Recently, Alliance DAO has gained significant influence by successfully incubating Web3 consumer applications such as Pump.fun and Moonshot. This article first summarizes Alliance DAO's investment philosophy regarding the Web3 consumer sector and presents observations on this sector, reviewing the current mainstream paradigms of Web3 consumer applications, the challenges they face, and potential opportunities. Finally, we summarize our reflections on the investment theory of Web3 consumer applications.

Alliance DAO's Incubation of the Web3 Consumer Sector

Since its launch, the Alliance DAO Accelerator has incubated or invested in 28 Web3 consumer applications. They can be roughly divided into 7 categories:

1. Life Style

• Definition: Projects aimed at cultivating novel and healthy lifestyles for users through Web3;

• Quantity: 3;

• Specific Projects:

• StepN: A Web3 lifestyle application with a core innovation mechanism of Move to Earn, where users can purchase running shoe NFTs, track their exercise data, and receive token rewards.

• Sleepagotchi: A Web3 sleep monitoring and Sleep-to-Earn relaxation game mobile application, a card gacha nurturing game where sleep earns tokens, which can be used to participate in gacha draws.

• GM: A Web3 AI agent for health management that uses AI to enhance health and generate income.

1. Games:

• Definition: Web3 games or GameFi;

• Quantity: 10;

• Specific Projects:

• Axie Infinity: A card game developed by Sky Mavis that allows players to breed, raise, battle, and trade Axie creatures.

• Genopets: A Move-to-Earn NFT mobile game on Solana that makes an active lifestyle fun and rewarding. Genopets are digital pets whose evolution and growth are closely tied to the player. As players explore, battle, and evolve, their daily steps fuel their journey in the Genoverse, earning cryptocurrency in the game.

• Nine Chronicles: A decentralized card-based fighting RPG game.

• Chibi Clash: Chibi Clash builds a Web3 game world centered around its flagship auto-battler game. Inspired by the gameplay of Hearthstone Battlegrounds and the art style of MapleStory, it is an asynchronous PvP game where players can recruit, upgrade, and deploy troops to battle.

• Primodium: Primodium is building a fully on-chain, open-source, composable game where players aim to gain map control, research technologies, and expand their factories.

• Starbots: A robot battle NFT game where players can create fantasy robots to compete against others and collect NFT items and tokens.

• Legends of Venari: A blockchain game startup that has created an exploratory creature collection RPG. In Legends of Venari, players can capture, tame, and collect Venari creatures in a player-driven sandbox, competing for territory and rare resources.

• Force Prime: A full-chain strategy Web3 gaming platform that offers a multiplayer hero battle experience. Players can cultivate and customize their heroes to battle against players worldwide.

• Amihan: The first game from the game studio FARM FRENS, a casual farming mini-game.

• Wildcard: A Web3 card collection game aimed at gamers, fans, and collectors.

1. Crypto Speculation:

• Definition: Products focused on meeting users' crypto speculation needs;

• Quantity: 3;

• Specific Projects:

• Pump Fun: A meme coin launch platform where users can launch a token that can be traded immediately without providing liquidity.

• Moonshot: A platform for discovering, buying, and selling meme coins, allowing users to deposit cash using credit and debit cards and cash out assets via bank transfer at any time.

• Candlestick: A crypto opportunity radar supported by actionable trading signals and predictions, providing extensive data on the highest gainers, biggest losers, and tokens with the highest trading volume.

1. SocialFi:

• Definition: Tokenizing users' influence on social media platforms to form new speculative projects;

• Quantity: 6;

• Specific Projects:

• fantasy.top: Fantasy is a SocialFi trading card game (TCG) where players can compete using trading cards of crypto influencers from the Twitter platform, monetizing their social capital and research expertise.

• 0xPPL: A decentralized social network for crypto-native users that aggregates content from Lens, Farcaster, and Twitter, encapsulating some crypto functionalities.

• time.fun: A time tokenization platform that allows time holders to connect with fans. As time holders provide more value to fans, the value of their time naturally increases due to market demand. Whenever someone trades their time, time holders can earn ETH from transaction fees and redemptions.

• fam.: Fam is a web3-native community hub for discovering, organizing, and enjoying activities within the web3 family. Fam uses on-chain identity to allow users to easily find and connect with fellow holders, no matter where they are.

