We have witnessed too many business forms ups and downs, and even destruction. Do you still remember how many major events happened in the crypto world and how many milestones were achieved during this magical year?

Since the beginning of this year, the price of Bitcoin has always been above US$30,000, which has also made many people full of confidence in the future market. The arguments of "the market enters a long bull" are emerging one after another. Optimists believe that Bitcoin will exceed $100,000 in 2022.

As the price of Bitcoin rises, mainstream institutions also pay attention to it. Some listed companies in have also begun to accept Bitcoin payments, or use it as asset reserves.

Another listed company that is constantly increasing its holdings in Bitcoin is MicroStrategy, which has enabled the "crazy buying, buying, buying" mode. In addition, the global payment platform Visa has launched cryptocurrency payment; asset management company Grayscale published an advertisement for Bitcoin trust fund (GBTC) in the " New York Times " newspaper to promote Bitcoin... The running entry of institutions has successfully increased the recognition of Bitcoin's value. In addition to institutional purchases, the legalization of Bitcoin in some regions has also become a major benefit to its fundamentals.

(Bitcoin Legalization Act)

structured products, the ETF ( exchange-traded fund ) that the crypto market has been looking forward to, finally implemented in 2021. In October this year, the first Bitcoin futures ProShares Bitcoin Strategy ETF of was officially launched, landing on the NYSE Arca Exchange, and then the SEC approved multiple futures ETFs one after another.

Although judging from price feedback, the impact of ETF on the crypto market has not met expectations. But no matter what, with the emergence of such compliant products, traditional institutional investors and ordinary users' confidence in encryption will continue to increase. At the technical level of

, this year Bitcoin ushered in an important soft fork upgrade of , Taproot, and received the consent of more than 90% of miners. This upgrade includes three items: Schnorr signature (BIP 340), Taproot (BIP 341), and TapScript (BIP 342). The upgrade ultimately reduces the transaction fees of Bitcoin networks and improves the anonymity and efficiency of transactions.

In addition, the number of non-zero addresses in Bitcoin exceeded 40 million by the end of the year, setting a record high.

For miners, the important participant in the Bitcoin ecosystem, 2021 is a year of migration.

In May this year, the State Council’s Financial Stability and Development Committee proposed to “crack down on Bitcoin mining and trading behaviors” at the meeting, setting off a new wave of supervision; Xinjiang, Qinghai, Inner Mongolia and other provinces and cities across the country successively issued bans to rectify and clean up the virtual currency mining, and a large number of mines were closed or went to sea. In the end, some miners found new mines in Kazakhstan , Texas, USA and other places, and continued to work hard on mining.

is affected by the shutdown of the mining machine, and the computing power of Bitcoin is also changing drastically. In April this year, computing power reached its peak, but it fell by nearly 50% between May and July; from the beginning of the year to date, Bitcoin computing power has increased by nearly 20%.

Meme: Started with jokes, it is popular in the community

If you bought $100 BTC at the beginning of the year, it will be worth $167.4 now; if you bought SHIB, guess how much is worth now? The answer is $62 million. This is the ultimate manifestation of the wealth effect of Meme coins.

A new sector was born in the crypto market this year: Meme coins, and representative projects include various animal coins such as Doge and SHIB. Meme culture can be commonly understood as "playing with memes", and any item with the attribute of "joke" can be called Meme coins. The beginning of

Meme culture originated from a major event in the traditional financial market at the beginning of this year - the GME defense war. To sum up, Wall Street retail investors jointly bought GME company stocks on Robinhood, causing losses to institutional short , and once reversed the status of retail investors and institutions.

Anti-traditional and anti-Wall Street movements were sung in mainstream society, and this trend of thought spread to the crypto market and was shaped into a more rebellious Meme culture. , the market prospects, business models, technological advantages, product highlights, etc. that investors once valued, have become interesting marketing and consensus cohesion in the Meme era. The "chief amplification officer" of

Meme Coin is Musk. He posts on Twitter every once in a while, "complaining" Dogecoin and "reversely attracting" many people outside the circle. Even in the eyes of many overseas "leeks", Dogecoin is the real Bitcoin. As Musk "calling orders" again and again, Dogecoin has made rapid progress, its market value has squeezed into the top ten, surpassing the leading DEX project Uniswap, with the highest increase this year by more than 100 times , and has triggered carnival on overseas social media, forming a positive cycle of price and voice.

At the same time, Meme currency represented by DOGE has gradually become a part of the multicultural culture of the crypto community. From March to May, various altcoins such as AKITA, Pig Coin (PIG), Dogecoin (DOG), Loser Coin (LowB) were born in batches; although they achieved amazing increases in a short period of time, they soon fell into a slump or went directly to zero.

