Arrangement Compilation: Shenchao TechFlow

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

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

Host: Frank Chaparro, The Block

Speaker: Alok Vasudev, co-founder of Standard Crypto

Original title: Cryptos Best Bear Market Of All-Time

Podcast: The Block

programme:Link

Bull-bear evolution trend and application layer explosion

Alok discusses some of the changes and trends in the bear market. He mentioned that in a bear market, the speed of transactions will slow down, but the quality of transactions will become better. He believes that participants in the current market are more serious and are no longer participating because they heard that the crypto space is cool or chasing the hype. There are now many founders in the market who are entering the crypto space for the second or third time. These founders Have more experience and better understanding.

Frank and Alok discuss why the market is changing. Alok believes that BlackRock CEO Larry Fink has changed his views on Bitcoin and cryptocurrencies, which may be an important factor in the market changes. Alok mentioned that the crypto market may have been undervalued in November and December last year, because cryptocurrencies and blockchain technology are historically developing in the right direction, and the market should reflect the equilibrium prices of these assets based on the progress made.

Regarding crypto market trends. Alok believes that every crypto cycle there will be a new blockchain application to fuel the bull run. For example, the 2013 bull market was mainly driven by Bitcoin, the 2017 bull market was driven by tokens and ICOs, and the 2021 bull market is driven by DeFi protocols and NFTs. He believes the next cycle will likely be driven by new applications because we are no longer as constrained by infrastructure as we once were.

They discuss the biggest barriers to application layer explosion. Alok believes that in order for more consumer-grade applications to work, someone first needs to have a wallet. He believes that as more people start using wallets, it should become less difficult to use and become as easy as using a browser. This means that cryptocurrency wallets should become more user-friendly, easy to access and operate, thereby promoting more people to participate in the use of cryptocurrencies.

Alok mentioned"small network effects"The concept means that when the number of users of a new product or service increases, the value of the product or service also increases. Network effects are a common economic phenomenon that states that the value of a product or service is directly proportional to the number of its users.

Aloks point is that there are enough users now to start forming these small network effects in new products. This means that as more users start using a new product or service (such as a cryptocurrency wallet or app), the value of the product or service will increase. This added value may manifest as a better user experience, more features or services, higher security, etc.

Alok believes that social networks need to be relatively niche from the beginning and not introduce a large number of celebrities from the beginning. Successful social networks are those that can cultivate their own celebrities, rather than those that introduce celebrities and ask them to bring their own fans. network.

Alok believes that the big opportunity for social networks lies in figuring out tomorrow’s Status Game, which may include NFTs and other cryptographic features. He believes that the cryptocurrency-centric social network is a cool place to be because it ticks all the boxes. It is still relatively niche, but he believes that many cryptocurrency people are on the right side of history.

The Potential of Crypto Gaming and the Economic Crisis

Alok and Frank turned to the discussion about games. Alok mentioned an interesting investment strategy of looking back at the last market cycle to identify projects that resonated but might not have been entirely successful. He believes that these projects may be good investment opportunities. Alok gave two examples, Cryptokitties and Axie Infinity. Both games succeeded to a degree, but had some flaws. He believes that these games demonstrate the great potential of gaming in the cryptocurrency market.

They discuss the economic crises in the game and how to manage them. Alok believes that the economic crisis in the game may be due to the decline of token prices, market fluctuations or other factors. He mentioned that in order to deal with these crises, game developers need to take some measures to maintain the attractiveness of the game. He believes that financialization is an effective solution that can help attract players and provide them with additional incentives.

Alok also mentioned that financialization in cryptocurrencies and games can be achieved through token rewards, token economies, DeFi protocols, etc. These financial means can help game developers attract players and provide them with additional incentives. He believes this is an effective way to help games remain attractive while token prices are under pressure.

Alok believes that Axie Infinity is an important node for many game developers, prompting them to delve deeper into the field of cryptocurrency. He mentioned that the success of Axie Infinity shows that games can remain attractive even when token prices are under pressure. He believes this is because financialization in games can help attract players and provide them with additional incentives.