• Tribe.run: Tribe is a Solana-based crypto social protocol. SocialFi, private groups, entry requires tokens, speculative, and can host video or voice live streams.

• EarlyFans: EarlyFans is a SocialFi product on Blast L2, where creators can make public commitments and auction those commitments, while fans can also initiate bribes and auction bribery rights. If the creator refuses or the commitment expires, all funds are returned.

1. Creator Economy:

• Definition: Web3 content distribution platforms that provide new economic models for content creators (text, video, art, etc.);

• Quantity: 2;

• Specific Projects:

• Koop: Koop enables any creator, collector, or community to organize and fundraise through NFT art or collector passes. Funds from collector passes form a treasury (or bank) for each community to support their on-chain projects and tasks. The community can then directly manage their finances, leverage the unique skills of their members, and manage their organization in fun and social ways.

• CreatorDAO: CreatorDAO is a decentralized autonomous organization (DAO) focused on accelerating creators' careers and granting them shared access to capital, technology, and community. CreatorDAO provides creators with guidance, professional tools needed to develop their brands, and a community that invests in each other's success.

1. Finance:

• Definition: Products aimed at reducing users' costs of using and managing crypto, such as deposits and withdrawals;

• Quantity: 3;

• Specific Projects:

• Hana Network: Hana Network is a hyper-casual financial system with social network effects and has launched a fiat deposit and withdrawal solution, Hana Gateway, aiming to achieve user-driven distribution through existing open social networks.

• P2P.me: A decentralized deposit and withdrawal platform in India, where the off-chain part enhances security through a reputation system and improves privacy through ZK.

• Offramp: Offramp is a decentralized fiat channel protocol that allows anyone in the world to quickly enable/exit cryptocurrency, fully self-custody funds, with no KYC and low fees.

1. Tools:

• Definition: Products that solve real-life problems for users, such as Web3 maps;

• Quantity: 1;

• Specific Projects:

• proto: The Indian version of Google Maps, Proto is a user-generated, token-incentivized mapping platform aimed at transforming the geospatial data industry. Through decentralized data collection, Proto can provide high-quality real-time map data at a fraction of the cost of traditional methods. Proto's unique approach allows it to easily penetrate dense and complex areas, providing businesses with accurate and up-to-date data that meets their needs.

From the development trend of investment preferences, Alliance DAO has been investing in and incubating consumer projects since 2021. From 2021 to the first half of 2023, its main investment and incubation focus has been on games and creator economy projects. Starting from the second half of 2023 until 2024, its preference has shifted to crypto speculation, SocialFi, and finance.

The author has tracked some articles, podcasts, and other content publicly published by Alliance DAO to summarize its investment philosophy regarding the Web3 consumer sector, as follows:

1. First, it believes that the ecological foundational tools have become increasingly complete, and more application layers are needed to bring real value and capabilities to the ecosystem.

2. The founding team should focus on Product-Market Fit (PMF). Typically, during the market validation process, there are two types of risks: product-side risks and market-side risks. Consumer projects face greater market-side risks, so it is necessary to consider avoiding the premature introduction of tokens, which could distort the PMF validation results.

3. The target users of Web3 consumer applications can be divided according to their acceptance of Web3, with non-Web3 ordinary users on the left and Web3 native users on the right. For applications designed for left-side users, Web3 elements mainly reduce customer acquisition costs through "advertising tokens" to capture more market share. For right-side users, the focus should be on assetizing new targets to bring additional investment and speculation demand or to address the unique needs of Web3 native users. Currently, the preference leans more towards the latter.

4. It is clear that the user profiles of the Solana ecosystem and the EVM ecosystem differ, with the former being more conducive to the success of consumer applications for four reasons:

• A more vibrant community: Solana users are highly enthusiastic about participating in new projects, especially those with speculative potential, which may be related to the wealth effect.
• Stronger and more efficient ecological resource support: Core members of the Solana ecosystem embrace the community and possess strong community mobilization capabilities, responding more quickly to support new projects.
• Faster and lower-cost infrastructure: Aiming to create an on-chain Nasdaq, with low transaction costs and high confirmation speeds, and due to the non-distributed nature of foundational components and a greater pursuit of usability, the learning costs for new users are relatively low.
• Higher product competitive barriers: Due to the adoption of non-EVM technology choices, the copy costs of Solana DApps are higher.

