production and distribution phases. Thus, they need to share music copyrights with Record labels or Streaming platforms.

Income: artist’s income is dominated by Record labels and Web2 streaming platforms.

When artists lose a lot of copyrights to Record labels and streaming platforms, their share is as low as 12% royalties from their music.

Next, 33% of all new Spotify artists discovered happens on playlists personalized by Spotify for users. “Personalized for users” is a fancy word, but it’s actually Spotify’s playlists. Like other social media platforms, they navigate what we listen and what they want us to listen. Control from streaming platforms has become a significant barrier for artists as the review and selection processes become more challenging on those platforms. Because, as you know, that’s their golden egg for maximizing profits.

Web3 and its better offers to take over Web2 music

(i) Power back in hands of artists and fan

Web3 cut off all third wheels, Fans and Artists are closer than ever

Finally, we see the association between artists and fans have changed into a two-way relationship. Now, fans can directly contribute to the artist’s success with NFT through activities such as fundraising, voting on the development of the campaign, and more.

💡 Artist ↔ Fan

Model artist-direct-to-fan works in traditional music before

  • Neil Young, who has turned his back on Spotify and built his own streaming platform, earned himself 25,000 subscription fans with a total of $600,000 in membership fees yearly.
  • Another artist is Melissa Etheridge, who launched her own subscription platform and earned over $500,000 annually.

(ii) Artists take back ownership, entry as will and earn more income

Fundraising: No need for record labels, artists have fans

With the innovation of Web3 technology, the music industry model has shifted power from intermediaries to musicians and fans. Music NFT becomes a tool for artists to raise capital and distribute directly to their fans. Conversely, the fans themselves can become a “self-record label” for the artist by investing in that artist’s music products and receiving a portion of their copyrights in return.

Ownership: Third wheels have gone, copyrights are back in the hands of artists (and fans as will)

Artists can now raise money through fans without needing Record labels; artists can also distribute their own music on Web3 streaming platforms without needing a Publisher on Web2. And guess what? When they no longer depend on any intermediary to bring their work to the audience, the artist has full ownership and control over the work’s copyright.

Income: No more domination means a higher income

Web3 allows fans to invest in an artist’s NFT, unlocking many other income sources for artists. For example, Alan Walker collaborated with Web3 artist fundraising platform Corite to launch his NFT collection called Alan Walker Origins. In particular, users need to own 25 NFTs corresponding to the pieces of music to combine into one perfect song. The Alan Walker Origins campaign raised $355,380 for the artist. Besides allowing the artist to raise funds from the fan community, the artist can also receive a portion of the fee from each NFT transaction.

In 2021 alone, NFT has helped big-name artists raise millions of dollars in sales. Of which 3LAU earned $11.7 million for the Ultraviolet collection, Steve Aoki took in $5.8 million from the WarNymph Collection, Vol. 1 and $4.25 million for the Dream Catcher.

The new model of Web3 Music

Record labels will continue to fall further in their position with the artist. With tools and platforms like Corite and Audius, NFT enables a more direct and independent way of funding and go-to-market through Music NFT sales. By empowering fans to directly become individuals/communities to perform Publishers tasks like marketing, music distribution, or even joining the artists’ development plan for their creation and campaign, fans minimize Publishers’ power over artists’ success. These new and exciting tools allow artists to increase the value of their work while maintaining ownership of their music.

What I found challenging for Web3 Music

(i) New tech and highly independent may not be for everyone

Considering that being an artist is a profession, the ‘direct to the fan’ approach is not something that works for every artist. Daniel Allan is a case that prefers to go for third parties rather than do-it-himself in Web3. More independence in creative power, more ownership, and potentially higher income are undeniable benefits of Web3, but that’s in exchange for a much larger workload.

While third parties may no longer be the sole gatekeepers in production and distribution, their value lies in experience, resources, and connections for achieving large-scale success in the music industry.

In addition, most artists who’ve successfully raised a handful of money in Web3 are well-known artists in the tradition. At the same time, the target audience for Web3 is new and for unknown artists, it is tough for them to do everything by themselves. As mentioned above, 1/3 of new artists are discovered through the suggestions of streaming platforms. Some artists are better trying their luck on Web2 instead of Web3 streaming platforms with a limited number of users.

(ii) Things don’t change overnight, major income for artists’ products still comes from Web2 streaming

There are many alternative ways for artists to make money on Web3. However, their music products’ primary income source still comes mainly from major Streaming platforms such as Spotify, Apple Music, etc. In Web3 royalty platforms such as Corite or Audius, the artist can share revenue with NFT owners through the streaming revenue on Web2 Streaming platforms. As noted above, it doesn’t bring many benefits for users especially when Web2 media are still dominating the supply.

(iii) It’s still a new technology, hacks and exploits are inevitable

The hack happened to the Audius platform that caused a total loss of $6M in the community pool of Audius. The hacker posted four governance proposals to the Audius project, and one of them was approved. The fact that hackers are able to steal and sell tokens is a testament to the potential risks of this technology to the interests of the artists and fans involved. In this case, the artist will need to hold and stake tokens to unlock more beneficial features.

What if a more sophisticated hack led to malicious admin proposals to the platform? Users will suffer hefty losses. This is often seen in the cryptocurrency market.

(iv) Let’s be honest here. Fans just want music and that has no problem in Web2

  • The majority of current users of Music NFT products are crypto-native.
  • In users’ views, NFT products have high prices, accompanied by other costs such as gas-fee.
  • Lack of benefits and guidance are users’ biggest concerns.
  • Streaming platforms like Spotify are doing just fine by optimizing the experience for both artists and users.

The Music NFT landscape

💡 Web3 is gradually replacing most of the roles in Web2 Music, including both production (Support tools, news and research) and distribution (streaming platform, community, and other logistical tasks required by artist).

Closing thoughts

(i) Small market, good growth, positive experiment with a similar model for Web3 gaming

Music NFT has a total market share of $1.2B, approximately 1/24 times that of the digital music industry which has a total market capitalization of up to $29.4B. On Spotify, there are 11 million artists, and Apple Music with more than 5 million people. So far, the number of artists participating in Web3/NFT in general is just under 30,000 people.

As more and more artists realize that they similarly can become businessmen for the products they create, a form of direct artist-to-fan experience is emerging more than ever. According to the ConsenSys report, the number of Metamask wallet addresses has recently bloomed, reaching 30 million monthly active users, a growth of 600% in just 14 months.

Music NFT paradigm shift is similar to the current GameFi model. More and more people understand and use web3 after the success of GameFi and NFT. Thus, many traditional markets will transform into similar models applied by GameFi. If Music NFT can solve the above concerns effectively, it will be another attractive market for not only artists but also businesses, and fans.

(ii) Web3 sounds great, but we are here for the music. How/when will Web3 music mass adoption?

  • We learned from GameFi that the game experience should come first, not the monetization factor. Music NFT is no different. The monetization factor plays an incentive role, and we stay for the music.
  • Behind Spotify and Apple Music’s success stories is the massive data collection and personalization for a better user experience in listening to music and choosing songs.
  • To do this, Web3 must onboard as many indie artists as possible to join.
  • Web3 platforms need to provide utmost support for artists’ needs as it’s not only about better income but also more convenience for artists in logistics and product promotion. Let’s assume artists’ work is just performance.
  • Web3 streaming platforms must be widely promoted, and the apps’ infrastructure must be simple to optimize the user experience.

The more Web3 tooling supports artists, the more artists join Web3. Thus, Web3 will be further enhanced in terms of user data, optimizing like what Web2 is doing now. Then it will be the time for mass adoption.

Meta-transaction Relayer: An Overview


What is your most painful experience when starting your crypto journey?

Being rugged and scammed? Messing up when trying to distinguish between a passphrase and a private key?

How about the pain of staying up until 3 AM to ape in a potential alpha but then witnessing your transaction fail because of “Not enough gas”?


These are just some of thousands of trouble for crypto newbies. And from here, a solution called “relayer” has been born.


In blockchain, relayer can be:

(i) A place where individual orders are aggregated to an orderbook for users to store and find matched orders off-chain; only final transaction is submitted on-chain. An example of this is 0x.

(ii) A third party executing transactions on behalf of users and paying platform-native token in exchange for a small fee of service (denominated in other currency).

(iii) A third party being in charge of “connecting” different blockchain platforms. These relayers are used in cross-chain projects such as LayerZero or RelayChain.

In this article, we will only discuss the second meaning of a relayer.

Under the hood, such relayer is working based on the so-called meta-transaction, or gasless transaction.

Below is how Gas Station Network (GSN), a system of meta-transaction relayers on Ethereum, operate.

Basically, meta-transactions are transactions in which there is data about an actual transaction inside to be executed which will be created and signed by an individual, and then sent to the relayer. There will be a smart contract (paymaster) responsible for gas payment in exchange for a service fee. A smart contract called forwarder verifies the sender’s signature and forwards the request to a recipient contract. Recipient contract here is the final “destination” where the sender wants to interact with his DApps.


To avoid being criticized the decentralization philosophy of blockchain, relayers and paymasters will work independently and competitively on the network of RelayHub.

On Solana, the way meta-transactions work is quite different as users can directly specify who the gas payers are. This assignee will have to sign the transaction for it to be approved, thereby reducing the verification and confirmation process of the forwarder as in the GSN system.

Take an example from Octane (in alpha stage), the process occurs as follows:


(i) First, user A will add to their transaction (txn) two instructions: one is to transfer the fee to the relayer, the other is to specify the amount to be transferred to user B (in this case, we need to assume that user A’s wallet has enough funds to pay relayer fees and transfer money to user B, but since there is no SOL available in the wallet, user A needs to go through relayer to send money to user B)

(ii) User A also needs to set the payer as the relayer, instead of him/herself

(iii) User A signs txn

(iv) User A sends this txn to relayer’s API server

(v) Relayer will confirm if it received the fee

(vi) If yes, relayer will sign and send the transaction back to user A

(vii) User A will add the relayer’s signature into the transaction and submit it to the Solana network

Pros and cons of meta-transactions

The main benefit of meta-transactions is the minimalization of user experience when beginning their crypto journey. Users do not need to own any tokens prior to interacting with dApp and web3. The use of meta-transactions may not require non-custodial wallet but developers would need a key storage system or password that removes technical obstacles of such decentralized wallet. Moreover, having a third-party for transaction settlement can help reduce some burdens on the blockchain network as mutiple transactions from a DApp can be processed off-chain and finalized to only one transaction to submit on-chain.

However, meta-transaction relayers still face two big drawbacks:

  • Not all smart contracts support meta-transactions
  • Although these protocols can use a network of relayers to decentralize the process of validating transactions, this cannot totally guarantee that the network will be secure and that there will be no corruption among relayer servers

Why relayer is important in crypto?

Besides GSN, some other DeFi protocols do apply meta-transactions to make their UX smoother. Zero Swap, a liquidity aggregator from AMMs on 0x, or Colony, an infrastructure project for DAOs have utilized meta-transactions. Gelato Network, a decentralized network of bots for automatic execution of smart contracts, has implemented meta-transaction in their infrastructure. Gelato connects developers who need to automate their smart contracts with the infrastructure operators who are responsible for running bots to receive corresponding service fees. To complete user request, Gelato needs to pay gas fee to interact with the blockchain, and meta-transaction relayer will be used here to fulfill such tasks.


However, building an in-house system of meta-transaction relayers for meta-transaction will consume a lot of resources in terms of time and effort for crypto projects. Therefore, there are meta-transactions solutions built to optimize this process, of which the most prominent names are GSN (mentioned above) and Biconomy.

Biconomy supports both DeFi and NFT meta-transactions. One of their three main products – Gasless Transactions – allow projects to sponsor their users for gas fees – either it is DeFi or NFT transaction. In August 2021, the fashion brand D&G and UNXD, an NFT platform for luxury products have collaborated with Biconomy to launch the Glass Box NFT project, including NFTs which give users access to their metaverse as well as real-life benefits from D&G.