Finally, only Dogecoin’s “imitation disk” Shiba Inu (SHIB) truly survived and “become bigger and stronger” . SHIB continued to rise steadily in the second half of the year, and finally hit an all-time high of US$0.00008845 in October; compared with the beginning of the year, SHIB's highest increase was more than 1.25 million times. The important reason for SHIB's rise is also inseparable from Musk's multiple "blame comments" and the successive launch of many mainstream platforms such as Coinbase. The rise of

SHIB has driven the revival of Meme culture and inspired representatives of emerging Meme coins such as GM (Good Morning), People.

Among them, GM's market value rose from zero to US$200 million in just 3 days of its release (up to US$400 million, and is still at US$100 million). People coin, in the name of DAO, crowdfunded the bid for a copy of the US Constitution and converted it into Meme coin after the auction defeat, and its price soared more than 50 times.

Overall, Meme culture has been fully integrated into the crypto community and has a strong communication influence with the subculture consensus. But we should also clearly realize that marketing and FOMO alone are not enough to promote the maturity and development of crypto finance. Technology and products are the primary productivity of change. Therefore, Meme coins can be a "seasoning" but it is difficult to become a "main dish". The DeFi sector is a bit deserted compared to the Meme currency's market performance, but if DeFi performance is seen from a higher perspective and more dimensions, it is not difficult to find that DeFi's evolution has never stopped.At the macro data level of

, DeFi has always maintained a positive growth trend.

DeFi Pulse data shows that as of December 21, the total value of assets (TVL) locked in the major ecological DeFi protocols has reached US$2.432 billion. If you look closely at the TVL's change curve, the "519" level black swan event is just a small twist in the upward trend.

Dune Analytics data shows that as the end of the year approaches, the number of independent addresses that have interacted with DeFi protocols has exceeded the 4 million mark for the first time, and a large amount of fresh blood is pouring in. At the individual project level of

, most of the "blue chip" DeFi have completed their major iterations of in 2021.

Uniswap v3 brings new possibilities for "active market making" to AMM; Aave v3 began to explore cross-chain lending; Curve v2 used mathematical formulas to re-optimize its market making curve, which not only resisted the impact of Uniswap v3 on its stablecoin market, but also dominated the top spot in the individual protocol TVL list for a long time with multi-chain strategy... Among the many "blue chips", the performance of slightly disappointing may be Compound and SushiSwap. The former had a contract loophole with a significant impact, resulting in the misdistribution of tens of millions of US dollars of COMP, and the latter was exposed to an internal storm. It is still unknown whether its long-planned next generation Trident can be successfully launched. At the trend level of

track, as the market structure of basic sub-sectors such as stablecoins, lending, and DEX is becoming increasingly stable, DeFi's focus is gradually shifting.

is the outbreak of derivatives . Here we have to mention the issuance and airdrop of dYdX. As the most popular project under the concept of derivatives, the market has placed high expectations for the value of dYdX. In addition, the project party's large-scale investment (7.5% airdrop ratio), most users who have interacted with dYdX have obtained airdrop returns of tens of thousands of dollars, which has also set off a new round of wool-fleeing craze in the market. However, from an industry perspective, although dYdX once exceeded the sum of all other DEXs with the support of trading and mining strategies, such stimulus is obviously difficult to last long. With the decline in daily trading volume of dYdX and the decline in currency price, the call for "derivatives explosion" has gradually weakened. We firmly believe that derivatives will definitely explode in the DeFi field like spot stock, but such explosions do not seem to be ignited by a single project’s issuance of coins.

The second trend worth paying attention to is that embraces traditional finance (TradFi) . The best part of this is the three lending giants - MakerDAO, Aave, and Compound. The former has been actively exploring how to introduce real-world asset collateral. The latter two companies announced new services for traditional financial institutions in the summer, Aave Pro (now renamed Aave Arc) and Compound Treasury. At the end of

, the DeFi 2.0 narrative aiming to reconstruct liquidity relationships and optimize capital utilization efficiency quickly emerged, and a number of emerging projects represented by Olympus DAO, TokeMak, Abracadabra, etc. emerged. Although there is still great controversy about the naming of "DeFi 2.0", putting aside the title, the core efforts made by similar projects - making liquidity services more sustainable is still worthy of recognition.

In addition to the above trends, multi-chain layout is also a major trend in the current DeFi track (see the "Cross-chain" section below for details).

NFT that attracts fans crazy × All things

Blockchain industry has spent ten years looking for a killer application direction that is enough to "become the circle". Last year's DeFi did not fully realize this dream, and this year's NFT is the only one.

In 2021, the annual landmark event in the NFT field is: In March, artist Beeple's NFT work "Everydays: The First 5000 Days" was sold at Christie's for 69.346 million US dollars, successfully attracting the attention of people in various fields such as traditional art.

