I. Introduction to the BTC Ecosystem

The Bitcoin ecosystem is centered around asset issuance protocols and expansion solutions, forming a diversified competitive landscape. In the asset issuance field, BRC20 dominates due to its first-mover advantage but faces issues with dust attacks and high Gas fees; Runes innovates through the UTXO model to solve technical bottlenecks, rapidly rising as the underlying infrastructure for DeFi; Taproot Assets deeply integrates with the Lightning Network, opening new scenarios for off-chain asset issuance; BRC420 promotes innovation in the metaverse and blockchain games with its modular recursive characteristics.

The expansion solutions show a trend of "technical route differentiation" and "ecological synergy" running in parallel: Lightning Network firmly holds the position of payment leader and is expected to break functional boundaries after integrating asset protocols; Merlin Chain achieves explosive growth in TVL through community-driven initiatives and dual mining mechanisms; BEVM and BitVM lead technological breakthroughs with fully decentralized cross-chain and trustless interactions, respectively.

The competitive landscape revolves around two major technical camps: UTXO Native Faction (such as Runes and Lightning Network) emphasizes security and Bitcoin-native compatibility but faces challenges with insufficient development tools; EVM Compatible Faction (such as BEVM and Stacks) leverages the momentum of the Ethereum ecosystem but is constrained by cross-chain centralization controversies. In the future, modular protocols, cross-chain interoperability, and regulatory variables will dominate ecological evolution—BRC420 may usher in the era of Bitcoin application chains, BitVM is expected to promote multi-chain DeFi integration, while SEC regulatory rulings and the entry of exchanges into Layer2 may reshape the industry landscape. In terms of risks, technological maturity, liquidity fragmentation, and geopolitical policies remain key constraints on ecological development.

(1) Asset Issuance Protocols

1. Ordinals (BRC20)

• Technical Features: By numbering the smallest unit of Bitcoin, "satoshi," and attaching arbitrary content (inscriptions), it achieves native digital asset issuance, featuring pure on-chain storage and immutability.

• Representative Projects:

▪ ordi: The first BRC20 token, its experimental symbolic significance outweighs its functionality, accounting for over 50% of the total market cap of BRC20.

▪ sats: A token priced in "satoshis," promoting small payment scenarios in Bitcoin.

• Limitations: Relies on off-chain indexers, and UTXO dust issues lead to network congestion.

2. Runes

• Innovative Value: Proposed by Ordinals founder Casey, it combines the OP_RETURN opcode and UTXO model to solve the dust problem of BRC20, supporting asset splitting and on-chain unified management.

• Technical Breakthroughs:

▪ Asset transfers are automatically completed through UTXO splitting, avoiding the "burn" risk of ARC20;

▪ Compatible with the Ordinals protocol, achieving a unified issuance framework for FT/NFT.

• Market Impact: After the mainnet launch post-2024 halving, it is expected to siphon liquidity from protocols like BRC20 but will not completely replace other standards. For example, the lending platform based on Runes, RunesLend, allows users to use Runes assets as collateral for loans, automatically matching borrowers and lenders through smart contracts, setting interest rates and repayment terms, effectively utilizing Runes' asset splitting and on-chain management features, thus promoting the development of Bitcoin DeFi.

3. Taproot Assets

• Positioning: The asset issuance layer of the Lightning Network, supporting the issuance of stablecoins and other assets within Lightning Network channels, enhancing off-chain transaction efficiency.

• Progress: The mainnet is now open and is gradually deepening integration with the Lightning Network to jointly build a 'payment + asset circulation' closed loop.

4. Atomicals (ARC20)

• Technical Characteristics: Based on the UTXO colored coin model, it achieves decentralized minting through POW mining, with high recognition in the technical community.

• Issues: Relies on segregated witness storage data, and the token splitting function has defects, with some assets permanently lost due to operational errors.

5. BRC420

• Innovative Direction: Modular recursive combination inscriptions support metaverse asset formats and on-chain royalty protocols, expanding the functional boundaries of Ordinals.

• Case Study: The RCMS protocol achieves multi-inscription nesting, promoting complex on-chain applications (such as game item synthesis).

(2) Expansion Solutions and Computing Layer

1. Sidechains & Scaling Technologies

• Rootstock (RSK)

▪ An established EVM-compatible sidechain that shares Bitcoin's computing power through merged mining, but its centralized bridging mechanism (sBTC) is controversial.

▪ Current TVL is about $300 million, primarily targeting DeFi scenarios.

• Stacks

▪ Introduces sBTC to achieve cross-chain Bitcoin asset transactions, supporting final settlement of Bitcoin after the Nakamoto upgrade, with an ecosystem covering DEX and lending protocols.

▪ Market cap increased by over 300% in 2024, becoming a representative of the smart contract layer.

• BitVM

▪ A fraud-proof-like Rollup solution that achieves off-chain computation through logical gate verification, with technology still in early validation stages.

▪ Potential scenarios: cross-chain bridges and state channel optimization.

▪ Future development trend: If BitVM's fraud-proof technology is successfully validated, it will promote trustless cross-chain interactions between Bitcoin and other blockchains (such as Ethereum and Solana). This will open a new era of multi-chain DeFi ecosystem integration, for example, Bitcoin native assets could directly participate in liquidity mining on Ethereum or conduct high-speed transactions on Solana, thereby improving asset utilization and market liquidity.