In the beginning of this year, 100Thieves, a lifestyle brand, has also worked with Biconomy for a free NFT airdrop to their community.


Although relayers still have a few disadvantages that need to be overcome, its role in making the experience on DApps less “bumpy” is undeniably important, especially in the context of crypto projects that are having a hard time expanding their customer base due to high technical knowledge required by these users.

Building a relayer can be compared to building an automatic toll collection. Although it is expensive and labor-intensive at first, the benefits of traffic infrastructure and network connection will be smoother and more efficient in the future.

Blockchain Investment Landscape: An Overview

This article serves the purpose of expressing our arguments on a data-based view of the fundraising market over time to present an outlook for the potential growth of different categories within the cryptocurrency market in the upcoming years.
The last quarter of 2022 has set a new record for the amount of capital raised in the crypto industry, recorded at $10B, thereby showing a great expectation of venture capital funds for this dynamic market.

The fact that billions of dollars are poured into blockchain startups is still leaving many doubts among investors as to whether this is a “crypto bubble” and whether cryptocurrency assets are being traded at an unreasonable and unsustainable price? 

We’ll compare the fundraising market in bull/bear market cycles to answer this question. Here, we will distinguish funding rounds according to 2 main stages: Pre-mature and Mature.

  • Pre-seed round
  • Seed round
  • Strategic round
Mature round
  • Series round

Market Cycle

Market cycles refers to a trend or pattern that occurs during different market periods or trading environments. Market cycles are made up of two aspects, the highest and the lowest price, and the current cryptocurrency market is affected by Bitcoin price.

In each market cycle, we often see trends forming in a particular sector/category due to outgrowth innovation, leading to some asset classes becoming dominant because their business conditions are suitable for growing conditions.

Here we will discuss five main groups of capital market categories, including Infrastructure, CeFi, DeFi, Web3, NFT, according to data obtained from Dove Metrics.

Capital Flow

Building the Infrastructure

2017 was the stage of blockchain application incubation and CeFi then was the safe choice for venture capital funds when it received the most investment and five out of eight projects came from the expansion and growth phase (series rounds). Since CeFi projects have an operation model more similar to those of traditional businesses, VCs can partially rest assured that their investment in these series rounds can potentially make some returns.

New decentralized applications (dApps) began to form during this period since the opening of the first smart contract platform, Ethereum. Thus, this is the period when VCs prioritise spraying capital for infrastructure projects as the foundational platforms are still in their infancy; moreover, this will be the first and best place to attract liquidity when dApps are built on top of them and bring viable adoption to blockchain technology. 

The other reason to bet on platform projects was largely due to the congestion on Ethereum when the CryptoKitties application was born. Investment funds at the time realized the promise of decentralized applications, and at the same time, they know that more smart contract platforms are needed to overcome the bottlenecks on Ethereum. This has fueled the massive growth of platform tokens in 2017.

Building the economy

As many smart contract platforms were built to solve the current scalability problem of Ethereum, notably Cardano, Solana, Polkadot, etc., the next destination will be the building of the economy for users. Although CeFi is still the category that received the most investments during 2018 – 2020, Infrastructure and DeFi are the two categories with the most projects receiving investment, especially projects from pre-mature rounds.

Since mid-2019, DeFi has been raised as an alternative solution for traditional banks, allowing users to transact, save and earn profits based on banking-like but non-banking financial services. Many of DeFi solutions are novel and can offer higher returns than the centralized financial market.

The DeFi wave rose shortly after June 2020 which was catalyzed by the launch of the liquidity farming program $COMP, the governance token of Compound in May 2020. The event also kicks off the DeFi Summer, when other DeFi projects distribute their tokens through liquidity mining and create more and more profit opportunities for their investors.

Afterwards, the number of DeFi projects have been continuously rising, therefore capturing attention from VCs. By the end of 2020, DeFi took the lead in the number of projects being invested. At this time, VCs showed great confidence in this new category and thus, raising the bet for this category in hope of enormous returns.

Building ownership application

With DeFi providing a decentralized exchange solution for users, NFT emerged as a solution for content creators in areas such as music, pictures, or other artistic content. NFT is a unique asset class applied to digital assets as an intellectual property license.

By 2021, NFT was getting a lot of attention from investment funds as NFT collections like CryptoPunks, Bored Ape Yacht Club have attracted mainstream media and these projects reach the level of billion-dollar valuation.

As of May 2021, only 72 projects in the NFTs segment have successfully secured their fundraising with a total funding value of $777M compared to 180 DeFi projects at a total value of $645M. However, this number has changed significantly by the end of the year since the amount of money raised for NFT-related projects only in pre-mature rounds has risen to the 2nd place – with 151 more projects being funded.

What can we see from past data?

Capital flows from venture capital funds exemplify the appropriate development of the market, beginning with the formation of the underlying platform (Infrastructure), followed by the creation of an economic system (DeFi), and then applications for content ownership (NFT). 

Infrastructure → Economic system (DeFi) → Content Ownership (NFT)

In each stage of the market, new categories are created and will be the trend to lead the market in terms of capital flow as well as the number of new projects being born. Categories that are incubated and developed after each market cycle tend to grow more stably, and as a result, their ROI for VCs will be more saturated. 

What’s coming next?

The success of the Infrastructure category has caused a gradual shift of many VCs from the segment of CeFi to Infrastructure, reflected in the total amount of capital that this category has raised in expansion rounds. The number of Infrastructure projects going into operation and revenue expansion increases, opening up a more stable, long-term profits for VCs when pouring capital into such viable models.

Besides, the smart contract platform system has entered the stage of stable development and is able to scale to a large number of users; the next possibility will be in layer applications. Prominent in the second half of 2022 came from Web3 applications, more specifically GameFi like Axie Infinity which created a massive wave of attracting many users to enter the market.

This has driven the Web3 category to receive more attention from VCs in the past two quarters, accounting for 31.5% of the total invested projects. This has driven the Web3 category to receive more attention from VCs in the past two quarters, accounting for 31.5% of the total invested projects. Web3 is currently leading in the number of projects, and the amount of money raised for pre-mature rounds. Primarily, GameFi/Metaverse accounted for 49.8% of the total number of projects funded in the Web3 category (source: DoveMetrics).

With more and more people using NFTs, these digital assets are heralding a new era of the digital world – the Metaverse era. GameFi/Metaverse can be a gateway with a more accessible approach for the masses who are not into or understand blockchain products. Web3 application layer is a combination of DeFi and NFT, an upgrade of User-Generated Content platforms like Facebook, Youtube, etc. Users can now own the content they created on Web3 and can be traded based on their demands without being controlled by any other third parties.

Besides, Web3 promises to bring many benefits for enterprises, including reducing operation processes and lowering expenses when accessing user data. Traditional gaming studios have proven this when moving their businesses up on Web3.

Final thoughts

Infrastructure → Economic system (DeFi) → Content Ownership (NFT) → Web3

In conclustion, the metaverse is formed by a collection of countless user data, and every user would only want to protect their privacy, i.e. not allowing it to be centralized or owned by third-party businesses or individuals. Therefore, web3 is considered as an open gate for the realization of the metaverse through a decentralized system.

During this bearish phase of the market, as the father of Web2 – Tim O’Reilly believes that Web3 would really emerge after the burst of the crypto bubble, with the backing from VCs, quality projects in the web3 niche, especially the infrastructure platforms serving the metaverse like GameFi and will have great potential to skyrocket in the future. In addition, many other Web3 projects are working on the music industry and social networks, etc., all have similar potential that we should look forward to.

Privacy Blockchain At A Glance



Examples used in this blog are simplified to help make technical concepts more understandable to our audiences. Therefore, please embrace them with an open mind.



Five o’clock in the morning.

Annoyingly loud police siren in front of the house.

“You’re arrested”.

Jack woke up and could not understand what was happening. Everything was like a real-life nightmare.

He was drawn out and treated as a criminal.

Totally helpless. He was innocent, but then how come his age, his date of birth, and even his bank account number all coincided with those of the criminal, just like somebody else has lived his life.

A stolen life.

The privacy of Jack has been severely violated, and now he is facing imprisonment for the rest of his life. Nevertheless, surprisingly, just days before the verdict is brought in, the jury has received an anonymous letter saying that Jack was not the true criminal and that the writer knows where the true criminal is but cannot reveal the name directly in this letter. If the jury and the letter’s writer arrange a private meeting, it will be difficult to make sure that they do not collude to accuse another innocent person of committing this crime.

Then how can the anonymous writer secretly reveal the true identity of the criminal to the jury in a more transparent manner?

Transparency can be ensured by blockchain, and privacy can be satisfied through some more specific mechanisms.

In this blog, we will introduce our readers to the mechanisms currently being used by some blockchain platforms to ensure the privacy of users in their networks.

Trusted Execution Environments (TEEs)

Basically, in a Trusted Execution Environment (TEE), the data will be isolated from other parts of the processor, thereby protecting them from attacks from outside actors. Regarding blockchain, this means that validators cannot reach the data computation under the hood when they are being used. Secret Network and Oasis Network are the platform blockchains that use this technology, specifically the SGX (Software Guard Extensions) processor of Intel, dedicated to providing a TEE for sensitive data.


Therefore, if the anonymous writer contacted the jury to reveal information about the real culprit through such blockchain platforms, he would not need to worry much about either the authenticity of the content in the letter to the jury or the information leakage as it is protected within the TEEs and the public can rest assured that neither party – the writer or the jury – are colluding to blame anyone else for doing the crimes.

However, there are still issues with TEEs. The SGX processor assumes that only the central processing unit (CPU) is trusted, so storing confidential information here and isolating them would be a safe solution. Taking advantage of this assumption, hackers will not directly attack the computer’s security system but instead take a bypass, attacking other channels of the system. This process can also be known as a side-channel attack.1

Another problem when applying TEEs in the blockchain is rollback attack. The main cause of this problem is that the state of a blockchain can always be rewinded, and the “privacy” provided by TEEs only exacerbates the issue,2 allowing them to leak confidential data to other people.


Mixnet is a mechanism used by the NYM Network. In the mixnet, the route of transactions will be “erased”, making it impossible for outsiders to find out detailed information of these transactions.

The mixnet is like an upgraded version of Onion Routing, a method of ensuring anonymity when communicating within a computer system. In this method, a message will be divided into many small packets, and these small packets will be encrypted through many layers in the process of being delivered to the destination. Mixnet goes a step further with this approach by re-ordering the encrypted packets, making it even harder to decrypt the original message.


After arriving at the destination, layers of encryption will be peeled off and arranged to the original for the sake of decrypting the original message.


For the anonymous writer, he would write a letter revealing the identity of the true criminal to the jury, then tear them down, mix them up and pack those pieces with three layers of envelopes and three special glues. Each time they pass through a mail station, only one layer of envelope will be peeled off. When all of these pieces reach the jury’s mailbox, the last envelope will be completely removed, and there will be a small hint for the jury to rearrange them in their right order so that they can read the original message.

Another transparency mechanism of this type is also used by Tornado Cash. Tornado Cash improves transaction privacy by breaking the on-chain link between the source and destination addresses. It uses a smart contract that accepts deposits of ETH and other tokens from one address and allows them to withdraw funds from another. When the transaction is completed, the transaction route from the sender to the receiver will be broken. However, privacy in this mechanism cannot be guaranteed absolutely.3

Ring Signatures

This is a method used by Monero, one of the pioneering privacy blockchain platforms in the space.

Back to Jack’s story, there will be an additional detail which says that the anonymous sender is actually a member of the Triads, whose leader is the real culprit in the crime which Jack is facing. The anonymous sender is feeling guilty and he wants to tell the truth but does not want to reveal his identity. On behalf of the Triads gang, he collected the public keys of its members and combined them with his private key to sign the letter sent to the jury. Thus, the jury can be confident that this letter was written by a member of the Triad, but no one, including other members of the gang, could know the identity of the sender of this letter. 