First look at the chain games in the circle: Dapper Labs's popular NFT game NBA Top Shot's annual sales exceeded US$750 million, with more than 11.41 million transactions; Axie Infinity, a Southeast Asian chain game that led the "Play to Earn" trend, had sales of more than US$3.8 billion, with nearly 2.8 million daily active players, and the most expensive "Axie" priced at US$820,000; PFP (profile picture) type NFT representing CryptoPunks on December 19 had a market value of approximately US$2.64 billion and a floor price of more than US$240,000.

This year, many NFT projects have received full attention and set sales records: the BAYC series with "groups of descendants", the card game Parallel Alpha, and the TXT text version of the randomly generated equipment name NFT represents Loot...

Let's look at the traditional game's increase in NFT: Ubisoft will launch an NFT platform; NetEase's game "Eternal Haunt" IP authorized to issue NFT blind boxes; Epic Games' digital game platform Epic Games Store will use blockchain and NFT Games are open...

This year, chain games have surpassed the traditional game's positioning of "casual, entertainment, and competition", added finance, collection and display attributes, and broadened people's definition and understanding of games .

In addition, under the strong "playing and earning effect" of Axie Infinity, game guilds represented by YGG and others have also derived scholar (scholarships), game asset leasing, investment incubation and other business lines based on the main business of "making money", and triggered a financing boom in Q4.

, standing on the "First Year of the Meta Universe", looking into the distance

, putting the Meta Universe into the year-end inventory, is considered a hot topic for many vertical fields, but who makes the Meta Universe still a general concept with vague concepts, technological integration, and continuous evolution. The junction between

and Crypto mainly falls on the lower-level economic system and production relations. Specifically, a considerable number of industry insiders believe that all assets (identities, data, props, currency, transactions, etc.) in the universe should be tokenized (or at least based on distributed systems) and generated, circulated and destroyed in a decentralized manner.

Currently, the three virtual land platforms closest to this "conceived paradigm" in the circle, The Sandbox, Decentraland and Cryptovoxels, have all ushered in explosive growth this year.

The Sandbox has a current market value of over $200 million, with more than 630,000 NFTs and approximately 34,000 holders. Republic Realm purchased The Sandbox plot for $4.3 million in early December, setting a record of virtual land sales price. This year, rapper Snoop Dogg, Nipsey Hussle, NFT collector Cozomo de' Medici and others joined The Sandbox.

buyers whose public identity include Hong Kong real estate giant New World Development Group CEO Zheng Zhigang, singer JJ Lin (who also bought the Decentraland plot), Yuchi co-founder Wang Chun (who wants to build the Dogecoin enthusiast headquarters), etc. The Sandbox also established a cooperation with cartoon characters "McDull" and Adidas Originals, and received a $93 million financing led by SoftBank Vision Fund 2.

Decentraland has a current market value of approximately US$74.87 million, with more than 160,000 NFTs. The top spot in the plot transaction list is Fashion Street Estate, which was worth US$2.42 million (618,000 MANA) at the time. This year, Decentraland hosted the Metaverse Music Festival with 80 groups of artists (virtual avatars), RacingTime's virtual car show, Boson Protocol's virtual mall, and a virtual gallery that cooperated with Sotheby's.

Cryptovoxels has a current market value of approximately US$26.9 million and has nearly 400,000 NFTs. This year, Cryptovoxels began supporting Facebook (now Meta) account login, launching Scarcity Island, a virtual land with autonomous voting scenarios, and discussing internally the details of the native Token CV, which will be launched in April next year. MetaEstate, a real estate developer in Metaverse, also designed and built the Tron TRON ecological building complex on Cryptovoxels.

1 Last week, the total weekly sales of four meta-universe virtual lands, The Sandbox, Decentraland, CryptoVoxels and Somnium Space, exceeded $100 million.

Behind these "three majors", more emerging platforms inside and outside the circle are eager to try, setting off a wave of "land buying frenzy". At the same time, various "water senders" such as virtual real estate developers/contractors, small prop manufacturers in the metaverse, and service providers that rely on AR/MR to enhance NFT visual effects have also been coming one after another, bringing more cross-field compound talents and out-of-circle traffic to the crypto world.

In general, it is not an exaggeration to call 2021 the "first year of the meta-universe".

Web 3.0: The day of victory is not far away

For the next narrative of encryption - Web 3.0, the highest definition of industry consensus is "readable, writeable, and own" proposed by a16z partner Chris Dixon.

htmlOn November 8, the House Committee on Financial Services held a hearing on Capitol Hill on “The Future of Digital Assets and Finance: Understanding the Challenges and Benefits of American Financial Innovation.” At the

meeting, Bitfury CEO Brian P. Brooks also cited Chris' theory when answering a question from Rep. Patrick McHenry about Web 3.0.Brooks explained that in Web 1.0, users only have specific readings, so this is a "readable Internet only"; in Web 2.0, in addition to reading content, users can also publish content by themselves, but these contents are not owned by users, so they are just "writable Internet only"; and in Web 3.0, in addition to reading and publishing content, users will also truly have all the rights to the content, realizing a "readable, writable, and possessable Internet". After the meeting, Brooks' edited video of this answer was forwarded and circulated by industry insiders, helping people who are still confused to firm their beliefs like a shot of a heart-wrenching shot.