What are Web3 Consumer Applications

Consumer applications, referred to as To C applications in the Chinese context, mean that your target users are the majority of ordinary consumers rather than enterprise-level users. Open your App Store, and all the applications inside belong to this category. Web3 consumer applications refer to software applications aimed at consumers that have Web3 characteristics.

Typically, according to the classifications in most App Stores, we can roughly divide the entire consumer application sector into the following 10 categories, each with different subcategories. Of course, as the market matures, many new products will combine multiple features to find their unique selling points to some extent, but we can still categorize them based on their core selling points.

Web3 Consumer Application Paradigms and Their Opportunities and Challenges

Based on the analysis of Alliance DAO's investment philosophy and personal observations, the author believes there are three common paradigms of Web3 consumer applications:

1. Utilizing the technical characteristics of Web3 infrastructure to optimize certain issues present in traditional consumer applications:

This is a relatively common paradigm. We know that a large amount of investment in the Web3 industry revolves around infrastructure construction, and creators of applications adopting this paradigm hope to leverage the technical characteristics of Web3 infrastructure to enhance their product's competitive advantage or provide new services. Typically, we can categorize the benefits brought by these technological innovations into the following two types:

• Extreme privacy protection and data sovereignty:

• Opportunity: The privacy track has always been the main theme of Web3 infrastructure innovation, from the initial asymmetric encryption algorithm identity verification systems to the gradual integration of numerous software and hardware technologies, such as ZK, FHE, and TEE. Many tech giants in Web3 seem to adhere to an extreme view of human nature, aiming to create a network environment that does not rely on third-party trust and provides users with the ability to interact with information or value. The most direct benefit of this technical characteristic is that it brings data sovereignty to users, allowing personal privacy information to be directly hosted on locally trusted software and hardware devices, avoiding privacy information leaks. Many Web3 consumer applications optimized for this technical characteristic exist; any project that claims to be decentralized XX falls into this paradigm, such as decentralized social media platforms, decentralized AI large models, decentralized video websites, etc.

• Challenge: After years of market validation, it can be said that using this as a core selling point has not shown significant advantages in market competition for two reasons. First, consumer users' emphasis on privacy is based on large-scale privacy breaches and infringement events, but in most cases, more comprehensive laws and regulations can effectively alleviate this issue. Therefore, if privacy protection is based on a more complex product experience or higher usage costs, its competitiveness will be significantly insufficient. Second, we know that the current business models of most consumer applications are built on extracting value from big data, such as precision marketing. Overemphasizing privacy protection can undermine mainstream business models because user data will be scattered across a number of data islands, making it difficult to design sustainable business models. If it ultimately relies on so-called "Tokenomics," it will have to introduce unnecessary speculative attributes to the product, which will divert the team's resources and energy to cope with the impact of this attribute on the product, and it will also be detrimental to finding PMF, which will be analyzed in detail below.

• Low-cost, globally available, trustworthy execution environment:

• Opportunity: The emergence of numerous L1 and L2 solutions provides application developers with a new, global, round-the-clock, multi-party trustworthy program execution environment. Typically, traditional software service providers independently maintain their programs, such as running on their server clusters or in the cloud, which naturally incurs trust costs in businesses involving multi-party collaboration, especially when the strengths or scales of the parties are balanced, or when the data involved is particularly sensitive and critical. This trust cost usually translates into significant development costs and user usage costs, such as in cross-border payment scenarios. Utilizing the execution environment brought by Web3 can effectively reduce the related costs of providing such services. Stablecoins are a good example of such applications.

• Challenge: From the perspective of cost reduction and efficiency improvement, this is indeed a competitive advantage, but exploring application scenarios is relatively difficult. As mentioned above, benefits from using this execution environment arise only when a service involves multi-party collaboration, and the relevant parties are independent, balanced in scale, and the data involved is particularly sensitive. This is a relatively stringent condition. Currently, it seems that most of these application scenarios are concentrated in the financial services sector.

1. Utilizing crypto assets to design new marketing strategies, user loyalty programs, or business models:

Similar to the first point, developers of applications adopting this paradigm also hope to gain a competitive advantage for their products by introducing Web3 attributes in a relatively mature, market-validated scenario. However, these developers focus more on introducing crypto assets and leveraging the high financial attributes of crypto assets to design better marketing strategies, user loyalty programs, and business models.