The example above is a simplified demonstration of how ring signatures operate.

In the Monero network, privacy is also ensured through the use of stealth addresses. Stealth addresses are used both by the sender and recipient and can be used for only one time.

Zero-knowledge proof (ZKP)

This is a unique technology that helps an individual prove that he or she knows a certain truth without having to say it directly.

A fairly popular development branch of ZKP today is ZK-SNARKs. Examples of projects using zk-SNARKs include ZCash and Mina.

zk-SNARK refers to a structure in which a prover can prove the possession of some information via a secret key without disclosing that information and without any interaction between the prover and the verifier.

With the “non-interactive” structure, the cryptographic proof is only transferred once from the prover to the verifier but many times compared to the traditional method of ZKP.

In the case of the anonymous writer, when sending another letter to the jury to reveal the real identity of the criminal, he would only need to attach a cryptographic on the blockchain to prove to the public that what he knows about the criminal is completely true, and that he did not secretly communicate with the jury to blame other innocent people.

Currently, the most efficient way to create a zero-knowledge proof that has a “non-interactive” structure and is short enough to be published on the blockchain is for a structure to have an initial setup phase with a chain of references being shared between the system and the validators, known as the system’s public reference number.

Until recently, another variant of SNARKs emerged to mitigate the existing drawbacks in this technology: zk-STARKs. This solution has been developed by StarkWare, one of the famous layer 2 solutions for Ethereum.

STARK allows developers to move the computation and storage off-chain. These proofs are then put back on the chain so that any interested party can validate the calculation. Moving the bulk of the computation off-chain using STARKs allows the existing blockchain infrastructure to scale more quickly and efficiently. However, the size of the cryptographic proof of the zk-STARKs is larger than that of the zk-SNARKs, which on the one hand makes it less vulnerable to quantum computer algorithms but at the same time make it heavier for the memory space than zk-SNARKs.


  1. Side-channel attack: an attack where hackers aim at loopholes indirectly relating to the security layer but the hardware or other parts of the system.
  2. Rollback attack: In this kind of attack, hackers will make the system abandon high-quality operation mode that was updated but returning to the older version of lower quality and susceptible to more loopholes.
  3. If one address just deposited 10,000 ETH into Tornado Cash and then another wallet withdraws 10,000 ETH shortly after (while other addresses usually only deposit 100 – 1,000 ETH into Tornado Cash’s liquidity pool), it is very likely that these two sending and receiving wallet addresses both belong to the same entity.

The Blockchain World Discovery


21st century. 2008.

A cataclysm called the “Global Financial crisis” swept through the globe, leaving a massive shock for the entire financial markets, especially the banking and real estate industry. The crisis then eroded people’s trust in a centralized and bureaucratic financial system with plenty of vulnerabilities.

From this erosion of trust, there came the invention of the blockchain, marking the beginning of a new era in the technological revolution.




In this world, each blockchain platform is seen as an independent country where the gas fees are their living costs and their consensus mechanism is regarded as a type of political philosophy.

This blog post does not intend to wireframe your point of view into any specific countries or political organizations in the real world. We hope the audience can take an open view with these disclaimers in mind and enjoy the comparisons provided here. Thank you.


The Paleozoic Era: Bitcoin

Blockchain was first termed in 1991 by the two scientists Stuart Haber and Scott Stornetta in the article “How to timestamp a document digitally”.

It was until 2008 that blockchain was popularized when one of its first major applications, Bitcoin, a peer-to-peer electronic cash system, was introduced to the world by a person named Satoshi Nakamoto. The purpose of Bitcoin is to solve the double-spending problem without the need for a trusted authority or any centralized entities.

Bitcoin has always dominated in terms of the very first cryptocurrency built on blockchain thanks to its decentralised consensus. The recent expansion of Bitcoin and blockchain has led legislators and investors in the traditional financial world to see them as a threat to the country’s staunch anti-money laundering system. But at the same time, they also consider this a potential ground for new investment opportunities and break out of the old-fashioned investment channels whose profits are already saturated.

While Bitcoin is the most powerful country in the blockchain world, it is still not an ideal location for creating economic activities for society. One of Bitcoin’s most important legacies is its political philosophy – Proof-of-Work. Other countries, such as RSK, DefiChain or Stacks, have contributed to bringing new vitality to Bitcoin by allowing its users to participate in activities in their own country while still securing them through a direct connection to Bitcoin.


EVM Union: Where Civilization Begins

Although Bitcoin has a big influence on the blockchain world, Ethereum takes the lead in terms of prosperity. Ethereum, founded by Vitalik Buterin in 2013, created a new political philosophy called Proof-of-Stake with its administrative apparatus, called the Ethereum Virtual Machine (EVM). Many countries that came out later used this administrative apparatus, thereby forming the EVM Union. 

The purpose of EVM is to serve as a runtime environment for smart contracts built on Ethereum which is a new way to build decentralized applications.

Another reality that plays out on Ethereum is that although the country leads in prosperity, it also leads in terms of the living costs. The fees that users need to pay when building and living on Ethereum range from $5 to $100 depending on different activities (not to mention peak hours), much higher than in other countries. The high standard of living comes from so many activities happening there where resources and land only exist as a limited amount.

As a result, the products on Ethereum (i.e., the blockspace) experienced a severe imbalance between supply and demand. To solve this problem, many other blockchains have been built around Ethereum to reduce the crowded activities on the land. These countries are categorized based on the infrastructure they use to offload activities on Ethereum, including each of the following subgroups:

  • Optimistic Rollup: This is where transactions are bundled together (to save space and costs) and are validated by default. The system will have a reward mechanism for those who can prove that these frauds are genuine. Nations of this group are Arbitrum, Optimism, Boba Network, and Metis.
  • ZK Rollup: This scalability solution works almost similarly to Optimistic Rollup, but cryptographic proofs are used to prevent frauds more proactively. Starkware, zkSync, and Immutable X belong to this group.
  • State channels: First transaction is settled on the chain, opening up a new channel so that in-between transactions are settled off-chain and secured by a multi-sig system; then, when the interaction between two parties ends, the last transaction will be settled on the chain. Connext, Perun, Raiden, and State Channels are members of this group.
  • Sidechain: These countries have their own political philosophy, running in parallel and connected to Ethereum through a bridge. Countries under this category are Polygon, Palm, Ronin, and Gnosis Chain.
  • Plasma: Countries in this group may have their own political philosophy but derive security from Ethereum through fraud proofs. They are different from sidechain in the sense that everytime they finish sanctioning a resolution, they will submit this sanction to the Ethereum mainnet. OMG Network belongs to this group.
  • Validium: Validium countries like StarkEx or zkPorter secure transactions that take place in their countries through cryptographic proof with the computation data being stored off-chain.

BNB Chain

Despite being built on forks of Tendermint and Cosmos SDK, BNB Chain belongs to the EVM Union. This explains why the BNB Chain is placed inside the EVM Union and next to the Cosmos continent.

Being backed by the largest crypto exchange in the world, Binance, it is no surprise that this nation stands in the top 2 of TVL with multiple high-quality projects. Besides, it is a country of GameFi projects. This place has all it needs for a GameFi project to take off:

  • A vibrant community
  • A secure and liquid NFT marketplace
  • Cheap cost and fast transaction for users
  • Huge support from the Binance team itself

BNB Chain follows the Proof-of-Authority and Delegated Proof-of-Stake (Delegated Proof-of-Stake) philosophy to help its operations run smoothly while maintaining a reasonable living cost.


Another Chad in the EVM Union is Avalanche. Only launched in 2020, this country has quickly risen to be the third-largest in the Union. The superb design in its political philosophy plays a vital role in bringing Avalanche to this position when it has attracted plenty of human and financial capital resources. Avalanche also aims to be a sovereign country with multiple subnets being built around it. The first two countries in this sovereignty are Defi Kingdoms, a well-known game title originating from Harmony but still in this EVM Union. The other is Swimmer Network, born from the most played game on Avalanche Crabada. 

Avalanche does have its own Executive Branch – Avalanche Virtual Machine. X-Chain, the chain which is in charge of asset creation and exchange, is an instance of AVM.


Starting with an idea of modular architecture, Fantom is a country that makes it easy for immigrants to live, integrate and adapt to the lifestyle here. It has attracted a lot of migrants and enriched its land, and is now ranked fourth in the EVM Union.

Nevertheless, Fantom encountered a crisis earlier in 2022 stemming from the demise of Solidex, a project that was running on Fantom at the time, and the departure of Andre Cronje, the person behind the formation of Fantom. Most recently, a lending institution in this nation, Deus Finance, was attacked by hackers, leading to the degradation of life quality and severe brain drain as users migrated to new and safer lands.


Polkadot: The rise of multi-chain

Ethereum and Vitalik Buterin’s Smart Contracts have revolutionized the blockchain world, but that doesn’t seem to be enough to keep Gavin Wood, once a co-founder of Ethereum, staying and contributing to Ethereum. In 2016, Gavin Wood left for a new adventure to conquer new lands that can pursue the “decentralization” mandate of blockchain. 

That is how Polkadot was formed.

Unlike Ethereum, where all vitality and activities take place on a single platform, Polkadot allows the birth of many satellite countries to exist in parallel as an extension country, thereby reducing the workload pressure that Polkadot has to handle. Relay-chain is at the heart of Polkadot. All activities are coordinated through a relay-chain with many para-chains, which are satellite countries, surrounding this centre to exchange and receive security from the force of validators gathered here. Currently, a total of 14 countries exist on this Polkadot continent. Each country pursues a different goal to achieve the final objective of diversifying the continent’s ecosystem: Efinity focuses on infrastructure for NFTs; Astar, Phala Network, Clover or Moonbeam focuses on infrastructure for Smart Contracts; Nodle focuses on blockchain infrastructure for IoT (Internet of Things) technology; Statemint serves the deployment of digital assets on the Polkadot network; while HydraDX, Interlay, Cetrifuge, Composable Finance, Parallel, Equilibrium and Acala focus on DeFi.

Kusama is a strip of a continent connected to Polkadot. Therefore, this continent is built for users to have a creative environment and test their ideas before officially deploying on Polkadot. Although often being seen as a “simulation” environment of Polkadot, Kusama still has its own habitat for people to participate in the construction and a separate economic system that everyone must follow while living here. Currently, 29 countries exist in this territory.


Cosmos: A universe of blockchains coming to reality?

Regarding a scalability solution for Ethereum, Polkadot or Avalanche is not the first country to introduce the concept of multi-blockchain on a territory; Cosmos has previously thought of it.

Jae Kwon first explored this continent, with the Tendermint BFT algorithm being the first seed. And from there, a Cosmos SDK development framework was formed, allowing programmers to build separate blockchains called Zones. Zones are directly connected to the Hub, the central blockchain of Cosmos, operating as a Proof-of-Stake institution. These blockchains will communicate with each other using the Inter-blockchain Communication (IBC) protocol; however, it should be noted that only blockchains with deterministic finality can use this protocol.

Some well-known countries on the Cosmos continent include Terra, Cronos, Osmosis, Evmos, or THORChain.

It is worth noting that Terra was once one of the most prosperous countries on the Cosmos continent. Terra’s native currency $LUNA has been rising continuously despite the current gloom of the blockchain world. Nonetheless, this empire collapsed within a short period, mainly due to a loophole within its framework that allows for printing the $UST stablecoin from $LUNA, leading to a death spiral when $UST was no longer pegged at $1. The Terra founding team and the community recently passed a vote to revive this country with a new domestic currency $LUNA, convert the old currency into $LUNC (Terra Classic), and $UST will forever disappear in this new sovereignty.

Other countries

Besides these vast swathes of land, some islands are separate and not part of any Union or Commonwealth, such as Tron and Solana.