• 021, we saw the irreversible development of Web 3.0. Various infrastructures are becoming more and more mature, and upper-level applications are gradually promoting . MetaMask, the first choice portal for the decentralized world, has achieved a boom in business volume. After completing a $200 million financing, its developer ConsenSys has risen to $3 billion (although this doesn't seem very Web 3.0); Arweave, as a permanent decentralized content storage layer, also completed value discovery in the second half of the year; ENS's popularity after issuing coins and airdrops has continued to be online, which has also triggered in-depth discussions on the market's imagination of domain names; Mirror has become one of the regular channels for everyone to read high-quality content in the industry...

  While the crypto industry is firm in the prospects of Web 3.0, some representatives of the traditional Internet have expressed different views on this emerging concept. Musk is doubtful, and Jack Dorsey is on the topic of "Who does Web 3.0 belong to" and a16z started a heated discussion, without any speculation, and even played unblocking and blocking.

  Maybe we should recite this famous saying from Chris: At first they ignore you, then they laugh at you, then they will criticize you (where we are), and then it will be your day of victory.

  Ethereum defends its title as the king of public chains

  Although new ecological public chains have risen one after another this year, Ethereum's status as the "king of public chains" is still unshakable.

  data shows that the ETH price rose to $4,860 at the beginning of the year (November 10), and is currently temporarily reported at $4,050, up 450% from the beginning of the year; the market value of Ethereum has also increased from 11% at the beginning of the year to 21%, an increase of 10%. In addition, the value of the DeFi locked position on Ethereum has also risen from $18.6 billion at the beginning of the year to $167.5 billion, an increase of 800%.

  However, due to tightening domestic policies, Ethereum mining suffered a blow in June this year, and its computing power fell by more than 30% at one point; but in just two months, Ethereum computing power returned to its previous level, and has continued to hit new highs since then; the computing power is currently temporarily reported at 947 TH/s, up 223% from the beginning of the year. In terms of

  Gas, this year, was affected by NFT mint (casting) and airdrop brushing volume, and the Gas cost has always remained high. This has increased the cost of interaction between ordinary users and project developers, and forced some projects to turn to expansion solutions such as Layer 2 and other public chain ecosystems.

  In order to reduce Gas, the Ethereum community proposed EIP-1559 proposal, trying to make users more convenient to pay more reasonable handling fees by changing the settings of basic fees.

  This proposal has been controversial since it was proposed. Among them, the miner group whose income is directly affected is the most intense opposition, and many miners feel that they have become ecological abandoned children. To this end, Twitter user @Red Panda Mining launched a campaign to call on miners who oppose EIP-1559 to switch their computing power to opposition mining pools and swear sovereignty; although the operation ended in failure - opposition computing power accounted for less than 20%, it still made the entire crypto market hear the miners' voices. The

  controversy did not shake the developers' determination. EIP-1559 was realized in the "London Upgrade" in August, and the final effect is obvious to all. Since the implementation of EIP-1559, has destroyed a total of 1.243 million ETH (about 5 billion US dollars), opening a new era of "deflation" on Ethereum.

  In addition to the "London Upgrade", Ethereum has also completed two upgrades this year: the Berlin hard fork upgrade in April and the "Arrow Glacier" upgrade in December, with the main content of the latter being to postpone the difficulty bomb until next June.

  In addition to Ethereum 1.0, Ethereum 2.0 has also attracted much attention this year.As of the first anniversary of the launch of the Ethereum beacon chain (December 3), Ethereum 2.0 deposit contract addresses have received 8.502 million ETH, accounting for 7.24% of the ETH supply. There are more than 264,200 verification nodes on the beacon chain, and the number of addresses participating in ETH2.0 pledges has reached 56,393.

  According to the latest plan, the merger of Ethereum 1.0 and 2.0 will be carried out around the second quarter of 2022; after the merger is completed, the ETH locked in the Staking contract will remain locked and cannot be transferred. Although Ethereum has repeatedly missed its votes, as the king of public chains, it has never stopped moving forward.