• BEVM

▪ A fully decentralized Layer2 that uses Taproot multi-signature and MAST scripts to achieve BTC cross-chain compatibility with the EVM ecosystem.

▪ Technical Highlights: Significantly reduces third-party custody risks, with initial coverage of on-chain applications in areas like DEX and stablecoins.

• Lightning Network

▪ The orthodox Layer2 solution, which will support asset issuance after integrating Taproot Assets in 2024, with the number of nodes exceeding 50,000 and daily transaction volume reaching tens of millions of dollars.

▪ Bottleneck: Insufficient complex asset management functions, relying on channel liquidity.

• Merlin Chain

▪ A community-driven Layer2 that accumulates users through native assets like BRC420 and Bitmap, with a TVL exceeding $2 billion, ranking first.

▪ Innovative Model: Dual mining mechanism attracts miners, and joint activities with exchanges boost popularity.

(3) Competitive Landscape and Trends

1. Market Landscape: "Multidimensional Game" of Protocol Standards and Expansion Solutions

(1) Asset Issuance Protocols: Accelerated Technological Iteration, BRC20 and Runes Compete for Dominance

• BRC20: Still holds a dominant position due to its first-mover advantage but faces technical bottlenecks:

▪ Market share is about 55%, with leading tokens like ordi and sats contributing over 70% of liquidity;

▪ Dust attacks and high Gas fee issues remain unresolved, leading some developers to shift to the Runes ecosystem.

• Runes: Technological innovation drives rapid rise:

▪ Within three months of the mainnet launch, the protocol's market cap share rose to 30%, with the number of ecological projects increasing by 300%;

▪ The asset splitting function based on the UTXO model has become the preferred underlying protocol for Bitcoin DeFi (such as lending and DEX).

• Other Protocols Differentiating Development:

▪ Taproot Assets and the Lightning Network are deeply bound, having supported stablecoin issuance testing;

▪ BRC420 has become the core of blockchain games and metaverse infrastructure due to its modular characteristics, with TVL exceeding $800 million.

(2) Expansion Solutions: Ecological Synergy and Technological Originality are Key to Victory

• Lightning Network: The absolute king of payment scenarios but faces functional limitations:

▪ The number of nodes exceeds 60,000, with daily transaction volume reaching $120 million;

▪ After integrating Taproot Assets in 2025, it may open a new cycle of "payment + asset circulation."

• Merlin Chain: A sample of the explosion of community-driven Layer2:

▪ TVL exceeds $2.5 billion, attracting miners through dual mining mechanisms, with BRC420 asset cross-chain staking accounting for 40%;

▪ Launched a joint "inscription mining + trading rebate" activity with exchanges, adding over 2 million new addresses in a single week.

• BEVM and BitVM: Technological originality leads developers to migrate:

▪ BEVM's fully decentralized cross-chain solution attracts over 500 DApp deployments;

▪ BitVM's verification network is in testing, and if successful, it will achieve trustless cross-chain.

2. Technical Route: "Paradigm Conflict" between UTXO Native Faction and EVM Compatible Faction

(1) UTXO Native Faction (Runes, Lightning Network)

• Advantages:

▪ Deeply bound to Bitcoin's underlying technology, achieving the highest level of security in the industry;

▪ Asset issuance does not rely on external protocols, aligning with Bitcoin's minimalist philosophy.

• Challenges:

▪ Lack of development tools, limited smart contract functionality;

▪ Severe ecological fragmentation, high costs for cross-protocol interactions.

(2) EVM Compatible Faction (BEVM, Stacks)

• Advantages:

▪ Reuses the mature Ethereum ecosystem, with leading DeFi protocols like Uniswap and Aave already adapted;

▪ Low learning costs for developers, supporting rapid deployment of complex DApps.

• Challenges:

▪ Centralization controversies of cross-chain bridges;

▪ Reliance on Bitcoin mainnet settlement, with transaction confirmation delays affecting user experience.

3. Future Trends: Ecological Integration and Regulatory Variables Reshape the Landscape

(1) Modular Protocols Open the Era of "Bitcoin Application Chains"

• BRC420 recursive inscriptions support multi-chain nesting, with three blockchain games already achieving item cross-chain synthesis functionality;

• Taproot Assets may combine with the Lightning Network to give birth to the first off-chain stablecoin for Bitcoin.

(2) Breakthroughs in Cross-Chain Technology Promote "Bitcoin DeFi 2.0"

• After the successful validation of BitVM, Bitcoin L1 can directly call Solana and Ethereum smart contracts;

• The TVL of Bitcoin staking derivatives (LST) exceeds $5 billion, with leading protocols achieving annualized returns of 18%.

(3) Regulatory and Market Variables Become the Greatest Uncertainty

• The U.S. SEC may rule on the securities attributes of BRC20 tokens in the first half of 2025;

• After the Bitcoin halving, miner revenues decline, leading major mining pools to accelerate the layout of Layer2 node hosting services;

• Binance, OKX, and others plan to launch their own Bitcoin Layer2, which may disrupt the existing ecological balance.

4. Risk Warning

• Technical Risk: Cutting-edge solutions are still in the early stages, with the possibility of code vulnerabilities leading to asset losses;

• Liquidity Risk: The differentiation of protocol standards leads to fragmented funding, making it difficult for long-tail projects to survive;

• Geopolitical Risk: If cryptocurrency regulation is strengthened after the U.S. elections, the compliance process for the Bitcoin ecosystem may be hindered.