Solana is building its own empire with the current objective of being a new promising land for games and NFTs. Their strengths lie in the non-bureaucratic system, the ability to finalize transactions within milliseconds, thanks to Proof-of-History mechanism, which allows the validators to record the sequences of transactions on the network. Nevertheless, such quickness and ease-of-use in its system is a double-edged sword: there are computational bots that are designed to keep spamming the network, therefore creating unnecessary congestion or even causing a network outage, which negatively affects other citizens. In the newest proposal, the Solana team is planning to implement stake-weighting in validating transactions to mitigate this issue. 

It should be noted that Solana does establish an endeavour to partner with other unions through other blockchains such as Velas, or through a smart contract such as the NEVM of Neon Labs.


Tron was founded in 2017 but appeared to be left behind compared to other nations. In June 2018, Tron declared its Independence Day and was independent from its Genesis Block. In October 2018, it established its own political philosophy, the TRON virtual machine, with a complete toolset for developers. However, because of the fixed fee of 1 USDT when transferring USDT via TRON, this country is still alive, with about 35 billion $USDT circulating in this country, even higher than the wealthiest country – Ethereum. 


The most popular language: Rust

Solidity, the primary language of Ethereum, is considered the most popular language among blockchain programmers. Many blockchain platforms built later on have also used Solidity to integrate EVM and join the EVM Union to attract human resources and financial capital from this country more efficiently. However, the new concept of multi-blockchain proposed by Polkadot or Cosmos and the rise of blockchain platforms like Solana have also fueled the popularity of Rust and Golang, the two main languages spoken on those continents. Rust is now the most commonly used programming language in the blockchain world.

What’s next?

After 14 years of establishment, the blockchain world has been divided into several continents and countries with independent political philosophies or development paths. The concepts of Smart Contracts and Proof-of-Stake have unlocked up a new period of promoting economic activities and thus being applied by most countries in the blockchain world.

Besides, multi-chain activities are essential for a globalized future, promoting immigration and trade among users. But at the same time, individual blockchain nations must ensure the facets of security for their people. EVM, Polkadot and Cosmos are all potential continents towards globalization. In addition, many new initiatives will be launched to further enrich these ecosystems, thereby strengthening the overall development of the blockchain world.

Internet of Blockchain – A Quick Look


Decentralization, scalability, and security have ever since challenged the idea of an open, decentralized network due to the problems of the first-generation blockchain Layer 1 Bitcoin, Ethereum, and their variants. While we’ve yet to see the upgrade of Ethereum 2.0, a new-gen Smart Contract Platform like Cosmos, Polkadot, Avalanche and LayerZero with promising proposes for the Internet of Blockchain. The term Internet of Blockchain refers to application-specific blockchains that co-exist and interoperate with one another. With several multiple-chain networks under development, it’s no certainty to forecast the winner of the scalability race between Smart Contract Platform. However, it is possible to dig deeper and explore the fundamental ideas underlying each one. 

Cosmos, Polkadot, Avalanche and LayerZero have critical distinctions at the protocol level (e.g., consensus method, economic security topology) that affect platform capabilities (e.g., inter-chain communications, token economics, types of viable applications) and how they grow their networks (e.g., validator participation, staking attributions). This article aims to  differences between these architectures and their trade-offs.


To help our readers understand this topic of The Internet of Blockchain comprehensively, before diving into this topic of The Internet of Blockchain, we will walk you through a few jargons which will be used frequently in this article.

Trilemma of blockchain

A blockchain cannot possess all three attributes of scalability, decentralisation, and security.

  • Scalability refers to the ability of a blockchain to expand in the increased number of transactions and nodes
  • Decentralisation ensures that the decisions made in the network are not concentrated on one central entity
  • Security in blockchain involves two dimensions: liveness and safety. While liveness indicates that consensus among validators in a blockchain must finally be reached, safety guarantees that validators do not misbehave. In light of safety, there is accountable safety: when more than ⅔ of the network behaves honestly, the chain cannot be forked but if it does (and ⅓ of stake is burnt for such misbehaviours), the network can point out the identities of those ill-behaved entities


Consensus is the agreement of the network on the validity of a transaction before adding it to the block.

  • Deterministic consensus is applied when there are voluminous flows of messages between validators to finalise the transactions. Once transactions are added, they cannot be reverted but forking the chain, thereby improving the network security. Also, since there is no waiting time for nodes to confirm that a transaction is valid, deterministic consensus helps lower the latency in transaction processing 
  • Probabilistic consensus indicates that the probability that a transaction added to the chain will not be reverted increases when the chain gets longer. Thus, transactions are not really “finalised” but are becoming more valid when more blocks are added to the chain. Moreover, probabilistic consensus does not require complex flows of messages between network entities, thereby enhancing the scalability of a blockchain 

Bridging Trilemma

First mentioned by Ryan Zarick, co-founder and CTO of LayerZero Labs, in order to build a blockchain bridge, a developer will face the trade-offs between these three properties:

  • Instant Guaranteed Finality, meaning that funds must be successfully transferred from the source chain to the destination chain
  • Unified Liquidity, indicating that multiple chains must be able to get access to a single liquidity pool for the sake of higher capital efficiency
  • Originality of Assets, specifying that the funds being moved to the destination chain must be the native (or the most liquid synthetic) ones being sent from the source chain, otherwise, users will receive synthetic assets that do not have much liquidity which then signifies the risk they have to incur

Light Client

A light client is a software or application that helps users interact with the blockchain without storing the entire data on it.



Unlike other blockchains, Avalanche has 3 separate networks to handle different tasks on the network: X-Chain for asset trading, C-Chain for smart contract creation, and P-Chain for overview platform coordination.

What problems does Avalanche solve?

Its consensus mechanism is leaderless directed acyclic graph where a node keeps querying other nodes for the validity of a transaction for a randomly determined number of rounds. There will also be a confidence counter that represents the number of times that a majority of the network accepts the validity of a transaction.

For example, the network must together agree on one of the two colours, gray and yellow. One node (denoted as node A) currently has gray as its choice. In the next round, if a majority of nodes being asked vote for yellow, and the confidence of A in yellow exceeds the confidence of A in gray, A will switch to choose gray. This process is repeated among all nodes until consensus is reached.


Because this mechanism is leaderless and the number of validators being able to join the network is boundless, it satisfies the need of decentralisation for a blockchain.


With the help of EVM subnets, it ensures the scalability of the network and allows customization on blockchain in an effortless manner which is suitable for enterprise adoption or instantiation of a new project but with different jurisdictions. 

To set up a subnet, one needs to be a member of the Primary Network and stake at least 2,000 AVAX. In the long term, this brings a viable scaling solution for projects being built on Avalanche Primary Network, but on the other hand, there will be a tradeoff of liquidity drain from the mainnet when a subnet can grow bigger and attract more capital flow into it.


Since a node can always change its decision based on the accrued confidence level after each round, the equilibrium of the network remains unstable, thereby discouraging ill-behaved nodes from attacking the entire network. 


A problem of Avalanche is that it does not have slashing. This may reduce the barrier of entry to become a validator, but also put the safety of its system at risk. Because decisions of a validator for a transaction on Avalanche can always be changed given enough confidence, it is hard to detect malicious actors in the network. In short, accountable safety is not satisfied.

Current status

At the time of writing, Avalanche has 19 subnets with 1,609 validators and more than 520,000 active addresses on all chains. 

The first subnet deployed on Avalanche is of DeFi Kingdoms, the famous game title that originated from Harmony. The number of unique contracts deployed on DeFi Kingdoms mainnet has reached 218, up by roughly 8 times since launch in March 2022. 

Recent upgrade

Apricot, the upgrade of Avalanche blockchain, has released Phase 5 in November 2021 with including major improvements especially for gas fees reduction. Most recently, transaction allowlist precompile was introduced on Avalanche, assisting in building a KYC/private subnet for enterprise or government adoption. 



Officially launched in 2020, Polkadot aims to solve the interoperability issue of blockchain. It achieves this by (i) relay-chain, where Polkadot’s consensus, communication & information are coordinated, (ii) a network of para-chains, including blockchains to process transactions parallelly, and (iii) para-threads, functioning the same as para-chain but only used temporarily. 

What problems does Polkadot solve?

Security & Scalability

Para-chains on Polkadot inherit shared security of the relay-chain. Furthermore, the consensus of Polkadot has two separate mechanisms for block production and transaction finalisation. When producing blocks, there will be slots (to product blocks) that are assigned randomly to validators. On the other hand, validators will vote on the chain that they deem to be the most valid, and a chain that has more than ⅔ of validators voting for will have its latest block being finalised. This will help enable the scalability of the chain in a probabilistic manner but also ensure the security and the speed when processing transactions as of deterministic consensus.


Currently, to be in the active set of validators of Polkadot, a newcomer must hold at least 1.75 million DOT, which is equivalent to $30M. Additionally, each chain only requires 5 validators, a tradeoff between scalability and security (as well as decentralisation). Polkadot also has a higher finality time (12-60 seconds), much longer than the speed of a few seconds compared to Avalanche or Cosmos. Also, parachain slots are limited, therefore also preventing other projects from building on Polkadot’s chains. 

Current status

At the time of writing, Polkadot has 14 para-chains, 15 para-threads with 297 validators, and more than 520,000 active addresses on all chains.

Each para-chain can be classified into 3 categories: DeFi, Smart contract platform, and Infrastructure. All of them exist to deliver a variety of products and enrich the diversity of the Polkadot’s ecosystem.

Recent upgrade

XCMv2 (the core messaging format between para-chains of Polkadot) Second Audit has been finished and XCMv3 is in the final stage of development. 



Cosmos is a network consisting of multiple independent parallel blockchains, called Zones, powered by the Tendermint Core consensus algorithms. These Zones link to Hubs – which function as the interoperation bridge between Zones. Hubs and Zones communicate with others through an inter-blockchain communication (IBC) protocol, similar to a virtual UDP (User Datagram Protocol) or TCP (Transmission Control Protocol) for blockchain. The vision behind Cosmos is to be the Internet of Blockchains, a network of blockchains able to interoperate with one another in a decentralised way while retaining its sovereignty.


What problems does Cosmos solve?

A set of open-source tools such as Tendermint, the Cosmos SDK, and IBC allow developers to build custom, secure, scalable, and interoperable blockchain applications quickly. These tools have highlighted their ability to solve the obstacles of Scalability, Usability, and Sovereignty.


Tendermint BFT manages the blockchain’s networking and consensus layers, giving the application layer to developers. The Tendermint BFT engine is connected to the application by a socket protocol (i.e., a data transporter) called the Application Blockchain Interface (ABCI). ABCI enables blockchain applications to be written in any language, thus making it easier to onboard potential developers to build on top of the Tendermint BFT engine while also freely adjusting their blockchains.

The three benefits of Tendermint for developers include simplicity, great performance, and fork-accountability.

Tendermint consensus allows the hub/zone to process thousands of transactions per second, with commit latencies of 6 to 7 seconds. Notably, there is no limit to the number of Zones and Hubs that can be created on Cosmos.

Additionally, another benefit of Tendermint’s consensus algorithm is simplified light client security, thus solving the scaling problems for Cosmos.


Cosmos SDK streamlines the progress of blockchain applications. This toolkit contains a series of pre-built modules (building blocks) from which developers can choose as desired for building a new chain.


The Cosmos SDK has already been used to build many application-specific blockchains that are already in production. Among others, we can cite Cosmos Hub, IRIS Hub, Binance Chain, Terra or Kava and many more are building on the Cosmos SDK.


Every Zone and Hub in Cosmos has their own validator set and different trust assumptions, which allows it to inherit the security and interoperability of the public Cosmos network without sacrificing control over its underlying service. The Cosmos architecture achieves this by using a global hub with regional autonomous zones, where voting power for each zone is distributed based on a common geographic region. For instance, a common paradigm may be for individual cities, or regions, to operate their own zones while sharing a common hub (e.g. the Cosmos Hub), enabling municipal activity to persist in the event that the hub halts due to a temporary network partition.


