Opportunities in the Future of the Web3 Industry

In “Christmas is Approaching: What Lies Ahead for the Market Trends,” it was mentioned that potential market trends might occur in the crypto market in December.

For further details, you can refer to the provided link: Christmas is Approaching: What Lies Ahead for the Market Trends.

BTC experienced a prolonged decline since the end of 2021, but it began gradually rising in 2023. Although the market conditions this year are not as robust as the bull market of 2021, there are still plenty of opportunities. Notable events include the rise of the AI sector triggered by ChatGPT, increased attention to the LSD sector following Ethereum's merge, and the ecosystem projects gaining momentum due to Arbitrum's airdrop distribution, as well as developments related to BTC Inscription.

Since October, BTC has been on a continuous rise, breaking through $32,000, reaching a high point not seen in over a year and a half. On one hand, BTC has gone through an extended consolidation period, resulting in a more favorable chip structure. On the other hand, the continuous stimulation of investor interest comes from the approval of BTC spot ETFs, the upcoming BTC halving, and the anticipated interest rate cut in the United States in 2024.

With the recovery of BTC prices in the industry, the Web3 sector is also expected to present numerous new opportunities. WikiBit has compiled several sectors that may offer opportunities in the upcoming period.

Bitcoin Inscription

“Inscription” refers to the technical process of storing additional information in the units of Bitcoin called satoshis. From a technical perspective, each Bitcoin is divided into 1,000,000 units known as satoshis (SATS), and Inscription involves adding extra information in this storage space. This is done using the Ordinals protocol, and the information can include text, images, videos, audios, and more.

Based on the type of content being placed, Bitcoin Inscription can be categorized into two main types: text-based Inscription and image-based Inscription.

• Text-based Inscription is primarily used for creating tokens, such as the BRC-20 Token standard. The BRC-20 Token standard is a protocol for creating tokens on Bitcoin, similar to the ERC-20 Token standard on Ethereum. It allows users to create their own tokens and trade them on ordinal markets.

BRC-20 tokens have experienced significant gains from early stages to the present, with some seeing increases of thousands or even tens of thousands of times. This has attracted increasing attention. In the early stages, the Inscription was filled with speculation, and as the Inscription gained popularity, development teams gradually joined the BTC ecosystem for value creation. Additionally, investment institutions have started to participate in this space, making it worth monitoring in the future.

Layer2

Ethereum Layer 2 refers to a set of scaling solutions built on top of the Ethereum main chain, aimed at improving the performance and scalability of the Ethereum network. As the number of users utilizing blockchain increases, Layer 2 helps enhance the performance and scalability of the Ethereum network. Its significance lies in:

• Increased Transaction Throughput: Ethereum Layer 2 allows some transactions to be moved off the main chain, thereby reducing the burden on the main chain and improving overall transaction throughput.

• Reduced Transaction Costs: Due to the potential impact of network congestion on transaction fees on the Ethereum main chain, Layer 2 solutions can offer cheaper and faster transactions. This is because they execute on sidechains or state channels, reducing the frequency of interactions with the main chain.

• Improved User Experience: By reducing transaction confirmation times and costs, Layer 2 significantly enhances the user experience.

• Support for More Complex Smart Contracts: Layer 2 solutions, by providing lower costs and higher performance, encourage developers to implement more complex smart contracts.

On the path to Ethereum's scalability, Proto-danksharding, also known as EIP-4844, is worth paying attention to. This upgrade has the potential to allow Layer 2 to lower costs while delivering better performance. After the upgrade, Layer 2 will further expand its advantages, lowering the barriers for users and projects to join its ecosystem.

Emerging Narratives

In every cycle, new trends emerge, attracting substantial attention and creating significant value. Ethereum has been a foundation for various projects, including the development of DeFi, GameFi, NFTs, and more. Often, when a new trend arises, it brings about a wealth creation effect. While some projects may resemble scams, exhibiting unimaginable gains or annual returns during the process, time tends to weed out fraudulent ventures, leaving behind projects with genuine value.