We know that any investment target has two types of value: commodity attributes and financial attributes. The former relates to the use value of the target in a specific real-world scenario, such as the livability of real estate assets, while the latter relates to its trading value in the financial market. This trading value in the crypto asset field usually comes from liquidity and high volatility, creating investment scenarios. Crypto assets are a category of assets where financial attributes far exceed commodity attributes.

In the eyes of most developers of such applications, introducing crypto assets can typically bring three benefits:

• Reducing customer acquisition costs through token-based marketing activities like Airdrops:

• Opportunity: For most consumer applications, how to acquire customers at a low cost in the early stages of a project is a key issue. Tokens, with their high financial attributes and being assets created from scratch, can significantly reduce the risks of early projects. After all, compared to directly spending real money to buy traffic and exposure, using zero-cost created tokens for user acquisition is indeed a more cost-effective choice. From a certain perspective, such tokens are similar to advertising tokens. Many projects adopting this paradigm exist, such as most projects in the TON ecosystem and mini-games.

• Challenge: This customer acquisition method mainly faces two issues. First, the conversion cost of seed users acquired through this method is extremely high. We know that most users attracted by this scheme are cryptocurrency speculators, so their attention to the project itself is not very strong; they are more interested in the potential financial rewards. Moreover, there are currently many professional airdrop hunters or "money-making" studios, which makes it extremely difficult to convert them into actual product users later on. This may also lead to a misjudgment of PMF by the project, resulting in excessive investment in the wrong direction. Second, as this model becomes widely used, the marginal returns of customer acquisition through airdrops diminish, meaning that if one wants to establish sufficient appeal within the cryptocurrency speculator community, costs will gradually increase.

• User loyalty programs based on X to Earn:

• Opportunity: Retention and activation are another concern for consumer applications. Ensuring that users continue to use your product requires significant effort and cost. Similar to marketing, using the financial attributes of tokens to reduce retention and activation costs has also become the choice for most such projects. A representative model is X to Earn, which rewards users based on predefined key behaviors with tokens, establishing a user loyalty program on this basis.

• Challenge: Relying on the motivation of users to earn rewards for activation will shift their focus from the product's functionality to the yield. Therefore, if the potential yield decreases, user attention will quickly dissipate, which is a significant harm to consumer applications, especially for products that rely heavily on user-generated content (UGC). If the yield is based on the price of the tokens issued by the project, it will create pressure for market value management for the project, especially during bear markets, where they will have to bear high maintenance costs.

• Direct monetization using the financial attributes of tokens:

• Opportunity: For traditional consumer applications, there are two common business models. The first is free usage, monetizing the platform's traffic value after large-scale adoption, and the second is paid usage, where users must pay a fee to access certain Pro services within the product. However, the former has a longer cycle, while the latter is more challenging. Therefore, tokens bring a new business model, which is to directly monetize by selling tokens.

• Challenge: It can be clearly stated that this is an unsustainable business model. The reason is that once a project moves past the early high-growth stage, the lack of incremental capital inflow will inevitably place the project's interests in opposition to user interests in this zero-sum game, accelerating user attrition. If the project does not actively cash out, it will have to rely on financing to maintain the team or expand the business due to a lack of robust cash flow revenue, which will lead to a predicament of dependence on market conditions.

1. Fully serving Web3 native users and addressing their unique pain points:

The last paradigm refers to consumer applications that fully serve Web3 native users. They can be roughly divided into two categories based on innovation direction:

• Constructing new narratives and monetizing certain untapped value elements around Web3 native users to create new asset classes:

• Opportunity: By providing new speculative targets for Web3 native users (e.g., in the SocialFi sector), the benefit lies in having pricing power over a certain asset from the initial stage of the project, thus obtaining monopoly profits, which in traditional industries would require intense market competition to build strong competitive barriers.

• Challenge: Frankly speaking, this paradigm relies heavily on team resources, specifically whether they can gain recognition and support from individuals or institutions with strong influence among Web3 native users, or those with "pricing power" in crypto assets. This brings two difficulties: first, as the market develops, the pricing power of crypto assets dynamically shifts among different groups, for example, from the initial Crypto OGs to crypto VCs, then to CEXs, crypto KOLs, and finally to traditional politicians, entrepreneurs, or celebrities. In this process, the ability to identify trends and establish collaborations with new elites during each power transition places significant demands on team resources and market sensitivity. Second, establishing partnerships with "price setters" usually requires substantial costs and sacrifices, as in this market, you are not competing for a larger market share within a specific application sector but are competing with all other crypto asset creators for the preferences of "price setters," which is a highly competitive game.