  This year, Ethereum has a deeper connection with traditional finance . In April, Canadian regulators approved three Ethereum exchange-traded funds (ETFs); in the third quarter, US SEC documents revealed that holdings of institutional Ethereum products (mainly Grayscale Ethereum Trust) increased by 19%; in December, CME, the US announced the launch of micro Ethereum futures. Although the U.S. financial market has not officially launched Ethereum ETF, we believe that this day will not be too far away. The outbreak of the new ecosystem of

  and Layer 2 is

• 021, a year of collective outbreak of the new ecosystem. The explosion of the application layer of

  has brought unlimited glory to Ethereum Layer 1, but it also caused continuous congestion in on-chain transactions and high gas fees. Affected by this, the value of the Ethereum ecosystem began to spill over, and projects, users, and funds were looking for a new development soil that was faster and cheaper, which also became an opportunity for the new ecosystem to explode. In terms of

  public chain, from BSC to Solana, to Avalanche, Fantom, and Terra, major ecology is booming, infrastructure is gradually maturing, and a variety of applications are blooming. While locking up funds have repeatedly hit new highs, the value amplification of the secondary market has also been achieved.

  BSC, as the earliest rising new public chain ecosystem, has entered a relatively calm and steady growth period after experiencing an early rapid outbreak stage. Judging from the data, BSC's on-chain TVL value has long been ranked first in the emerging ecosystem (excluding Ethereum), and was not surpassed by the dark horse Terra until the end of the year.

  With its outstanding performance advantages and the support of SBF, Solana has become the most eye-catching emerging public chain in most of the year. As the end of the year approaches, Solana has begun another big move - supporting Neon Labs to build an EVM development environment for the chain, which may be another engine for Solana's continued growth. The explosion paths of

  Avalanche and Fantom are similar. After using the cross-chain bridge to open up the channels for capital entry and exit, the two emerging public chains have launched liquidity incentive plans of hundreds of millions of dollars in Polygon to attract projects (especially leading DeFi) and users to settle in. In hindsight, Avalanche and Fantom's strategy was a great success, and "building bridges + scattering money" has also become a classic strategy for the explosion of public chains, and has been imitated by some new public chains that started later.

  is approaching the end of the year, and Terra (LUNA) seems to be making a big splash like "profitability". Not only has it topped the TVL rankings, but it has also entered the top ten in the total market value rankings of cryptocurrencies, with its "cornerstone product" stablecoin UST, the market value exceeds DAI at the end of the year. In other ecology of

  , Polkadot and Kusama finally launched the long-awaited parachain slot auction in the community; DFINITY also officially launched the main network this year; Algorand is actively exploring how to combine TradFi and DeFi; the rise of vertical application public chains such as Flow and DeSo; teams such as Near, Tron, and Conflux have followed up on hot topics such as DeFi and NFT, and performed well in special IP market strategies. A public chain worth mentioning is the "heartbreaking" EOS. After expelling B1 and reshaping the brand, this husband chain, which has been "sentenced to death", has also brought some new vitality.

  Of course, facing many challenges from public chain ecosystems, the Ethereum ecosystem has not stopped. Layer 2 is the strongest counterattack given by Ethereum this year. The four major Rollup expansion plans (Optimism, Arbitrum, zkSync, and Starkware) have all received financing of tens of millions or even hundreds of millions of dollars this year. Polygon is rumored to receive US$50 million to US$150 million from Sequoia India.

  As the first emerging ecosystem to implement the "money-spreading" strategy, Polygon (MATIC) can almost be said to be the most eye-catching project in the cryptocurrency market in the first half of the year. Even on "519", the price of MATIC once turned positive. However, because Polygon currently mainly adopts a sidechain solution, it has been questioned by the Ethereum community whether it belongs to the orthodox Layer 2, but with the acquisition of two ZK Rollup development teams, Hermez and Mir, these disputes have gradually faded.

  Optimistic Rollup The two heroes Optimism and Arbitrum both went online this year. As Layer 2 solutions that are more in line with the upper-level awareness of the Ethereum community, Optimism and Arbitrum have successively welcomed the entry of Uniswap, the leading leader of DeFi. However, perhaps because gas prices are still relatively high compared to emerging public chains, these two Layer 2 networks (especially Optimism) are not as smooth as the community expects in terms of ecological expansion.

  , two projects that focus on ZK Rollup, zkSync and Starkware, have also been doing a lot this year. The former's zkRollup version EVM development work has achieved phased results, while the latter proposed the Layer 3 concept at the end of the year, intending to achieve multi-power expansion effect through recursive proof.

  As 2021 is about to end, the coexistence of multiple chains is becoming stronger day by day, and the situation of dominance of one family may never happen again.

  Cross-chain: The most clear trend at the moment

  The inevitable result of the collective outbreak of the new ecosystem is the expansion of cross-chain demand. In order to pursue the emerging wealth opportunities in the new ecosystem, the cross-chain demand of users' assets is also rapidly increasing. With many advantages such as wider coverage and more flexible docking,

  has surpassed centralized service providers and has become the main channel for carrying cross-chain flow of funds.