The connection between blockchains is achieved through Inter-Blockchain Communication protocol (IBC). Once integrated, IBC allows zones and hubs to open communication portals between one another, serving as the information rails, meaning that blockchains with different applications and validator sets are interoperable. IBC is the cornerstone of this otherwise sprawling network of sovereign chains.




Cosmos Hub is one of many hubs in the network, and there is no central hub or limit on the number of zones/hubs that can be created. Whilst Tendermint consensus is limited to around 200 validators before the performance starts to degrade, thus, reducing the decentralisation of the network. Limiting validators on the system leads to a high barrier to becoming a validator. Currently, a person needs a minimum of 47,231 $ATOM (~ $1M) to be in the active validator set of the Cosmos Hub


The Cosmos ecosystems have a fragmented network structure in which distinct blockchains with diverse priorities can have their own validator set and connect with one another via bridges when necessary. This topology is criticised for being as secure as the weakest chain (when the most secured chain accepts assets from the least secured chain, it becomes less secure). However, the new IBC versions will use shared security mechanisms (see Billy Rennekamps’ speech).

Cosmos Hub’s utility

While IBC is a significant milestone forward for the utility of the Cosmos Hub, it will not be the only hub competing for the market of cross-chain transfers. Cosmos’ hyper-modular architecture allows other hubs to compete for a share in the market. This hub rivalry may affect (though somewhat) the outlook for the Cosmos Hub and ATOMs.

The idea for Cosmos ecosystem hubs is to become the one with the highest reputation, garnering the most transaction submissions and related fees for network stakers. However, decentralised protocols should strive towards being lean and efficient economic activity routers, which would limit the share of validator revenue earned by fees. Fee revenue might be further eroded by fierce competition among hubs. Despite its essential role in Cosmos’ genesis, the Cosmos Hub and its ATOM tokens are not privileged within the ecosystem.

Current status

Recent Upgrade

Theta Upgrade

Allowing other blockchains with Interchain Accounts to create and control accounts on the Cosmos Hub

Rho Upgrade

Allowing the Cosmos Hub to perform transactions natively on other chains

What next?

Cosmos development teams plan to add shared security to the Cosmos Hub. This feature will enable Cosmos SDK networks to obtain security from the validator set of the Cosmos Hub. The design for Cosmos’ shared security feature is less-defined relative to Polkadot.

At a high level, Cosmos Hub stakeholders will be able to delegate their ATOMs to secure different zones, earning fees and even incentives (e.g., the zone’s native token inflation) for each chain protected.



LayerZero is an omnichain interoperability protocol, competent for exchanging messages to any contract on any chain. It also permits user applications to have complete control over its architecture and interpretation. LayerZero is a messaging transport layer that allows smart contracts to interact with one another across chains.

Source: Medium

LayerZero is a User Application (UA) configurable on-chain endpoint that runs an Ultra Light Node (ULN). To transfer messages between on-chain endpoints, LayerZero relies on two parties: the Oracle and the Relayer, to transmit messages between on-chain endpoints.

Highlight solutions by LayerZero

The Bridging Trilemma

By providing direct transactions across all chains without having to rely on a trusted custodian or intermediate transactions, LayerZero satisfies the rule of native assets.

Regarding the unified liquidity property, allowing transactions to flow freely between chains provides opportunities for users to consolidate fragmented pockets of liquidity while also making full use of applications on separate chains thanks to the combination of two independent entities: an Oracle and a Relayer,

LayerZero is generalizable enough to run on any chain, across the full spectrum of security and scalability assumptions, thus meeting the need for instant guaranteed finality.

Relayer & Oracle

A cross-chain transaction consists of a transaction tA on A, a communication protocol between A and B, and a message m. As per valid delivery states, m is delivered if and only if tA is committed and valid. The key notion behind LayerZero is that if 2 distinct entities confirm the validity of a transaction (in this case, tA), then chain B may be certain that tA is valid.


LayerZero accomplishes this by integrating two separate entities: an Oracle, which gives the block header, and a Relayer, which offers the proofs associated with the aforementioned transaction.

LayerZero utilises the security attributes of the established oracles (Chainlink and Band) with an extra layer of security via the open relayer system by splitting duties between the Oracle and Relayer. While this may appear to be a minor distinction at first look, its ramifications are far-reaching. For starters, it means that the worst-case security of this new network is still equal to that of the Oracle. If you select Chainlink as your oracle, every malicious action in the system is still reliant on first defeating the Chainlink DON. Even if the Oracle’s consensus is corrupted, it also requires the Relayer’s active collusion.

LayerZero Endpoint

The implementation of LayerZero Endpoint – the interface to LayerZero is a lightweight on-chain client, on multiple chains allowing cross-chain transactions. A LayerZero Endpoint is currently implemented as a series of smart contracts on each chain included in the LayerZero network. The core functionality of a LayerZero Endpoint is encapsulated in three modules: Communication, Validation, and Network. 

One key point of LayerZero Endpoint is that rather than replicating and storing block headers within the client, it delegates the task of fetching the necessary cross-chain headers and transaction proofs to off-chain entities: the Oracle and Relayer. This results in LayerZero Endpoints being incredibly lightweight, making them cost-effective even on expensive chains like Ethereum.


In addition to the core modules, LayerZero Endpoint can be extended via Libraries, which are auxiliary smart contracts that define how communication for a specific chain should be handled. Each chain in the LayerZero network has an associated Library, and each Endpoint includes a copy of every Library.

Current status

LayerZero is now in beta and has launched across EVM-compatible networks like Ethereum, Avalanche, Polygon, BNB Chain, Fantom, Arbitrum, and Optimism, with integrations on Solana and Cosmos coming soon.

While the first application to integrate with LayerZero was Stargate – a liquidity transport protocol, it’s worth emphasizing that cross-chain lending, yield aggregation, and trading are only the beginning.

Recent Upgrade

Security Update

Implementing The Dome, a system that (at the relayer level) deflects all attacks from malicious external contracts rendering them useless..


Blockchain networks that are diverse Cosmos, Polkadot, Avalanche and LayerZero provide remarkable infrastructures to support the internet of blockchains, demonstrating that the asynchronous heterogeneous network paradigm works effectively and is an enhancement over Bitcoin and Ethereum as they now function. They will eventually be able to support millions of daily active users and realize the user-owned and managed Web 3 vision.

Co-existence of these major architectures is healthy for a true decentralized internet, as they have their own design choices and tradeoffs in their own right. Based on the data across development activity and the total active addresses, Avalanche is currently take the lead. It is noteworthy that each platform has different priorities and limitations tailored to the specific circumstances they’ve outlined.


Kyros Research Team

Vietnam Cryptocurrency Market Report 2021 Highlights

Dear readers of Kyros Ventures,

After preparing and conducting research about cryptocurrency investments in Vietnam, the Kyros Ventures, Coin68 together with Ancient8 and GameMarketCap teams are honored to launch the official version of “Vietnam Cryptocurrency Market Report 2021” to all you readers, to those who are interested and would like to dive deeper into this emerging yet dynamic financial market.

Prior to getting down to the detailed content, let’s first warm-up with some fascinating highlights our teams have collected from the “Vietnam Cryptocurrency Market Report 2021”!

The number of newbies starting to join the market keeps rising

Year of experience

While in the H/ 2021 Report, just nearly 40% of survey respondents said that they participated in the cryptocurrency market recently, up to now this number has reached approximately 60%. 

The trend of mid-term investment is getting stronger, but the heat of this market has not yet to be cooled down

Trading Style

Different from the inclination to HODL which pervaded in the former half of 2021, other investment styles with shorter time horizons – based on day/hour or based on week/month have become more popular recently. Nevertheless, those who say that they will keep raising the allocation to cryptocurrency in 2022 still account for more than half of the total surveyees, not to mention that the number of these people has risen from which of the last 6 months.

Change in Crypto Allocation

Defeating Smart Contract platforms & DeFi, NFT & GameFi become the most anticipated trends from investors in 2022

Most Anticipated Categories in 2022

The captivation of smart contract platforms and DeFi cannot be denied as they are among the major “concrete skeleton” of this cryptocurrency market. Nonetheless, NFT and GameFi have risen to receive the highest expectation from investors with well north of 50% of votes when being asked about the dominant trend in 2022, an impressive boom compared to the humble figure of 18% in the survey from the former half of 2021.

Profit from GameFi

The large expectation in GameFi can be explained by the huge returns that investors have realized since more than 40% of GameFi investors in our survey claim that their capital has increased by two to five times when pouring their money into this sector. Notably, even when these investors suffer losses from GameFi, they do not intend to reduce their allocation to this cryptocurrency sub-field.

These are just a few noteworthy pieces of information gathered from the Vietnam Cryptocurrency Market Report 2021. Please download the Report here to read more of other amazing highlights!

Cryptocurrency Market Report – Q4 2021

Q4 is undoubtedly the most volatile period of the crypto market in 2021. Such events of BTC hitting new ATH in early November and then suddenly dropping below $50,000 in early December; notable technological changes of the blue-chips as well as new trends coming up are gradually shaping the way investors allocate their assets in this emerging and lucrative financial market.

Through the Q4/2021 Cryptocurrency Market Report, the Kyros Ventures Research Team hopes to give you an overview of remarkable highlights of the past 3 months so that you can make the best investments and projections for 2022!


After the recovery period in Q3, at the beginning of Q4, the $BTC price, as well as the entire crypto market, has seen improvement. Numerous news about regulation benefiting $BTC along with new trends and products launched have driven more capital flow into the crypto market, thereby making $BTC reach its ATH at nearly $69.000 (according to Binance). The market capitalization has reached 3 thousand billion USD for the first time on November 10 (according to CoinGecko).


Below are some significant events in Q4:

  • 1/10: the situation was more optimistic for $BTC when rumors about an ETF launch spread
  • 20/10/2021: when ProShares Bitcoin Strategy officially traded Bitcoin Futures ETF, $BTC price has continuously reached ATH until 11/11, for the first time in the history, $BTC price was set at roughly $69,000
  • 12/11/2021: Miami became the first city paying dividends for its citizens by $BTC when they buy its cryptocurrency 
  • 15/11/2021: Taproot, the first upgrade for $BTC since 2017, was officially live, helping the development of smart contracts on Bitcoin blockchain more convenient
  • 16/11/2021: $BTC started its “red fire” days when CFO of Twitter, Ned Segal, said that investment in $BTC just “doesn’t make sense right now”. Afterward, India became the next country banning $BTC while Biden’s administration, step-by-step, was completing their $BTC tax regulations. Even the information about establishing a “Bitcoin City” of El Salvador could not help the bear market 
  • 12/2021: News about the new COVID-19 variant, Omicron, once again threatened the global financial markets. Meanwhile, investors were getting impatient with the SEC when they kept postponing the approval for the $BTC ETF. Perhaps such delay has made Fidelity, a financial company headquartered in Boston, the US, quietly launch a spot ETF in Canada, not the country of origin


At the end of Q4/2021, on-chain data still shows that Bitcoin’s circulating supply is contracting.

The total supply of Bitcoin on exchanges keeps declining tangibly and reaches its all-time low for the last 3 years despite positive price movement in Q4/2021. Particularly, at the end of Q3/2021, the amount of Bitcoin on exchanges was recorded low at 2.457.417, at the end of October and the beginning of November, when the $BTC price continuously reached new ATHs, there was no sign that Bitcoin was pumped to exchanges and reversed the trend. In contrast, the total supply of bitcoin keeps reducing considerably and went to a new all-time low on December 22, 2021 at 2.303.241 Bitcoin.

In the meantime, $BTC supply which is low in liquidity and does not circulate on exchanges keeps rising remarkably and currently stays at 76.13%, while nearly reaching 76.26% in May. As seen on the chart, the relationship between these 2 metrics (price and low-liquidity $BTC supply) has been relatively positive within the past 18 months.