The combination of AI, ZK and blockchain

Alok introduced their investment philosophy, emphasizing that they are more concerned with finding potential entrepreneurs rather than pursuing a specific investment theory. They believe that the key to investment success is to find potential entrepreneurs, rather than pursuing specific investment theories.

They discussed the intersection of artificial intelligence and crypto, with Alok seeing a deep connection between the two. Alok mentioned that the artificial intelligence and encryption industries are both technology-driven fields, both are developing rapidly and both have great potential. He believes that both fields are exploring new business models and application scenarios, which may have a profound impact on the entire society and economy.

Both the fields of artificial intelligence and encryption require massive amounts of data and computing power. The field of encryption can provide a secure, transparent and decentralized data exchange and computing platform for artificial intelligence. At the same time, artificial intelligence can provide the encryption industry with smarter and more efficient transactions and contract execution.

Alok also mentioned that artificial intelligence can help the encryption field better predict market dynamics and risks, and the encryption field can provide safer and more efficient payment and trading platforms for artificial intelligence.

With the development of blockchain and encryption industry technology, NPCs in the game may have their own bank accounts and wealth. He believes that this will provide game developers and players with more opportunities for innovation and interaction.

For example, NPCs may engage in trading, investing, or other financial activities with players. This situation will make the game more interesting and realistic. Players can have more complex interactions with NPCs and experience a more realistic game world. At the same time, this will also provide more business opportunities for game developers, such as advertising, promotion or other commercial activities through NPCs.

Alok Vasudev discusses the impact of technological developments on the crypto market, specifically the advancement of zero-knowledge proof (ZK) technology. Alok mentioned that zero-knowledge proofs allow one direction to prove to another direction that a statement is true without revealing any other information. This technology has many applications in the field of encryption, such as protecting the privacy of transactions, verifying the correctness of smart contracts, etc.

Alok believes that ZK technology will enhance trust in the market. By using ZK technology, both parties to the transaction can verify the correctness of the transaction without revealing any other information. This will help increase transparency and trust in the market. Second, ZK technology will help improve the efficiency of the market. By using ZK technology, both parties to the transaction can complete the transaction more quickly and securely. This will help improve the liquidity and speed of transactions in the market.

Finally, ZK technology will help to expand the range of applications in the market. By using ZK technology, the encryption field can better meet the privacy and security needs of users. This will help to attract more users into the market and expand the application scope of the market.

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

Alok believes that market cycles play an important role in promoting technology research and development. He explained that market cycles can inject funds into technology research and development. During a bull market, the price of a cryptocurrency increases and market participants’ assets increase in value. This means more funds are available for technology research and development. These additional funds can help develop new technologies, optimize existing technologies, or expand the applications of technologies.

Alok pointed out that the progress of the encryption market far exceeds past levels, and the market fundamentals are healthier. The current encryption market has more participants, more applications, more technological innovations, more compliance, etc.

Alok specifically mentioned DeFi protocols and considered them to be the most ideal venture capital candidates. Alok believes that the DeFi protocol has the following advantages:

Low capital requirements: DeFi protocols generally do not require significant capital investment because they are based on blockchain technology and do not require traditional centralized infrastructure. This makes them ideal for venture capital investments.

Strong defensibility: DeFi protocols are often highly defensible because they are decentralized and not susceptible to attack or manipulation. This makes them more stable and secure in the market.

High operating leverage: DeFi protocols typically have high operating leverage, as they have almost no operating expenses and users bear transaction fees. This allows them to operate more efficiently and generate higher returns.

Alok also mentioned that the income of DeFi protocols is different from that of software companies. Software companies usually need to bear high operating expenses, while DeFi protocols have almost no operating expenses, and users bear transaction fees. This allows DeFi protocols to operate more efficiently and achieve higher returns. Alok believes that DeFi protocols are the best business models ever.

Alok also expressed his expectations for Bitcoin’s renaissance. He believes Bitcoin may be experiencing a renaissance. He mentioned that Bitcoin was once a vibrant ecosystem that attracted many developers and technology enthusiasts. However, over time, this vitality gradually disappeared. But he believes Bitcoin is recapturing that energy and that many new entrants to the crypto market may not realize Bitcoin’s potential.