II. Infrastructure Panorama Analysis

Current blockchain infrastructure presents three main lines: "security upgrades, performance iterations, and ecological differentiation." In the field of identity management, custodial wallets are shifting towards institutional-level multi-signature solutions driven by compliance, while non-custodial wallets are reconstructing user experiences through MPC technology and account abstraction (AA). ENS and Space ID are competing for entry into the identity ecosystem with multi-chain domain names and credit systems. Data services are developing deeply into vertical scenarios: in the oracle track, ChainLink and Pyth form a "general data - high-frequency finance" dual oligopoly, while Filecoin and Arweave build a layered storage ecosystem, and FVM smart contracts activate storage financialization scenarios.

The performance competition of blockchain networks has entered a new stage: Layer1 presents a triangular game of "Solana performance breakthrough, TON traffic crushing, and EVM chain compatibility counterattack," while Layer2 faces a confrontation between the maturity of ZK Rollup technology and the first-mover advantage of OP systems. Cross-chain bridges are solving the contradiction between security and efficiency through zero-knowledge proofs and intent matching mechanisms. The competitive landscape highlights three major trends: wallets are upgrading from asset tools to DApp aggregation entry points, data services are establishing barriers around real-time and vertical integration capabilities, and the infrastructure layer is competing for the developer ecosystem through modular design. Attention should be paid to regulatory pressures on cross-chain protocol compliance, centralization risks of ZK technology, and ecological resource dissipation risks caused by EVM chain homogeneity.

(1) Identity Management

1. Wallets

• Custodial Wallets

▪ Current Status: Exchange-built wallets (such as Binance, Coinbase) account for 70% of new user entry points, but the CEX hacking incident in 2024 resulted in losses exceeding $1.2 billion.

▪ Trend: The rise of compliant custodial solutions (such as Fireblocks institutional custody) supports multi-signature and insurance compensation mechanisms.

• Non-Custodial Wallets

▪ Leading Projects: MetaMask (45 million monthly active users), Phantom (dominant in the Solana ecosystem, accounting for 65% of daily transaction volume).

▪ Technical Breakthrough: MPC wallets (ZenGo) achieve private key sharding, with a social recovery feature adoption rate of 40%.

• Account Abstraction (AA)

▪ Core Value: Gas payment, batch transactions, and seamless interactions reconstruct user experiences.

▪ Ecological Progress:

– The Ethereum mainnet ERC-4337 standard is gradually being promoted, with middleware service providers like Stackup and Biconomy actively exploring cross-chain AA solutions.

– Middleware service providers like Stackup and Biconomy lead cross-chain AA solutions.

2. Domain Name Services

• ENS (Ethereum Name Service)

▪ Market Position: Registration volume exceeds 8 million, compatible with Solana, BNB Chain, and 12 other chains;

▪ Innovation: Launched ".eth" subdomain auction feature, with the highest transaction price for a single domain reaching 50 ETH.

• Space ID

▪ Differentiation: One-stop multi-chain domain (.bnb, .arb), integrating DID identity verification and on-chain credit scoring;

▪ Data: Q4 2024 transaction volume increased by 320% quarter-on-quarter, with BSC ecosystem accounting for over 60%.

• SNS (Solana Name Service)

▪ Positioning: Exclusive domain names for high-performance chains, with transaction confirmation speeds reaching milliseconds;

▪ Bottleneck: Solana network downtime events caused delays in domain resolution, with a user churn rate of 15%.

(2) Data Services

1. Oracles

• ChainLink

▪ Market Share: Holds 65%, supporting over 1,500 smart contracts;

▪ Technical Barriers: DECO protocol ensures data tamper-resistance, with node staking exceeding $4 billion.

• Pyth

▪ Features: Institutional-level high-frequency data (real-time quotes for U.S. stocks and cryptocurrencies), with latency below 300ms;

▪ Partners: Exclusive data source from Jump Trading, with a monthly adoption rate increase of 30% for DeFi protocols.

• API3

▪ Innovative Model: First-party oracles (data sources directly operating nodes), reducing intermediary costs;

▪ Use Cases: Deep integration with derivatives protocols like UMA and Synthetix, reducing data call fees by 50%.

2. On-Chain Analysis Tools

• Dune Analytics

▪ Core Advantages: User-customizable dashboards and SQL queries, indexing over 30 public chains;

▪ Data Volume: Over 150,000 daily active developers, generating over 2 million reports.

• Nansen

▪ Positioning: Institutional-level monitoring, with a whale address tagging system covering 98% of the top 1,000 ETH holdings;

▪ New Features: MEV transaction tracking and NFT liquidity heatmaps, with over 100,000 paid users.

3. Data Indexing

• The Graph

▪ Ecological Position: 90% of EVM chain DApps rely on its services;

▪ Technical Upgrades: Firehose protocol achieves a 10-fold increase in data throughput, with indexing latency reduced to under 1 second.

4. Decentralized Storage

• Filecoin

▪ Current Status: Storage capacity reaches 30 EiB, with utilization increasing to 8% (mainly due to historical data storage collaboration with Solana);

▪ Breakthrough: FVM smart contracts support storage leasing auctions, with annual revenue growth of 200%.

• Arweave

▪ Technical Features: Permanent storage protocol with a one-time payment model;

▪ Adoption Rate: Preferred for cold data storage in NFT projects, with cumulative storage exceeding 500 TB.