Ending Q4, $BTC supply with low liquidity keeps hitting new ATH when long-term investors of Bitcoin continually buy more new $BTC when the market still witnesses low-volume selling sessions and liquidations of long positions.


In Q4/2021, we have witnessed a lot of “explosion” of new ecosystems: Solana, Avalanche, Fantom… There are many views that Ethereum is in danger of being surpassed. So, let’s take a look back at Q4/2021 to see what Ethereum is holding.

EIP – 1559

EIP – 1559 launched with upgrades that helped alleviate the problem of expensive fees on Ethereum with a “base fee” proposal.

Base Fee has remained relatively stable.

However, gas on Ethereum is still unstable and depends a lot on market circumstances. If there are times when the market is active or opposite (Panic Sell), gas fees on Ethereum still increase quite a lot compared to usual.

Up to this point, approximately 1.3M ETH has been burned, equivalent to a value of about $4.9B. This is a huge number.

Ethereum’s Total Revenue continues to outperform many other top blockchains.


The number of people who believe in and support ETH 2.0 continues to increase, which is clearly shown by the amount of ETH participating in staking on the Beacon 2.0 chain. With the launch of ETH 2.0, many new projects to solve the staking problem on the ETH chain have been built and developed, of which the most successful is Lido Finance.

While not having a prominent boom like other small ecosystems, in general, Ethereum still has a certain growth with Total Value Locked continuing to reach All-time-high, over $155B. This number is about 9 times higher than the two following ecosystems, Terra ($18B) and Binance Smart Chain ($17B). It can be said that Ethereum still retains its certain values and maintains a stable position and growth momentum, despite the fact that there are many new competing ecosystems.


We will continue to understand deeper by looking at the evolution of protocols on Ethereum.

The top 10 protocols with Total Value Locked on Ethereum have seen a marked change, with Lending and AMM giving way to the Curve and Convex. Curve with its continuous integration, expansion, and increasingly streamlined tokenomics has attracted a large number of users, with Convex growing prominently in late 2021.

Lido Finance also entered the top 10 protocols with the highest Total Value Locked with the success of its Liquid Staking product. With gas costs still relatively high on Ethereum, Dex AMMs in general have difficulty maintaining their positions.

Regarding the number of users, in the last 3 months, Ethereum has continued to maintain a growth rate despite expensive gas fees. To explain this, we can find a number of reasons such as:

  1. Crypto is increasingly mass-adoption, so the number of participants experiencing crypto-related products, including Ethereum, also increases.
  2. Despite the expensive cost, Ethereum is still home to a large concentration of assets in the market with top projects.

In addition, there are quite a few protocols such as Curve, Sushi, and AAVE that are gradually expanding and developing on Layer-2 as well as other ecosystems. This both has the effect of reducing the load on Ethereum itself, but also creates the risk of liquidity and user fragmentation. If there is a truly more suitable and efficient ecosystem, Ethereum could lose a lot of market share.


There are many solutions to approach scaling and gas problems on Ethereum, ETH 2.0 is an on-chain solution and Layer 2 is an off-chain solution.

In 2021, gas fee on Ethereum recorded the highest, this is a big challenge of Ethereum but a big opportunity for layer 2 solutions.

At the moment, Polygon is the most successful layer 2 solution, which completed the main legos in its ecosystem, total value locked got $5.5B at the end of 2021. However, other layer 2 solutions such as Arbitrum, Boba Network, Metis Dao also have solid growth recently.

New solutions like Starkware or zkSync are expected by the community. In Q4, Starkware successfully raised $50M in Series C round with the participation of Three Arrow Capital, a16z, Alameda Research,..; meanwhile zkSync closed the Series B round with $50M from a16z,, Bybit,….


In 2022, the most expected thing is the Merge phase of ETH 2.0 is the combination of Beacon and ETH 1.0. This means the whole status of Ethereum’s chain and smart contract will be deployed on Beacon’s chain using the PoS consensus. At the moment, the Merge phase is in testnet and if the combination is successful done, Ethereum network will come to the final phase – Shard Chain which help Ethereum scaling when assure the security of the network.


Not only in Q4/2021 but the entire 2021, fierce competition has been seen between different smart contract platforms to expand their market share as well as community trust. Besides those Layer 1 which have been exploding in 2021 and draw a lot of attention to themselves such as Solana, Avalanche, or Fantom, there are still many new ones worth anticipating with abundant prospects to grow in 2022. Let’s take a glance at these 5 smart contract platform tokens which have witnessed the strongest increase in price in Q4/2021 and demystify their ignition for the last 3 months!


Kadena is a blockchain platform using PoW mechanism to enhance security for transactions but also ensure scalability and safety when deploying smart contracts. Different from other blockchains, Kadena uses its own programming language called Pact, designed to automatically detect bugs and help developers write smart contracts more securely.

In Q4/2021, Kadena has had many major events which help boost its Total value locked and attract more users to the ecosystem, remarkably:

  • The launch of wrapped BTC on Kadena in mid-August 
  • $wKDA – the wrapped version of $KDA to bridge to Ethereum is created, which also marks the initiation phase of Kadena to expand to other platforms such as Terra, Polkadot, Celo, Cosmos… 
  • Liquidity is expanded with $KDA being listed on and
  • The NFT landscape on Kadena is gradually rising when UFO Gaming announced their plan to  build an NFT gaming platform on this blockchain and Marmalade, the first NFT platform on Kadena, is introduced in early December
  • At the beginning of November, Kadena has launched the Chainweb-Mining-Client software allowing miners to build their own nodes without going through a mining pool

It should be mentioned that the ecosystem of Kadena has still been in its initiation phase so far with the absence of major fields to attract more capital flow. Two notable fields – AMM (KadenaSwap, Andedak & Kaddex) and NFT have yet to see impressive milestones. Nevertheless, it is this newness that makes $KDA a potential investment for those new participants joining this crypto market or for those who have missed the enormous deals of the blue-chips such as $SOL, $AVAX, or $ATOM.


Dusk Network is a blockchain platform aiming at users’ privacy and is designed for financial applications with Zero-knowledge Proof technology.

In Q4/2021, the growth of Dusk Network is mainly driven because of these events:


Phantasma is a blockchain platform specializing in NFT and gaming with neutral-carbon certification.[1] Another special feature of Phantasma is its Smart NFT technology with outstanding attributes, such as:

  • NFTs are easily programmable and adjusted/upgraded
  • Many NFTs can be bundled together to create a new NFT
  • Projects can create NFTs which limit the time of usage for users, thereby allowing them to try a new product before deciding to make their purchase decision
  • NFTs are minted instantly, users don’t need to wait or pay substantially high fees to finalize the transaction
  • NFTs can be embedded with other assets to create a minimum value for itself
  • Creators can attach a secret link to another file which can only be opened by that NFT’s owner

A few catalysts for the rise of $SOUL in Q4 include:

  • Save Planet Earth (TickerL $SPE), a British-headquartered company established in 2021 with a vision to solve environmental problems and climate change, officially chose Phantasma to be the blockchain platform to issue carbon credit at the end of October. The resonance of this partnership has even lasted to the end of November when the first NFT-based carbon of Save Planet Earth is sold on the NFT marketplace GhostMarket
  • Facebook and other giant tech companies announce their plan to join the metaverse landscape. All NFT and gaming projects benefit from this hype, including Phantasma
  • The famous American filmmaker Kevin Smith minted his NFT on Phantasma and claimed that he would hold $SOUL until it reaches $4.2
  • New projects are built or expanded to Phantasma, namely Blood Rune, DeSpace, …
  • At the start of December, Phantasma announced a partnership with Polinate, a crowdfunding platform, and Netvrk ($NTVRK), a metaverse project


Some major events on Terra ecosystem in Quarter 4 are:

  • Mainnet upgrade from Columbus-4 to Columbus-5 at the end of September. Main points in this upgrade include:
    • 100% income from UST issuance, the stablecoin of Terra, will be burnt to reduce $LUNA supply (for every $UST minted, 1 $LUNA will be burnt)
    • Prioritize mempool for oracle votes to help the price update when minting $UST more accurate
    • Transaction fees on Terra will be paid directly to validators or authorized entities instead of flowing to reward pools as previously, therefore increasing benefits for staking $LUNA
    • Functions of the Inter-blockchain Communication of Cosmos SDK will be integrated into Terra blockchain, helping $UST liquidity flow to other blockchain platforms on Cosmos such as ThorChain, Secret Network, … 
    • At the end of November, news about FED’s opinion on stablecoin regulation has driven the popularity of algorithmic stablecoin as $UST
    • Investors rushed into buying $LUNA to join the lockdrop event of Astroport on December 14. Particularly, this DEX has pulled more than 1 billion USD, half of which is $LUNA, to the Terra ecosystem

Hitherto, according to Defi Llama, the total value locked of Terra has even passed Binance Smart Chain to be in the top 2, right behind the most popular smart contract platform in the world Ethereum.

Nonetheless, tokens of DApps on Terra did not enjoy much of the rise of $LUNA. Only 5/13 tokens in this ecosystem (excluding stablecoins) saw positive price change ($ANC, $LUNI, $ORNE, $LOOP) since late September, based on the data on CoinGecko.

At the moment, nearly half of the TVL on Terra belongs to Anchor Protocol, the most used lending platform in the ecosystem.

With the current number of DApps of only about 150, it can be seen that the Terra ecosystem is yet to enter its maturity state. However, investors can expect a strong explosion of $LUNA in a near future after the 150 million USD-worth incentive program introduced in July 2021 is activated gradually to support projects built on this platform.


Secret Network is a blockchain platform allowing developers to write smart contracts freely but still ensuring the privacy of user data.

Below are some crucial incidents happening on Secret Network for the last 3 months:

  • Mainnet upgrade – Supernova – since the launch of Secret Contracts in September 2020. This is a big turning point for the ecosystem as it also includes the Inter-blockchain communication protocol of Cosmos to Secret Network blockchain
  • Binance announced the re-opening of $SCRT withdrawal. This has helped the total value locked on SecretSwap, the first AMM of this ecosystem, soar by roughly 30 times


One of the most explosive trends of 2021 that we cannot ignore is the GameFi trend. It all started in the summer of 2021 when Axie Infinity completed the transition to the Ronin sidechain and perfected its Play-to-Earn model. At the same time, when the Covid epidemic raged, hundreds of millions of people fell into unemployment. Axie Infinity “accidentally” became an effective solution to this difficult problem.

The phenomenon of Axie Infinity has brought a new breath to the cryptocurrency market and created the basis for a series of projects related to blockchain games to emerge and launch many new services, attracting an extremely large number of users for this market niche.

On-chain data from DappRadar show that the number of Unique Active Wallet – UAW (wallets) active on GameFi applications reached an all-time high of 1.5 million users on Nov. In addition, in 2021, the number of people active on GameFi applications accounts for 49% of the total number of people operating on decentralized applications.

As a matter of fact, when the attention and demand towards the GameFi market is too great, the supply will follow to catch up with this trend. A series of new GameFi applications were born and converted user bases from dozens of different blockchain platforms not only on Ethereum.

The need to build new game applications and game-related platforms and tools has driven money from top tier venture capitals to flow into this market niche when this is just the beginning, investors seem to see potential in every corner of this market. In addition to gaming units like Forte with a record investment of up to $725M, Solana Ventures and Meta (renamed from Facebook) are also watching and placing the first bricks enter the GameFi market.



It can be said that 2021 is a successful year for NFT, this technology is getting more and more attention with the participation of influential public figures, especially artists around the world.