  Currently, there are no less than dozens of cross-chain bridge projects on the market. Putting aside Avalanche Bridge, Optimism Gateway, etc., the original underlying development team is led by the "official cross-chain bridge" that only serves a specific ecosystem. The third-party cross-chain bridges worth paying attention to include Multichain (formerly Anyswap), cBridge, Hop Protocol, etc. Multichain, the leader in the

  track, recently announced the completion of a new round of financing of US$60 million. On the list of investors, you can see the figures of Binance, Sequoia China, IDG Capital, Three Arrows Capital and other top institutions. Let's wait and see whether this can become the beginning of the journey of value discovery of cross-chain services.

  From the perspective of the evolution trend of the track, we will continue to pay attention to the following small directions.

  is an aggregate for cross-chain bridges. The current rapid growth of the number of cross-chain bridges is just like the growth of the number of DEXs a year ago. So why not make a cross-chain bridge version of 1inch to help users find the most ideal cross-chain path? In fact, several projects have begun to try this field, including ChainSwap, which recently completed a protocol upgrade and FundMovr, which performed amazingly.

  is to embed other financial services in addition to the bridging service, such as the cross-chain + transactions that FibSwap DEx, Li.Finance, XY Finance, Symbiasis Finance is exploring, as well as the cross-chain + lending solution mentioned by the leading DeFi protocol Aave in the V3 version.

  The third is to transcend the simple asset cross-chain and rise to a higher level of information cross-chain , and to achieve cross-understand contract verification and call, open up interoperability between different ecology.

  Centralized trading platform is listed in compliance with the listing of

  As a traffic entrance and value aggregation center, the centralized trading platform (CEX) plays an indispensable role in the crypto financial ecosystem.

  's top compliant trading platform successfully rang the bell this year, and the leading cryptocurrency companies have been listed one after another.

  htmlIn December, Coinbase, the largest compliant crypto trading platform in the United States, submitted an S-1 registration form to the US SEC, which was listed directly on the Nasdaq with the stock code COIN. Coinbase is also known as the "first stock on crypto exchanges."
  htmlOn July 29, Robinhood, a brokerage platform focusing on retail investors in the United States, was officially listed on the Nasdaq Stock Exchange; it was the first to open a Dogecoin trading channel in the Meme wave at the beginning of this year, and it attracted much attention from the crypto market.
  htmlOn October 19, Bakkt, once known as the "Light of the Bull Market", officially logged on to the New York Stock Exchange with the stock code BKKT.

  According to foreign media reports, Binance founder and CEO Zhao Changpeng said in a recent interview that his US subsidiary (Binance US) may conduct an initial public offering (IPO) within the next three years. The listing of the

  compliant crypto trading platform means that the traditional market's affirmation of crypto finance is equivalent to the SEC opening a door to the entire industry and boosting the crypto world; in the future, as the popularity increases, more funds will enter through these platforms and act on the entire crypto market. For traditional finance, crypto exchanges are one of the few sustainable profitable industries outside the mining industry and are well-deserved blue-chip stocks.

  The favor of traditional finance for crypto finance is also feedback on the primary market financing of crypto exchanges. In July this year, the FTX Exchange announced that it had completed a US$900 million Series B financing, with a post-investment valuation of up to US$18 billion. Investors include Sequoia Capital, SoftBank, Thoma Bravo, Ribbit Capital and Circle. After 3 months, the FTX Exchange raised US$420 million in the B-1 round of financing with a valuation of US$25 billion (the valuation rose by nearly 39%), and 69 investors including BlackRock and Tiger Global participated in the investment.

  It is worth mentioning that FTX has also sponsored many international events and teams this year, including: League of Legends Championship Series (LCS), Mercedes AMG Petronas F1 Team, Major League Baseball, NBA Golden State Warriors and Miami Heat, International Cricket Council, Super Bowl, TSM E-sports Club, etc., continuously broadening the boundaries of the encryption circle.

  In late November, media reported that Zhao Changpeng's net worth reached US$90 billion, becoming the richest Chinese, and among the top ten richest people in the world. Subsequently, the news that the "richest Chinese change of ownership" occupied the headlines of major news platforms and attracted attention. Zhao Changpeng took the initiative to claim that "valuation without liquidity does not make much sense."

  4. The crypto industry is moving towards compliance and embraces supervision

  In the past year, with the diversified development of the crypto world, global policies have been tightened and supervision has become stricter.

  China cleared out digital asset mining and trading industry

  As early as 2017, seven ministries and commissions jointly issued the "94th Notice", prohibiting cryptocurrencies from operating and trading in China, but there are no clear restrictions on cryptocurrencies mining. This year, my country has explicitly banned the existence of crypto mining in China.

  htmlOn May 21, the State Council Financial Committee proposed to "crack down on Bitcoin mining and trading behaviors" at the meeting. Since then, Xinjiang, Qinghai, Inner Mongolia, Yunnan and Sichuan have issued relevant policies to rectify and clean up virtual currency mining.
  htmlOn September 24, The People's Bank of China and ten other ministries and commissions jointly issued the "Notice on Further Preventing and Handling the Risk of Speculation in Virtual Currency Transactions", which clearly emphasized that the implementation of business such as fiat currency exchange for virtual currency, currency transactions, and issuance of coins is an illegal financial activity, and overseas virtual currency exchanges provide services to residents in my country through the Internet is also an illegal financial activity.