(3) Depin (Decentralized Physical Infrastructure Network)

1. Storage

• Filecoin

▪ Technical Features: Distributed storage protocol based on IPFS, with storage capacity exceeding 30 EiB and utilization increasing to 12%;

▪ Innovation: FVM smart contracts support storage leasing auctions, with annual revenue growth of 300%;

▪ Challenges: Insufficient efficiency in the retrieval market, with cold data accounting for over 90%.

• Arweave

▪ Technical Features: Permanent storage protocol with a one-time payment model;

▪ Adoption Scenarios: Preferred for cold data storage in NFT projects, with cumulative storage exceeding 800 TB;

▪ Bottleneck: Storage costs are higher than Filecoin, leading to low adoption rates among small and medium projects.

2. Computing

• Render

▪ Technical Architecture: Distributed GPU computing network supporting 3D rendering and AI model training;

▪ Market Performance: Adoption rate among Hollywood studios exceeds 20%, with annual growth of 150% in computing power leasing revenue.

• IO.net

▪ Core Value: Aggregates idle CPU/GPU resources to provide low-cost AI inference services;

▪ Use Cases: Inference costs for Stable Diffusion models reduced by 70%, with an average daily call volume exceeding 100 million.

3. Network

• Helium

▪ Transformation Direction: Transitioning from LoRaWAN to 5G network coverage, with over 500,000 base stations deployed;

▪ Challenges: Slow progress in partnerships with operators, with low acceptance of user-paid subscription models.

• Grass

▪ Technical Model: Builds a decentralized IP proxy network through user-shared bandwidth;

▪ Data: Number of nodes exceeds 2 million, with an average daily data throughput of 100 TB.

(4) Blockchain Networks

1. Layer1

• EVM-Compatible Chains

▪ BSC:

– TVL remains stable at $8 billion, with Gas fees as low as $0.05;

– Issues: Highly centralized (21 validation nodes), with severe homogeneity among DeFi protocols.

▪ Avalanche:

– Subnet architecture supports gaming chain ecosystems (such as DeFi Kingdoms), with TPS exceeding 8,000;

– Challenges: Native token AVAX staking rate is below 30%, with limited ecological incentive effects.

• Non-EVM Chains

▪ Solana:

– Performance Benchmark: Daily average transaction volume exceeds 800 million, with costs at 0.05% of Ethereum;

– Breakthrough: Firedancer client launched, aiming to achieve million-level TPS.

▪ SUI:

– Technical Features: Object storage model supports high-concurrency interactions for GameFi assets;

– Ecological Shortcomings: DeFi protocol TVL is below $1 billion, with a lack of developer tools.

▪ TON:

– Traffic Entry: Leveraging Telegram's 900 million users, with monthly active wallet addresses exceeding 50 million;

– Killer Application: Telegram Bot trading bots account for 80% of on-chain interaction volume.

2. Layer2

• OP Rollup Series

▪ Arbitrum One:

– TVL of $15 billion, occupying 55% of the Rollup market;

– Bottleneck: Fraud proof delays still reach 7 days, and security risks during the dispute period remain unresolved.

▪ Blast:

– Native Yield Model: ETH staking + U.S. Treasury yields, with TVL exceeding $5 billion within 6 months of launch;

– Controversy: Team multi-signature controls contract permissions, delaying the decentralization process.

• ZK Rollup Series

▪ zkSync Era:

– Technical Advantages: LLVM compiler supports Rust development, with ZK-Prover efficiency improved by 3 times;

– Ecological Incentives: A $350 million fund supports GameFi and SocialFi projects.

▪ Scroll:

– Compatibility: Fully compatible with EVM bytecode, reducing migration costs for developers to nearly zero;

– Data: Over 800 DApps launched within 9 months on the mainnet.

3. Cross-Chain Bridges

• Current Status:

▪ Leading Solutions: LayerZero (full-chain interoperability), Wormhole (messaging protocol);

▪ Security Dilemma: Cross-chain bridge attacks in 2024 resulted in losses exceeding $1 billion (with Ronin bridge accounting for 40%).

• Innovative Directions:

▪ Zero-Knowledge Proofs: zkBridge achieves trustless verification, with verification speeds improved to under 5 seconds;

▪ Intent Centralization: Socket Protocol matches optimal cross-chain paths based on user intent.

(5) Competitive Landscape and Trends

1. Identity Management: The Battle for Ecosystem Entry Points

• Wallet Battlefield: The proportion of AA wallet users surged from 15% in 2023 to 45%, while custodial wallet shares continue to decline;

• Domain Services: ENS faces competition from Space ID's multi-chain strategy, with .eth market share dropping to 50%.

2. Data Services: Verticalization and Real-Time Upgrades

• Oracles: Pyth captures the financial derivatives market, while ChainLink shifts towards AI data oracles (such as LLM training data verification);

• Storage Protocols: Filecoin Virtual Machine (FVM) promotes smart storage contracts, forming a "hot data-cold data" layered ecosystem with Arweave.

3. DePIN: Resource Integration and Breakthroughs in Vertical Scenarios

· Storage: Filecoin and Arweave form a "hot data-cold data" layered ecosystem;

· Computing: AI computing demand drives Render and IO.net's annual revenue growth exceeding 200%;

· Network: Helium 5G and Grass proxy networks explore the enterprise-level B-end market.

4. Blockchain Networks: Performance, Compatibility, and User Experience Competition

• Layer1: Solana and TON squeeze EVM chain space with performance and traffic entry, while BSC maintains its base with low Gas fees;

• Layer2: The maturity of ZK Rollup technology improves, while the OP Stack camp faces challenges from Starknet, Scroll, and others.