“Think about it this way: The internet we have allows for the easy transfer of information. We costlessly swap copies of news articles, music files, video games, pornography, GIFs, tweets, and much more. The internet is, famously, good at making information nearly free. But for precisely that reason, it is terrible at making information expensive, which it sometimes needs to be. What the internet is missing, in particular, are ways to verify identity, ownership, and authenticity — the exact things that make it possible for creators to get paid for their work.” Ezra Klein

Let’s take a look back at some NFT market metrics for Q4 and 2021:

The floor price in Q4 is hovering around 1.05 ETH. The number of wallets holding NFTs also hit an all-time high on December 30 with 11.745 new wallets entering the market.

Compared to Q3, the trading volume on NFT exchange OpenSea in Q4 is not as impressive, but in terms of average price per NFT, we can see the growth of this particular token as collections NFTs have become a digital asset – a store of value that helps investors in their portfolio.


CryptoPunks and Apes (BAYC) are the 2 most famous PFPs (Profile Picture) collections in the crypto community. Following the trend developed by these 2 OG collections, there have been countless other collections of NFTs created for the purpose of placing user avatars.

NFT is a perfect piece for social networks. They can represent an individual’s digital identity and brand image, just like brands rely on brand identities, taglines, images, brand ambassadors, and more. As an intangible asset, the crypto community can also leverage NFTs in similar ways as NFTs can become part of a personal brand and cannot be sold or separated from the owner’s identity.

Imagine you live on the internet. The way the world primarily knows you is not through your face or your clothes—it’s through your digital avatar. Of course, you are willing to spend a lot of money on something like a CryptoPunk: It’s your face to the digital world. Plus, it’s the key to entering a small, unique internet club. Being a CryptoPunk owner as a crypto-native is the equivalent of being an Augusta National member as an old-school businessperson.

Ethereum co-founder, Taylor Gerring, purchased an NFT Bored Ape Mega Mutant Serum for 888 ETH ($3.6M). Regardless of whether you believe in NFTs or not, people are still spending millions on this asset class and no sign of stopping. They are not just JPEGs but also a way for people to assert themselves and identify their personal brand on social networks. In the hierarchy of needs of psychologist Maslow, this is the highest level of need that people want to be satisfied after other needs for physical, security, love, self-esteem have been satisfied..

Currently, the current floor price of BAYC has surpassed that of CryptoPunk, at 53.9 ETH ($215,350) compared to CryptoPunk’s floor price of 52.69 ETH ($210,515).


Emphatically attached to the achievement of NFTs and blockchain games, the viewpoint for the metaverse and virtual universes was at that point promising. In any case, later on Facebook’s rebranding event, the metaverse viewpoint detonated.

The NFTs and digital currencies connected with metaverse projects experience a genuine worth of examination, while the interest for this sort of dapps filled. In Q4, virtual world dapps have generated more than $402M in NFT trading volume, increasing 615% the numbers seen in Q3. Plus, the number of unique traders doubled quarter-over-quarter with more than 50.000 unique traders registered in Q4. 

Games like Roblox, or Minecraft, where the community can build on top of infinite virtual space, have been quite popular since the last decade. And Blockchain-based virtual worlds are starting to gain the same type of traction. 

The price on average for virtual lands in The Sandbox surged almost 500% from the end of October. In December, The Sandbox parcels were traded for $14.976 on average, a significant growth from October’s $2.500 average. Brands and celebrities like Adidas, Atari, The Walking Dead, Snoop Dogg, and Smurfs, have taken part in The Sandbox’s virtual world. (Dappradar)

The Fashion Street Estate in Decentraland sold for 618.000 MANA ( $2.42 million). In the same timeframe, digital lands inside CryptoVoxels, another blockchain virtual world are being sold for a price 25% higher than the ones registered in October. 


Source: Dappradar

In the narrative for mass adoption, celebrities and brands have a solid voice. 

  • Fashion giants Gucci, D&G, and Burberry make their appearance in the space after launching their respective collections. 
  • Coca-Cola partnered with Decentraland to establish unique wearables, while Pepsi launched its first 1,893 NFT (The Mic Drop) pieces.

Source: Pepsi

  • NIKE, Inc. Acquires RTFKT – A virtual shoes company that makes NFTs and sneakers ‘for the metaverse’
  • Adidas reveals new NFT project with Bored Ape Yacht Club
  • Katy Perry launched her first digital collectible NFT on Dec 14 with Theta Network

  • Legendary basketball player Michael Jordan launched NFT platform for athletes, HEIR

2022 is still going to be a sublime year for NFT

  • NFT music will thrive with the participation of famous artists, especially as musical concerts are gradually allowed to reopen in some countries and more, specifically in the Metaverse.
  • Large companies will start to accept NFT more, not only in JPEG but also as a social token that allows holders to have certain privileges, such as participation in events, meetings, networking, membership, …
  • NFTs can be leveraged to tokenize both tangible and intangible assets. Each NFT can act as a publicly transparent, trackable certificated, for any given asset, recording its trading activities.
  • NFT will gain more utility in the world of blockchain and cryptocurrency. With major brands like Visa joining the NFT, the NFT is likely to be applicable to a wide range of industries.


Worldwide interest in the term “Web3” also reached all-time high on Google in December, increasing about 400% since the beginning of October. 

“Web3” is a term that covers the entire Cryptocurrency market. Web3 has become a proxy for new economic ideas on how the Internet should be architected, and how individuals should share in this value creation. The Web3 ecosystem now represents an expansive ecosystem of new ways for creators and communities to monetize, and new models for internet-native communities to collaborate. 

Chris Dixon called it 

“The internet owned by the builders and users, orchestrated with tokens.” 

Eshita described the Web1 -> Web2 -> Web3 evolution as Read-Only -> Read-Write -> Read-Write-Own.

Not only are individual investors interested in Web3, but ventures capitals are also giving certain favors. In Q4/2021, the amount invested in Web3 projects reached $1.19B, an increase of 320% compared to Q3. The number of invested projects also increased from 50 projects (Q3/2021) to 62 projects in Q4/2021.

Tesla CEO Elon Musk and Twitter Co-Founder Jack Dorsey ⁠—Two of the most famous tech billionaires in the world ⁠— also recently tweeted about the keyword “Web3”.

Currently, decentralization is not really clear. However, Web3 is still a huge technological leap forward from the current centralized platforms. The future will tell how the new web quality delivered by the Web3 infrastructure will accumulate value and meet user needs for decentralization, ownership, verifiability, and enforcement.

As we move to a decentralized data-driven web, one of the key challenges will be how users and developers can efficiently and cost-effectively bring blockchain data into applications. If Web3 is to be decentralized, then a robust, secure, and economical network infrastructure is essential.


DAO stands for Decentralized Autonomous Organization. DAO is an organization model but has distinct features compared to conventional models:

  • Autonomous: This is one of the most basic factors that distinguish a DAO from a traditional organization. DAO is independent of any government, organization, or individual. A DAO like MakerDAO, can completely allow users to access and interact with its protocol from anywhere in the world, as long as they have a computer, smartphone, and Internet connection.
  • Decentralized: Currently, DAO protocols such as Uniswap, MakerDAO, FWB, UniWhale … are all accessed through the Internet, but hidden behind that is that it is built on Blockchain platforms like Ethereum. Based on blockchain technology and cryptocurrency (coin/token), DAO can become decentralized.

The decentralization of the DAO is evident in many aspects such as:

  • Infrastructure: a DAO can be accessed on any computer, phone, but if it is built on blockchains like Ethereum, Avalanche, Solana… then it is completely decentralized in terms of infrastructure. No one can fake transactions on the DAO, because then the transaction will be rejected. Infrastructure decentralization is also reflected in the fact that crypto DAO, even if banned in one place, can still launch normally in all the rest.
  • Payment, transactions: DAO still using tokens and built on blockchains like Ethereum, so as long as Ethereum is active, DAO built on it can freely interact and transact with any individual or organization, just have ETH as a fee.
  • Governance: different from traditional organizations, most of them operate in a hierarchical model (for example, the Company will have a Board of Directors, Supervisory Board, General Director, departments/departments…), DAO operates in a simpler way, any member of the DAO is welcome to propose ideas and vote. Many DAO also has a reward system for members with effective suggestions and ideas.

Because of its autonomous and decentralized feature, DAO becomes a model that is very suitable for the goal that Crypto projects aim for. It can be said that DAO has become an inevitable trend in building the management model for Crypto projects.


In Q4/2021, DAO has grown in both size and quality. Let’s take a look at the outstanding DAO in its field right below:

According to DeepDAO’s statistics, there are currently 188 officially active DAO, managing assets up to $12.1B. Most of the big-name and market-leading projects are operating under the DAO model such as UniSwap, AAVE, MakerDAO, Olympus, BitDAO, Lido…

The benefits of using the DAO as a governance model

  • Take advantage of the great human resources. Instead of having just a few people voiced, the DAO allows the whole community to participate.
  • Avoid waste, efficiency and sensory decision making.
  • Create democracy, fairness in participating in the project.
  • Remove barriers of geography, time, skin color, ethnicity…

For Example:

The Olympus DAO model that has exploded since October is a new model for DAO funding:

  • Giving opportunities to small investors to invest in the project early
  • The project has the opportunity to build a strong community foundation right from the start

The shift in fundraising for many projects: No more Seed, Private rounds with a large number of tokens. Fundraising projects through the community itself (Wonderland, Jade Protocol, Magnet DAO, …)

DAO IN 2022

With its advantages, DAO will continue to be a popular governance model in the Crypto world. This will be a motivation for infrastructure and service projects for DAO to have the opportunity to explode and develop faster. Besides, with more and more money pouring into the market, Investment DAO, Protocol DAO will continue to be the growth trend.

[1] Neutral-carbon certification is a certification for corporations whose net carbon emission reaches approximately zero. For Phantasma, this platform commits to keep its carbon emission to zero by reducing energy consumption when users mint NFT and purchasing carbon offset contracts to compensate for this carbon emission.


Q4 has concluded an exciting and challenging journey with the Cryptocurrency Market in 2021. $BTC has proved its position as a king when trust of long-term hodlers in this coin did not show signs of shrinking. About $ETH, this number one smart contract platform is still on its way of executing important improvements to solve the scalability issue without compromising security or decentralization of blockchain.

2022 is coming, and it is safe for us to expect a brighter 2022 with the crypto market with huge potential of NFT, Web3, DAO and new smart contract platforms. 2022 will be the year that witnesses more blockchain adoption throughout many fields of life including enterprise management, finance, art…

Lastly, our Research team would like to thank you for taking your precious time to read this report. Please stay tuned for further reports to be released in the coming quarters!

Kyros Research’s Quarterly Report – Q3 2021

The third quarter of 2021 marks a number of significant changes compared to previous ones. Not just with global regulation over Bitcoin or Ethereum upgrades, but many trends have become new use cases, improving market dynamics and as catalysts for future sustainable growth. Let’s rewind the time capsule to understand how far the crypto market has grown in the last three months in this Kyros Ventures Q3 2021 report.

Bitcoin overview

Q3 Price Outlook

After a 3-month long bearish market in Q2, Bitcoin and the cryptocurrency market bounced back during the third quarter in correlation with the many pieces of exciting news regarding cryptocurrency legislation around the globe.

According to Coinbase, after the 55% sharp decline from all-time highs at $64,800 USD in the second quarter, Bitcoin price in July sustained the bearish trend until it reached a $28,800 low and began a trend reversal. From there, Bitcoin price recovered strongly by 81.11% and closed 8 consecutive weekly candlesticks in a row before correcting from a local high of 53,000 USD in September. Ending Q3, Bitcoin stabilized at above 43,000 USD, which is an increase of 25.03% this quarter.