• Providing new tool-based products to meet the unmet needs of Web3 native users during their market participation, or offering better and more convenient products from the user experience perspective:

• Opportunity: As cryptocurrencies gradually become more popular, the overall user base of this group will expand, creating possibilities for user segmentation. Moreover, by focusing on the genuine needs of a specific user group, such products often achieve PMF more easily, thereby establishing a more robust business model, such as trading-related data analysis platforms, trading bots, information platforms, etc.

• Challenge: Since this approach returns to the true user needs, although the development path of the product is more robust, the construction cycle is longer than that of other paradigmatic projects. Additionally, since such projects are driven by specific needs rather than narratives, the PMF of the product is easier to verify, but in the early stages of the project, it is often difficult to secure large amounts of financing. Therefore, maintaining patience and staying true to the original intention amidst the complex myths of wealth brought by "token issuance" or high-valuation financing is a challenging task.

Thoughts on Investment Theory for Web3 Consumer Applications

Next, we will introduce our thoughts on the investment theory for the Web3 consumer application sector, which can be roughly divided into five core viewpoints:

1. How to transcend the speculative cycle is the primary consideration for Web3 consumer applications

As one of the most successful Web3 consumer applications in the last cycle, the development path of Friend.Tech can provide us with significant insights. According to Dune's data, Friend.Tech has currently accumulated a Protocol Fee of $24,313,188, with a total of 918,888 users (traders). For a Web3 application, these figures are quite impressive.

However, the current development of this project faces considerable challenges, stemming from multiple factors. First, in product design, Friend.Tech introduced a Bonding Curve design, which brought speculative attributes to the social application, attracting a large number of users in the short term through wealth effects. However, in the medium to long term, this approach has also raised the entry barrier for users to join the community, which contradicts the current practice of most Web3 projects or KOLs relying on public domain traffic to build influence. Additionally, Friend.Tech overly tied the token to the product's utility, resulting in an excess of Web3 speculative users, diverting attention from the product's utility and ultimately leading to the current situation.

Therefore, for most Web3 consumer applications, after accumulating a large number of users, it is essential to carefully consider how to find PMF, maintain user engagement, help the project transcend the speculative cycle, and build a sustainable business model. If these issues can be effectively addressed, Web3 consumer applications can achieve true mass adoption.

2. How to evaluate Web3 consumer applications during the investment process?

In general, the investment evaluation of Web3 consumer applications primarily focuses on two aspects. The first aspect is analyzing the product's operational data to assess its market potential, which can be roughly divided into two dimensions:

• User data: For most consumer applications, user data is always the most important, as a sufficient user base is a prerequisite for exploring business models. Therefore, similar to the evaluation of most traditional Web2 consumer applications, we can assess whether PMF has been found based on traditional evaluation metrics such as active user count, user growth rate, and user retention rate. Additionally, for different categories and stages of Web3 consumer applications, the focus may vary. For example, in Web3 social applications, user retention rate becomes more critical. Investors generally start from niche markets; when they find an application with strong retention within a uniquely characterized user base, it indicates investment value. Of course, during the evaluation process, it is also necessary to carefully discern the data to avoid misjudging PMF due to bot users.
• Conversion data: In addition to user data, conversion data is also needed to assess potential commercial value, such as AUM and user spending. If a project has many users but a small AUM or low average spending per user, it indicates limited commercialization value. Of course, not all revenue data is the same; revenue quality can vary significantly. If the revenue structure is based on real income, it indicates that users are paying for the products they provide rather than for mining their tokens, making such a business model more sustainable.

The second aspect is the assessment of the team, focusing on three areas. First is the team's technical strength, which is core to establishing a product moat and forming a competitive advantage. Second, the team needs to have a strong market sense and openness, enabling them to identify market opportunities promptly, recognize unmet user needs, and adjust business direction accordingly. Finally, team resources are also important, such as partnerships with other applications and collaborations with KOLs, which determine the success rate of the issuance process.