  After that, many trading platforms including Binance, Huobi, OKEx announced the removal of mainland Chinese users and exit from the Chinese market.

  The United States has increased its penalties and expanded its cryptographic regulatory boundaries

  2021, cryptographic regulatory incidents in the United States have become frequent.

  From the perspective of law enforcement, the number of times the SEC (SFC) and CFTC (Commodity Futures Trading Commission) mentioned cryptocurrency sanctions in the press release increased by 25 times; in terms of specific amounts, the amount of SEC fines increased from US$41 million in 2020 to US$562 million in 2021, an increase of 13 times, while the amount of CFTC fines increased from approximately US$9 million in 2020 to US$716 million, an increase of more than 80 times. Of course, an important reason for driving data growth is that some sanctions are fined large.

  Interestingly, according to media statistics, more than 70% of the SEC's law enforcement actions ended in settlement (payment of fines), and the most commonly used reason for the SEC is "violation of the Securities Act." The SEC sued Ripple last year, but it took more than a year to fail and a settlement is likely to be reached in 2022.

  In addition, this year, Gary Gensler became the chairman of the SEC. He was relatively radical in crypto finance regulation and launched investigations on Terraform Labs, Marathon Digital and other companies within one month. He also repeatedly reiterated that regulatory measures on cryptocurrencies will not be changed in the future and the relevant companies must report to the SEC for registration.

  In addition to CFTC and SEC, the US General Currency Verification Office (OCC) also jointly conducted a survey called "crypto sprint" in October this year, jointly conducted a crypto sprint in October, rigorously reviewing the crypto industry, and finally came to a conclusion that it was not friendly to the crypto industry, and also hinted that action might be taken later.

  Multiple departments in the United States speak out and enforce the law, and put forward regulatory requirements for the crypto industry. In fact, it is essentially a struggle for administrative power. encryption industry is originally an emerging industry, and there is no specific division of which party should be under the jurisdiction. For US regulators, whoever can have the right to speak in the crypto market will be able to influence the direction of the industry.

  At present, only SEC has real influence and voice. The U.S. Congress is trying to change that through the Digital Commodity Trading Act. The bill was proposed by U.S. Rep. Michael Conaway last year to establish a federal definition for the “digital commodity exchange,” put it in its own legal category and allow the CFTC to monitor it.

  At present, the bill has returned to Congress as a draft, and lawmakers are also actively discussing with crypto practitioners.

  There is another topic that has attracted much attention in the United States' regulation this year: cryptocurrency taxes.

  This year, the U.S. Congress proposed the Infrastructure Investment and Employment Act, which clearly requires "brokers" to report transaction information to the IRS for more than $10,000. Some people believe that the bill's definition of "broker" is "too broad and vague" and may impose these requirements on miners and wallet developers, not just cryptocurrency exchanges like Coinbase. Some crypto-friendly senators began trying to patch the issue, proposing new amendments, but were eventually rejected.

  At present, the bill has been signed by Biden and will be officially implemented from 2022.

  The regulatory measures in other countries are gradually becoming stricter. In September this year, relevant financial departments in South Korea strengthened supervision of cryptocurrency exchanges. All Korean cryptocurrency exchanges must register with the financial sector before a specific time, provide a compliance certificate from the Internet security agency, and work with banks to ensure the real name of the account, and unregistered exchanges will close services after September 24.

  This measure has led to the closure of hundreds of Korean cryptocurrency exchanges. However, as the first country to legalize cryptocurrencies, the South Korean authorities said that the original intention of the policy was to maintain the healthy and orderly development of the crypto market.

  In addition, with the popularity of chain games and the establishment of the gold-breaking ecosystem, Southeast Asia has become a new blue ocean in the crypto-gold market this year, and many trading platforms have also moved here one after another.

  5. Security Shadow: Amount loss increased by 1000% year-on-year

  At the end of 2020, we had specially conducted a year-on-year review and inventory of DeFi security accidents. Statistical results show that the total amount of funds lost by the DeFi industry due to hacking incidents throughout the year was as high as US$177.4 million.

• 021, we don’t even need statistics to know that the total amount of funds lost this year is much higher than last year. In one incident with Poly Network alone, hackers stole $610 million.
  htmlOn August 10, the cross-chain interoperability protocol Poly Network was suddenly attacked. Based on the market price of the relevant assets at the time of the incident, this is not only the largest hacker incident in DeFi history, but also the entire cryptocurrency history, surpassing the Mt.Gox incident (744,408 BTC, with a total value of about US$400 million at that time), and the 2018 Coincheck case (523 million XEMs, with a total value of about US$534 million at that time).