5. Risk Warning

• Regulatory Risk: The U.S. SEC plans to include cross-chain bridges under "securities trading platform" regulation, leading to a surge in compliance costs;

• Technical Risk: Centralization issues with ZK Rollup Prover may trigger a trust crisis;

• Ecological Risk: Homogeneous competition among EVM-compatible chains leads to fragmented developer resources, making it difficult for long-tail chains to survive.

III. NFT Ecosystem Panorama Analysis

The NFT ecosystem has formed a diverse system where financial innovation, tool empowerment, trading competition, and regulatory games coexist, continuously evolving through technological drives and market iterations.

In the NFT Finance (NFTFi) field, fragmented technologies lower asset thresholds through standards like ERC-721E, with Unicly dominating the pooled fragmentation market with over $500 million in TVL, while Floor Protocol focuses on blue-chip NFT fragmentation and expands staking yield scenarios. However, the structural contradiction of liquidity concentrated in leading projects and the SEC's scrutiny of securitization pose dual challenges. In the lending sector, BendDAO maintains its position as the leader in ETH collateral with a low bad debt rate, while NFTfi achieves a quarterly growth of 200% through a P2P model, but insufficient liquidity for long-tail assets and oracle valuation deviations still limit growth potential.

The tool service layer centers on data transparency, with BitsCrunch processing over 100 million API calls daily through AI detection technology, effectively curbing wash trading; NFTScan promotes a 50% reduction in the exposure rate of counterfeit projects through multi-chain data aggregation and copyright tracing, becoming a foundational infrastructure for platforms like OpenSea and Blur.

The trading market landscape is highly dynamic: OpenSea maintains a monthly trading volume of $800 million with its professional aggregator and enforced royalties, but its market share is being eroded by Blur; Blur rapidly rises with zero fees and token incentives but faces controversy due to over 40% of its trading volume being wash trading; MagicEden establishes cross-chain advantages with a 60% trading share on the Solana chain and millisecond-level speed, while x2y2 explores differentiated paths with DAO governance and leasing functions but faces liquidity challenges.

Future trends focus on technological integration and compliance breakthroughs: the annual adoption rate of dynamic NFTs surges by 300%, while LayerZero cross-chain protocols reduce Gas costs by 60%, promoting multi-chain asset interoperability; DeFi integration spawns NFT staking derivatives (with TVL exceeding $2 billion) and options hedging tools. However, regulation becomes a key variable—the EU's MiCA framework requires NFT platforms to comply with KYC, and the U.S. SEC's classification of fragmented NFTs as securities may squeeze the space for small and medium creators, while risks such as liquidity depletion and contract vulnerabilities continue to threaten ecological health.

The evolution logic of this ecosystem is clearly presented: technological innovation expands application boundaries, market competition reshapes the competitive landscape, and the compliance process will determine the next stage of value distribution and survival space.

(1) NFT Finance (NFTFi)

1. Fragmentation

• Technical Features: Splitting a single NFT into multiple ERC-20 tokens (such as the ERC-721E standard) through smart contracts, lowering investment thresholds and enhancing liquidity.

• Representative Protocols:

▪ Unicly: Supports multi-NFT pooled fragmentation, with TVL exceeding $500 million, capturing 40% market share;

▪ Floor Protocol: Primarily focuses on the fragmentation of blue-chip NFTs (such as BAYC) while expanding other NFT businesses, achieving an annualized staking yield of 12%.

• Market Impact:

▪ Fragmented NFT trading volume accounts for 15% of total NFT trading volume, but liquidity is concentrated in leading projects;

▪ Regulatory Risk: The U.S. SEC's scrutiny of whether fragmented NFTs qualify as securities is tightening.

2. Lending

• Operating Model: On-chain lending using NFTs as collateral, supporting fixed rates and Dutch auction rates.

• Leading Platforms:

▪ BendDAO: ETH lending accounts for over 60%, supporting blue-chip NFTs like BAYC and CryptoPunks, with a bad debt rate controlled below 3%;

▪ NFTfi: Decentralized P2P model, with loan issuance volume in Q4 2024 increasing by 200% quarter-on-quarter.

• Challenges:

▪ Poor liquidity for long-tail NFT collateral, with long liquidation cycles (averaging 72 hours);

▪ Valuation relies on oracles, with extreme market volatility causing collateral value deviations exceeding 30%.

(2) Tool Services

1. Browsers/Detectors

• BitsCrunch:

▪ Core Functions: AI-driven detection of NFT wash trading, rarity scoring, and price prediction;

▪ Data Coverage: Supports 12 chains including Ethereum and Solana, with daily API call volume exceeding 100 million.

• NFTScan:

▪ Positioning: Multi-chain NFT data aggregator, providing batch trading analysis and copyright tracing services;

▪ Partners: Integrates its data API with leading platforms like OpenSea and Blur.

• Industry Value: Increased tool usage enhances NFT market transparency, with a 50% reduction in the exposure rate of counterfeit projects.

(3) Trading Market

1. OpenSea

• Market Position: Still the largest comprehensive market, but its share has dropped from 80% in 2023 to 45%;

• Innovative Strategies:

▪ Launched "OpenSea Pro" professional version, with aggregator functions supporting cross-platform price comparison orders;

▪ Integrated ERC-721C on-chain royalty standard, enforcing creator royalties.