3. How to define a successful Web3 consumer application

From an investor's perspective, defining a successful Web3 consumer application is also an interesting question. Is the success of a Web3 consumer application driven by revenue or token price? Generally speaking, these two are interconnected. If a project cannot continuously generate revenue, then in the end, its issued tokens will have little future. However, this evaluation standard mainly depends on your investment horizon. If the overall investment horizon is relatively short, then the judgment of token price becomes more important, focusing on token economics. Conversely, if it is a long-term value investment, then the performance of revenue data and the sustainability of the revenue structure become more critical.

4. The "application factory model" may be a more certain business strategy for Web3 consumer applications

Referring to the development of China's Web2 industry, ByteDance has developed many successful consumer applications. Their business strategy involves continuous trial and error, developing a large number of different types of products, allowing the market to choose a few successful directions, and continuing to invest resources to expand their business. For them, the key to the success of this strategy is that they have accumulated a large user resource base, reducing their trial and error costs. This experience can be applied to the Web3 industry.

From this perspective, projects like Friend.Tech still have opportunities in this cycle, as they have shown short-term attractiveness, attracted a large number of users, and possess good revenue capabilities. These factors will help them become a Web3 application factory, making their subsequent development worth watching.

5. What characteristics will the next successful Web3 consumer application possess?

We believe that in the next cycle, successful Web3 consumer applications will emerge in the following three paradigms. The first paradigm is to attract some crypto KOLs through the product's fun factor, and then leverage the KOLs' influence to bring their fans onto the platform, helping the project achieve a cold start. A representative example of this paradigm is Kaito, whose team, through strong technical capabilities and innovative incentive mechanisms, has captured a significant amount of mindshare in the crypto community, helping them penetrate various communities effectively. At the same time, they have addressed the pain points of how Web3 projects can effectively acquire users during marketing, accumulating a large number of C-end users and establishing precise user profiles for each user through mindshare, assisting Web3 enterprises in conducting targeted marketing through the Kaito platform. This will make their business model more sustainable, freeing them from short-term speculative cycles.

The second paradigm is to directly win the market based on the real needs of Web3 users, relying on product strength. By not introducing tokens too early, they can avoid interference from speculative users during the PMF process, establishing higher user retention rates, as seen with Polymarket, Chomp, and others.

The third paradigm is the innovation of business models. In this regard, Grass has provided us with significant insights by utilizing users' idle computing resources to help them find sources of value capture in fields such as artificial intelligence and monetizing it through tokens. Although Grass's business model leans more towards B2B, this "sharing economy" mindset can also be applied to the design of Web3 consumer applications.

6. Which categories of projects are more likely to become the first Web3 consumer applications to find PMF in the crypto industry?

Currently, based on market trends and investor preferences, the Web3 consumer applications that are most likely to find PMF in the near future may emerge from the following categories:

First, Web3 social applications are still favored by the market. We know that Web3 projects place great importance on and rely on social media for marketing. Compared to traditional investors, cryptocurrency investors also prefer to use social media to obtain information and form value networks. Therefore, the importance of Web3 social applications is self-evident. By assetizing or exploring niche market demands and learning from the lessons of friend.tech, introducing more sustainable business models and stronger user retention rates will help Web3 social applications overcome skepticism about excessive speculation and find PMF.

Second, on-chain trading tool applications also possess considerable potential. With the continuous development of MEME, investor attention towards on-chain trading is increasing. The explosive popularity of on-chain trading tools like OKX Wallet and GMGN proves the strong market demand for this. As mainstream trading tools are widely adopted, the returns from homogeneous trading strategies are expected to decline, leading to an increasing demand for customized solutions from users. If differentiated on-chain trading tools or investment strategies can be provided to this user segment, the market potential for related products is promising.

Payment applications are also one of the categories worth looking forward to in the future. With the recent passage of legislation related to payment stablecoins, the regulatory pressure that payment applications previously faced has been alleviated. Therefore, we have reason to believe that in the near future, Web3 payment applications will leverage the advantages brought by blockchain technology, such as low costs and high settlement efficiency, to build competitive barriers in scenarios like cross-border payments and idle fund management.

Finally, the development of DeFi is also worth noting. As one of the few scenarios that have currently found PMF, DeFi has become an indispensable category in the Web3 industry. The success of Hyperliquid shows that users still have a demand for decentralization. With the continuous improvement of infrastructure, the performance limitations of previous decentralized applications will be overcome. In financial application scenarios that require high execution efficiency, such as high-frequency trading, DeFi will deliver performance comparable to CeFi products, thus we may see more products similar to Hyperliquid challenging the existing CeFi system.

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