  Rekt data shows that has had 161 hacking incidents in the DeFi field so far in 2021, with losses of up to US$1.86 billion, an increase of nearly 1,000% year-on-year. Among them, the top ten items in the amount loss are: Poly Network (US$610 million), Vulcan Forged (US$140 million), Boy X Highspeed (US$130 million), Cream Finance (US$130 million), BadgerDAO (US$120 million), Venus (US$77 million), Compound (US$71.1 million), AnubisDAO (US$60 million), EasyFi (US$59 million), Uranium Finance (US$57.2 million).

  From the perspective of the frequency of events, the cross-chain track has become the focus of hackers this year . In addition to Poly Network, Chainswap, Multichain (formerly Anyswap), THORChain and others have also encountered murderous actions. The reason is that, first, cross-chain services are a capital-intensive track, second, cross-chain services often involve the interaction between multiple chains and multiple contracts, and the structure is more complex.

  In addition, there were also many huge security incidents in the CeFi field in 2021. The more typical case was the theft of three exchanges. Liquid, BitMart, and AscendEX lost $91 million, $150 million and $77 million respectively.

  From the perspective of attack categories, hackers' methods are varied, from exploiting logical defects, to lightning loan attacks, transaction exclusion attacks, private key cracking, and even breaking key information through social means... Hackers hiding in the dark will not let go of any vulnerabilities that may be exploited.

  security situation is becoming increasingly serious. What can practitioners and users do?

  From the perspective of the project party, first, it is necessary to conduct sufficient testing in advance when the product is launched, especially to test the agreement pressure in extreme cases; second, it is necessary to seek a professional third-party auditing agency to conduct a comprehensive review of the agreement; third, it is necessary to actively mobilize the community's strength through some bug bounty plans; fourth, it is possible to consider integrating some insurance projects; fifth, disaster recovery plans can be deployed in advance for some specific hacked scenarios.

  For users, first, they need to maintain good web access and wallet operation habits; second, they need to maintain rational investment thinking and reasonably control their positions; third, they need to use a certain DeFi agreement to pay attention to whether the project has completed the audit.

  Finally, it is worth mentioning that many DeFi security incidents (including Poly Network) that have occurred in the past two years have one common feature - hackers eventually return a certain amount of stolen money due to identity leakage and are forced to actual legal pressure. Related cases tell us that although DeFi has achieved decentralization at the interactive level, every human protected and bound by law is the subject of DeFi, so DeFi is not an inability to do so. When assets suffer unexpected losses, the law is still a reliable weapon.

  VI, 2022: Crypto maintains innovation and moves towards mainstream

  Looking back at 2021, from the leaders represented by Bitcoin and Ethereum, to various application fields such as DeFi, NFT, and chain games, to infrastructure such as public chains, Layer 2, and cross-chain protocols, it has achieved great development. At the same time, supporting components and services such as wallets, data analysis and security companies have also silently undertaken and protected value.

  has many highlights in 2021, and the sectors are rotating rapidly. There are still many small hot spots and small trends that have not been described in detail in this article, such as NFTFi, SocialFi, decentralized storage, decentralized oracle, liquidity release plan...

  After 2021 is connected, we look forward to the Crypto industry in 2022 continuing to become the mainstream proposition of globalization and ushering in richer innovation in more vertical industries.

  macroscopic, Web 3.0, metaverse, NFT and DAO will still be the keywords of investment, and the combination of the entertainment and consumption fields and blockchain will continue to deepen; various compliant derivatives represented by Bitcoin spot ETFs are expected to be approved and guide more traditional funds to enter the crypto industry, and custody and compliance services will also further grow; the crypto regulatory policies of major countries are becoming clearer, and more central bank digital currencies have entered the implementation stage, and some countries will follow El Salvador's footsteps to expand their application scenarios for Bitcoin...

  's leading exchanges may be listed in the traditional secondary market; Ethereum 1.0 and 2.0 Merger will become a landmark milestone in the history of public chains; legendary crypto funds will usher in a bumper year; talents from traditional finance and technology fields will continue to pour into and build the crypto industry... In terms of

  segmentation, the new ecosystem that includes new public chains and expansion solutions still corresponds to broad growth space; automatic investment and passive income products have new opportunities; platform services with entrance and aggregation properties will emerge; there will be innovations in token issuance methods, fundraising methods and decentralized governance; DeFi with stronger capital efficiency will emerge...

  GameFi and the Game Guild will enter the next stage of development to further realize the initial vision of the metaverse; ownership economy and creator economy will further in SocialFi The attempt was verified; green and privacy will move from concept to large-scale adoption...

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