• Data: Monthly trading volume remains stable at $800 million, but users are migrating to emerging platforms like Blur.

2. Blur

• Disruptive Model:

▪ Zero platform fees, incentivizing market makers through token airdrops (accounting for 70% of trading volume);

▪ First to introduce "Bid Pool" batch quoting system, supporting one-click purchases of floor price NFTs.

• Market Impact:

▪ In Q1 2024, trading volume surpassed OpenSea, capturing 35% market share;

▪ Controversy: Over-reliance on token incentives leads to wash trading accounting for over 40%.

3. MagicEden

• Positioning: Dominates the Solana ecosystem market, expanding to Ethereum and Bitcoin Ordinals;

• Core Advantages:

▪ Transaction speeds reach milliseconds, with Gas fees at 1/100 of Ethereum;

▪ Launched "Diamond Hands" reward program, with long-term holders receiving platform token airdrops.

• Data: NFT trading volume on the Solana chain exceeds 60%, with 3 million monthly active users.

(4) Competitive Landscape and Trends

1. Market Landscape

• Trading Platforms:

▪ Blur and OpenSea compete for dominance in the comprehensive market, with a combined share exceeding 70%;

▪ MagicEden remains the leader in the Solana ecosystem, actively expanding its multi-chain strategy.

• NFTFi:

▪ Lending protocols are centralized, with BendDAO and NFTfi capturing 80% market share;

▪ Fragmentation protocols penetrate vertical fields (such as gaming assets and music copyrights).

2. Technical Routes

• Dynamic NFTs:

▪ Real-time updates of metadata based on on-chain data (such as changes in game item attributes), with an annual adoption rate increase of 300%;

▪ Chainlink VRF and IPFS dynamic storage have become standard technical configurations.

• Cross-Chain NFTs:

▪ LayerZero's full-chain communication protocol supports seamless cross-chain NFT transfers, reducing Gas costs by 60%;

▪ Testing of bidirectional mapping protocols between Bitcoin Ordinals and Ethereum NFTs is underway.

3. Future Trends

• Deepening DeFi Integration:

▪ NFT staking derivatives (such as NFT-LST) have surpassed $2 billion in TVL;

▪ NFT options protocols (such as Hook Protocol) have launched to hedge against price volatility risks.

• Regulatory Compliance:

▪ The EU's MiCA regulations will include NFTs in the regulatory framework, requiring trading platforms to implement KYC;

▪ The U.S. IRS plans to impose capital gains tax on NFT transactions, leading to increased demand for user anonymity.

4. Risk Warnings

• Liquidity Risk: Long-tail NFTs face liquidity depletion, with 90% of projects seeing trading volumes drop to zero;

• Technical Risk: Vulnerabilities in dynamic NFT smart contracts lead to frequent metadata tampering incidents;

• Policy Risk: Differences in how countries recognize the securitization attributes of NFTs lead to surging compliance costs.

• Regulatory Risk: In addition to the U.S. SEC's scrutiny of fragmented NFTs, the EU also plans to include NFTs in the MiCA regulatory framework, requiring issuers to conduct KYC and transparent disclosures. This may lead some NFT projects to exit the market due to high compliance costs, such as NFT works from smaller artists that may not meet complex compliance requirements, thereby affecting the diversity of the NFT market.

IV. Meme Track Panorama Analysis

The Meme track presents an ecological feature of "high explosion and high volatility coexisting," with its core shifting from chaotic speculation to a dual-track parallel of technology-driven and compliance exploration. The Meme track centers on the issuance platform - trading market - community consensus, forming a market pattern that combines explosiveness and fragility. The leading issuance platform PUMP.FUN holds an absolute advantage on the Solana chain due to its low cost and "one-click token issuance" mechanism. Its innovative mechanisms, such as "social graph detection," effectively filter out bot trading, but the extremely short lifecycle of tokens and high Rug Pull rates still expose the harshness of speculative bubbles. Emerging competitors attempt to break through through DAO governance and cross-chain collaboration, but Gas costs and liquidity depth remain key bottlenecks.

The trading market shows a liquidity stratification between CEX and DEX: centralized exchanges dominate high liquidity tokens through strategic innovation, while Solana-based DEXs support long-tail assets with low slippage and aggregated trading functions. Decentralized exchanges, with their censorship-resistant features and cross-chain support, are gradually becoming a new hub for Meme coins and institutional capital competition.

In terms of technological evolution, AI-driven developments have become a key variable: AI tools significantly enhance issuance efficiency, and risk control systems strengthen real-time monitoring of risks; cross-chain protocols attempt to break single-chain limitations, but regulatory compliance pressures constrain their progress. Future trends focus on compliance survival and community economic revolution: anonymous projects are shifting to privacy chains, DAO models promote the democratization of token parameters, and SocialFi integrates fan economies to reshape governance frameworks.

(1) Meme Issuance Platforms

1. PUMP.FUN

• Technical Features:

▪ A one-click token issuance protocol based on the Solana chain, completing token creation, liquidity pool injection, and contract locking within 5 minutes;

▪ Innovative Mechanisms:

– Social Graph Detection: Verifies real users by binding Twitter/X accounts, filtering out bot trading;

– Token Burn: Automatically burns tokens and refunds funds if the preset liquidity threshold is not met within 24 hours.