Historical Milestones in Q3

Quarter 3 remarked significant milestones in the development history of Bitcoin and the cryptocurrency market

  • July – The U.S Securities and Exchange Commission (SEC) continues to constantly call for Bitcoin and cryptocurrency regulation.
  • Aug 2 – Germany’s new law changes now allow “Spezialfonds” to store crypto assets
  • Aug 8 – Infrastructure Bill Amendment regarding unclear definition of “Broker”  is shutdown 
  • Sep 7 – Bitcoin officially becomes legal tender in El Salvador
  • Sep 8 – El Salvador Government buys “the dip” is now holding 350 bitcoins
  • Sep 24 – China’s regulators release a blanket ban on all crypto transactions and mining

Institutional Bitcoin Adoption

Large capital allocators continue to show interest towards Bitcoin and Bitcoin products.

No new Bitcoin was added to the Grayscale Bitcoin Trust during the third quarter and this entity is still holding 654,855 bitcoins, accounting for 3.12% of max supply.

MicroStrategy and its CEO, Michael Saylor continue to bet big on Bitcoin and added 8,957 Bitcoins (5,050 Bitcoins recorded in September and 3,907 Bitcoins recorded in August) to their balance sheet. At the end of quarter 3, MicroStrategy held a total of 114,041 Bitcoins.

No new Bitcoin was purchased by CoinShares, Tesla and Square during the third quarter.

Moreover, many major service providers and institutions caught up quickly to the rising demand of cryptocurrency products and have been adapting lately.

  • Vast Bank became the first chartered US bank to offer Bitcoin services
  • JPMorgan Chase submitted a Bitcoin ETF application with the SEC; Bank of America approved Futures Trading; Wells Fargo unveiled a private Bitcoin Fund
  • Twitter added Bitcoin integration to the new Tip Jar feature on IOS.
  • PayPal launched a cryptocurrency service, allowing British customers to buy, hold, and sell digital currencies.
  • U.S. Global Investors bought 566,389 USD worth of GBTC

Bitcoin Supply Squeeze

On-chain metrics at the end of the third quarter suggest that a bitcoin supply squeeze is under way.

Over-three-month HODL waves reached an all time high of 84.87%, meaning only 15.13% of Bitcoin circulating supply was moved in the last quarter.

Total Bitcoin balance on exchanges also confirmed this phenomenon, where total supply on exchanges witnessed a trend reversal around March, 2020 and until September 29, 2021 has reached the lowest amount of Bitcoin available in over three years with 2,457,417 Bitcoin.

Additionally, Bitcoin illiquid and non-exchange supply percentages increased sharply during the last three months. As observed from the figure above, these two metrics have shown a striking correlation with Bitcoin price for the last 18 months.

Ethereum Overview in Quarter 3

Hard fork London and EIP-1559

Q3 marked an important milestone in Ethereum’s evolution with the London Hard-Fork and numerous proposed updates. Among them, EIP-1559 is the most notable update with a proposal to improve transaction savings based on the network density and another proposal to burn a portion of Ethereum’s transaction to mitigate the impact of inflation on ETH price. As of October 1st, the record has witnessed a total of 409,669 ETH being burnt.

Ethereum price has had a strong recovery right before the London Hard Fork event and quickly rebounded to the 4,000 USD level. In addition, various indexes of the Ethereum network also experienced significant changes in Q3 such as Total Locked Value, Number of Individual Wallets, Amount of ETH 2.0 Staked and Average Gas Fees.

Layer 2 Overview and Arbitrum’s hype

The Layer 2 Scaling Solution on the Ethereum network in Phase 3 experienced a tremendous explosion of Arbitrum when the Arbitrum mainnet was completed and officially launched in early September. During this quarter, Arbitrum raised a total amount of 120M USD from a list of many well-known Cryptocurrency Venture Capitalists and the Total Value Locked on Arbitrum has reached 1.8B USD just 4 days after the mainnet.

Prominent Market Trends in Quarter 3

The GameFi Boom

GameFi (abbreviation of Game Finance which is a combination of Gaming and DeFi) has recently become one of the most prominent trends in the crypto market in Q3 and has risen to be a new craze that’s making games built on the blockchain to become popular. These games have attracted a lot of investors and players from even the traditional gaming market.

Axie Infinity has been the project to trigger this boom – the most popular crypto-based game and blockchain-using metaverse project. In July alone, Axie Infinity recorded nearly 200M USD in revenue, 16 times higher than the revenue in June thus pushing the cumulative revenue to grow 1,050%. Other than that, Axie’s capitalization also witnessed an increase from 315M USD to nearly 2.4B USD in just one month. The rise of Axie has helped a series of other blockchain games in the market to surge in capitalization during the July period.

According to the leading explorer Token Terminal, the total protocol revenue of Axie Infinity in Q3 had reached 800M USD marking an increase of nearly 5,000% compared to the second quarter of 16M USD, and therefore became the first game or dapp with the largest revenue in the world. Axie Infinity’s NFT assets recorded 1.8B USD in trading volume in Q3, up more than 1,400% compared with Q2 with only 118M USD (data from DappRadar). With the success of Axie Infinity (AXS), gamers have now had a whole new look in the blockchain gaming industry, especially towards play-to-earn games.

At the initial stage, most P2E games were developed on the Ethereum blockchain. There are many successful projects that have attracted a huge amount of players such as Axie Infinity, Decentraland, The Sandbox, and Sorare.

However, in Q3, Binance Smart Chain (BSC) has had a strong performance as there are more and more gaming projects that continue to flourish on the chain. Names such as CryptoBlades, MyDefiPet, Faraland or Mobox have recently gained a lot of attention in the gaming community.

The end of July marked a typical event as daily trading volume in Binance Smart Chain had tripled the amount of the previous period. This was mainly triggered by the craze of GameFi projects, especially CryptoBlades. CryptoBlades had ranked on the top of all games with the highest 7-day transaction as it reached 9.23M transactions around mid-August. In addition, CryptoBlades was also ranked #2 in terms of 30-day users of all games that have released tokens according to Dapp.

Apart from Ethereum and BSC, Polygon is also a name that has been in the spotlight in the GameFi world after launching Polygon Studios to develop its own Game & NFT ecosystem in Q2. Many NFT gaming projects are deployed on the Polygon network. Additionally, WAX, Enjin or Flow are also the top blockchains that are attracting many gaming projects.

The NFT craze

NFTs have been widely predicted by the community to become a major trend in the crypto market, and it came to fruition in Q3. August reported a record NFT trading volume of 5.2B USD, followed by September, also reaching an impressive figure of 4B USD. As a result, the Q3 NFT trading volume reached over 10.6B USD, up 704% compared to the previous quarter (DappRadar).

Among the NFT trading platforms, Opensea is the most popular with 7.4B USD in Q3 trading volume, accounting for more than 70% of the total market share. The runner-up was Rarible, which recorded 73.3M USD, while SuperRare came in third with 66.6M USD.

GameFi Trends has contributed significantly to the overall growth of the NFT market, NFT in-game assets recorded a trading volume of 2.3B USD in Q3. 

Another major contributor is digital collections or NFT avatars, the most prominent names CryptoPunks. In Q3, CryptoPunsk’s trading volume reached approximately 360,000 ETH (equivalent to 1.3B USD), up nearly 400% from Q2’s 75,000 ETH. On peak days in early September, the floor price for an NFT CryptoPunk was almost half a million USD (Dune Analytics statistical data). We have also witnessed many Punks traded for millions USD in Q3.

Besides CryptoPunks, the BAYC “ape” collection has also become very popular in the NFT market. Peaking on August 28, BAYC’s daily trading volume reached 53M USD. In addition, many NFT collections also contributed to the craze of Q3, namely a few: Meebits, Pudgy Penguin, CyberKongz, Loot, etc. with daily trading volume of up to millions of USD. 

The explosion of new ecosystems

Regarding the development of top blockchain platforms besides Ethereum, Q1 witnessed the strong growth of Binance Smart Chain followed by Polygon in Q2. By Q3, many new ecosystems recorded outstanding performance and became the spotlight in the market.

During Q3, the price of blockchain platform tokens surged significantly such as LUNA, AVAX, FTM, SOL, NEAR and these tokens continuously reached new all-time highs.

After a long period of infrastructure building, new blockchain platforms are ready to receive the inflow of money. In Q3, the Defi space experienced the releasing of many incentive programs to support the development of the ecosystem from building better infrastructure to encouraging projects and users participating in. Celo started with 100M USD, after that Avalanche, Algorand, Harmony, Fantom, Hedera, Kava and Cardano also launched their own incentive programs to attract liquidity with great value of money.

Due to the incentive program, the total value locked also changed significantly, money continuously poured into new ecosystems in Q3.

Notable among these new ecosystems are Avalanche, Solana and Fantom with steady growth in both market capitalization as well as TVL. All of them have already completed their core products in the ecosystem:

  • Bridge
  • Exchange (AMM/DEX)
  • Lending protocol
  • Yield farming products

With the more mature ecosystems reinforced by incentive programs; Solana, Avalanche and Fantom had witnessed a great movement in Q3.

Solana (SOL)

The Solana ecosystem experienced an impressive quarter thanks to the “Solana Season” Hackathon which took place during May and June. After the Hackathon, a series of new projects gradually appeared on Solana and achieved a huge growth, typically Saber (SBR) and Sunny (SUNNY). Although both of them are newbies in the ecosystem, they rapidly achieved the highest total value locked on the Solana ecosystem.

At the peak in Q3, Saber achieved a record in TVL with over 4.15B USD. Sunny’s TVL also surpassed 3.4B USD from zero within 2 weeks. The TVL of the entire Solana ecosystem reached a record on September 12th with 12.2B USD, nearly 20 times higher than on July 1st, making Solana the 3rd largest blockchain platform by TVL, just behind Ethereum and BSC.

Additionally, the game sector on Solana also made a mark with the token launch of Star Atlas, a space war game. After listing, 2 tokens of this game which are ATLAS and POLIS, they achieved a ROI, at all-time high, of 194 times and 134 times, respectively.

Avalanche (AVAX)

The Avalanche ecosystem recorded a breakthrough when the Avalanche Foundation announced Avalanche Rush, a liquidity mining program to introduce more applications and assets to its growing DeFi ecosystem. Soon after that, the TVL on Avalanche ecosystem quickly reached more than 2B USD in just 10 days, which was an increase of 570% (data from DefiLlama).

Moreover, in September, the Avalanche ecosystem has gained outstanding growth momentum, when it successfully called for 230M USD in  investment, which included participation from many famous venture funds: Polychain Capital, Three Arrow Capital, R/Crypto Fund, Dragonfly, CMS Holdings, Collab+Currency and Lvna Capital. The TVL of Avalanche continuously grew and reached a height of nearly 4B USD at the end of Q3.

Many tokens on the Avalanche ecosystem made a record growth during Q3, notably TraderJoe (JOE) and Teddy Cash (TEDDY).

Fantom (FTM)

Fantom Foundation also launched an incentive program valued at 370 FTM to promote DeFi and GameFi development in the Fantom ecosystem. Due to the incentive program, TVL on Fantom witnessed huge growth reaching 2.07B USD at the end of Q3, increasing 984% since July 1st (data from DefiLlama).

Besides, projects in the Fantom ecosystems also had an outstanding surge in capitalization in Q3.

Furthermore, Fantom’s game and NFT sector also had a bright spot in Q3 when Andre Cronje, founder of Yearn Finance, was actively building 2 products: RarityGame (Game) and Artion (NFT marketplace) at Fantom and promises about NFT bridge between Fantom and Ethereum.

Vietnam solidifies its position in the crypto market

Vietnam became the brightest name in the global market in Q3. Many studies reflect that Vietnam is leading in the crypto and DeFi adoption. These impressive numbers are shown in the video below.

In order to have an overview about the Vietnamese cryptocurrency market, let’s take a look at the Vietnam Blockchain & Crypto map in the infographic below.


The third quarter ended with strong growth of the entire market and opened up huge potential for GameFi, NFT, and new ecosystems. The crypto market was more refreshing and ready than ever for further growth in the last quarter of the year and beyond. Let’s embrace all challenges and opportunities ahead with Kyros Ventures.

Research Team