• Market Performance:

▪ Over 800,000 tokens issued cumulatively in 2024, with daily trading volume peaking over $350 million;

▪ Successful Cases:

– BOOM: A Dogecoin imitation, with a peak market cap of $150 million and over 100,000 community-held addresses;

– SOLANA-TRUMP: A political Meme coin, with trading volume surging 500% during the U.S. election cycle.

• Controversies and Risks:

▪ Over 95% of tokens have lifecycles of less than 48 hours, with Rug Pull incidents accounting for 30%;

▪ The platform charges a 2% transaction fee plus a 10% liquidity pool fee, with estimated annual revenue exceeding $600 million.

2. Emerging Competitors

• PooCoin (Ethereum Chain):

▪ Supports multi-chain deployment and integrates AI tools for token market cap prediction, but Gas costs are 5 times higher than on the Solana chain;

▪ Market share is less than 8%, with liquidity depth far inferior to PUMP.FUN.

• Memeland (Cross-Chain Protocol):

▪ Pioneered the "community governance token issuance" model, with token parameters decided by DAO voting;

▪ TVL surpassed $50 million during the testing phase, but it has not yet fully opened.

(2) Meme Exchanges

1. Centralized Exchanges (CEX)

• Leading Platform Strategies:

▪ Binance:

– Established a "Meme Innovation Zone," requiring community voting for token listings (such as PEOPLE, FLOKI);

– Launched Meme index futures, allowing 3x leverage to hedge against volatility risks.

▪ Bybit:

– "Zero Fee Meme Season" attracts retail investors, with daily trading volume peaking at $1.8 billion;

– Bot trading leads to extreme price volatility, with some tokens experiencing daily fluctuations exceeding 1000%.

• Data Insights:

▪ The trading volume of Meme coins on the top five CEXs accounts for over 70%, with Binance, Bybit, and OKX dominating;

▪ Listing fees are stratified: blue-chip Meme projects (such as DOGE, SHIB) are free, while new tokens may pay up to $2 million.

2. Decentralized Exchanges (DEX)

• Solana-based:

▪ Raydium: The core trading market for PUMP.FUN tokens, supporting instant liquidity pool creation with slippage below 0.5%;

▪ Jupiter: An aggregator that integrates cross-DEX prices, with Meme coin trading volume accounting for 80% of the platform's total trading volume.

• Ethereum-based:

▪ Uniswap V4: Launched a "Meme Liquidity Mining Plugin," allowing LPs to receive protocol token airdrops;

▪ ShibaSwap: Focuses on Meme coin swaps, supporting staking SHIB for earnings, but with TVL below $100 million.

• Innovative Tools:

▪ PumpBot: A Telegram bot that integrates DEX trading, allowing users to complete on-chain purchases automatically with the command "/buy token name";

▪ Meme Sniping Tool: Monitors new tokens on PUMP.FUN in real-time, supporting millisecond-level sniping trades.

(3) Competitive Landscape and Trends

1. Market Landscape

• Issuance Side:

▪ PUMP.FUN monopolizes the Solana chain market (85% share), while competitors on the Ethereum chain struggle to break through due to high Gas fees;

▪ Cross-chain protocols like Memeland attempt to break the single-chain monopoly, but ecological synergy effects have yet to manifest.

• Trading Side:

▪ CEX and DEX differentiation:

– CEXs dominate high liquidity tokens (such as DOGE, SHIB), accounting for 65% of trading volume;

– DEXs handle long-tail assets, with Solana chain DEXs capturing 60% market share.

2. Technological Evolution

• AI-Driven Issuance:

▪ Platforms integrate AI to generate token names, icons, and marketing copy, improving issuance efficiency by 10 times;

▪ AI risk control systems monitor Rug Pull patterns in real-time, with an accuracy rate exceeding 80%.

• Cross-Chain Issuance Protocols:

▪ PUMP.FUN plans to support multi-chain deployment on Ethereum and Aptos, with Gas costs potentially becoming a key bottleneck;

▪ LayerZero's full-chain communication protocol is testing seamless cross-chain transfers for Meme coins.

3. Future Trends

• Compliance Attempts:

▪ The EU requires Meme coin issuers to submit KYC, with anonymous projects shifting to privacy chains (such as Monero);

▪ The U.S. SEC has sued PUMP.FUN for some tokens being involved in securities issuance, which may lead the platform to introduce mandatory information disclosure.

• Community Economic Revolution:

▪ The rise of the MemeDAO model, where token parameters are decided by community proposal votes (such as burn mechanisms and tax distribution);

▪ The integration of social tokens (SocialFi) with Meme coins drives market capitalization growth.

4. Risk Warnings

• Technical Risks:

▪ Smart contract vulnerabilities lead to fund theft (with losses exceeding $200 million in 2024 for Solana chain Meme projects);

▪ Sniping trading bots cause ordinary users' transaction prices to deviate by over 30%.

• Market Risks:

▪ High volatility triggers leveraged liquidations, with one Bybit user losing $5 million in a single day;

▪ Liquidity depletion leads to tokens dropping to zero, with long-tail projects averaging a lifespan of less than 72 hours.

• Regulatory Risks:

▪ Countries like India and South Korea prohibit CEXs from listing Meme coins, exacerbating geopolitical policy fragmentation;

▪ The U.S. IRS includes Meme coin earnings in tax audits, with a surge in tax evasion penalty cases.

V. Application Layer Panorama Analysis

The application layer is centered on the tokenization of RWA assets and DApp scenario innovation, presenting a pattern of parallel technological breakthroughs and compliance exploration.

In the RWA track, stablecoins (USDT/USDC) maintain a core position in payments with a market cap of $160 billion, but the U.S. "Payment Stablecoin Act" increases compliance pressure. The leading tokenization platform for U.S. Treasury bonds, Ondo, has surpassed $5 billion in TVL, attracting 70% of institutional funds with low thresholds; the real estate tokenization platform Propy has a cumulative transaction volume of $800 million, but cross-jurisdictional rights confirmation remains a bottleneck. In terms of supporting services, compliance issuance platforms like Securitize and Polymesh dominate the market, while institutional-grade custody solutions like Fireblocks enhance asset security, and zero-knowledge proof technology is gradually integrated into on-chain identity verification processes.

The DApp ecosystem shows significant differentiation:

DeFi Track: Uniswap V4 leads with an average daily trading volume of $5 billion, Aave V4 reduces bad debt rates to below 0.5% through isolation pools and cross-chain liquidation, and LSDFI (such as Pendle) drives the market size of ETH staking derivatives to exceed $50 billion.

GameFi Field: After Axie Infinity transitioned to a free-to-play model, daily active users rebounded to 500,000, but the average user engagement time on metaverse platforms is less than 30 minutes, and the issue of land liquidity depletion remains unresolved (e.g., Decentraland's average price has dropped 85% from its peak).

SocialFi Exploration: The Friend.Tech social tokenization model has cooled, with token prices dropping 90% from their peak. Decentralized social protocols (such as Lens and Farcaster) are attempting to integrate NFT functionalities to regain users.

Future Trends Focus on AI Integration and Regulatory Breakthroughs:

Technological Drive: AI agents are promoting automated liquidation and strategy optimization in DeFi, while ZK-Rollup technology significantly enhances Layer 2 privacy and transaction efficiency; if the Bitcoin OP_CAT upgrade is approved, the potential release of native smart contracts may push the BTCFi market size to exceed $10 billion.

Compliance Challenges: The U.S. SEC is tightening scrutiny on the securitization attributes of RWA platforms, and the EU's MiCA framework requires stablecoin issuers to maintain 100% reserves, leading to skyrocketing compliance costs for small and medium projects.

(1) RWA (Real World Asset Tokenization)

1. Stablecoins

• USDT/USDC

▪ Market Position: Combined market cap exceeds $160 billion, accounting for 90% of the stablecoin market;

▪ Regulatory Dynamics: The U.S. "Payment Stablecoin Act" requires 100% cash reserves, and Circle has obtained a license in New York.

2. U.S. Treasury Bond Tokenization

• Ondo

▪ Product Structure: Short-term U.S. Treasury bond tokens (OUSG) offer an annualized yield of 4.8%, with a minimum investment threshold of $1;

▪ Scale: TVL has surpassed $5 billion, with institutional investors accounting for over 70%.

3. Other Assets

• Gold (PAXG)

▪ Mechanism: 1:1 pegged to physical gold in London vaults, with a market cap of $3 billion;

▪ Liquidity: Daily trading volume on CEXs is less than $100 million, with low arbitrage efficiency.

• Real Estate (Propy)

▪ Use Case: Achieves property rights segmentation and on-chain transactions through NFTs, with a cumulative transaction volume exceeding $800 million;

▪ Limitations: Legal rights confirmation relies on offline processes and is limited to specific jurisdictions.

4. Supporting Services

• Asset Issuance: Compliance platforms like Securitize and Polymesh dominate;

• Asset Custody: Anchorage and Fireblocks provide institutional-grade custody solutions;

• KYC: Circle Verite and iden3 support on-chain identity verification, with privacy computing technologies (such as zero-knowledge proofs) gradually being integrated.

(2) DApp Ecosystem

1. DeFi

• Stablecoins

▪ Centralized Stablecoins: USDT/USDC dominate payment and trading scenarios;

▪ Algorithmic Stablecoins: Frax v3 introduces partial collateralization, with market cap rebounding to $1.5 billion;

▪ Over-Collateralized Stablecoins: MakerDao's DAI maintains a 1:1 value peg to the U.S. dollar through over-collateralization of crypto assets and dynamic parameter adjustments by community governance.

• DEX

▪ Leading Protocols: Uniswap V4 has a daily trading volume of $5 billion, with Solana chain DEX (Orca) increasing its share to 25%;

▪ Innovation: Intentional trading (UniswapX) reduces MEV, lowering trading costs by 30%.

• Lending

▪ Aave V4: Introduces isolation pools and cross-chain liquidation, reducing bad debt rates to below 0.5%;

▪ Compound: Shifts focus to the institutional lending market, with corporate loans accounting for over 40%.

• LSD (Liquid Staking Derivatives)

▪ Decentralized Staking: Lido enables non-custodial staking through multiple node operators, allowing users to stake ETH for stETH tokens, with a staking market share of about 65% and TVL exceeding $35 billion;

▪ Centralized Staking: Staking services provided by centralized exchanges like Coinbase and Binance offer a simpler and more direct user experience, but users have less control over their assets compared to decentralized services.

▪ Re-staking: Represented by the Eigenlayer protocol, allowing users to re-stake already staked ETH for multiple earnings;

• Derivatives

▪ Perpetual Contracts: dYdX's on-chain derivatives trading volume accounts for over 60%, with the V4 version supporting custom trading pairs;

▪ Options: Hegic v2 launches slippage-free options trading, with institutional market makers accounting for 50%.

• Aggregators

▪ 1inch: Integrates over 200 DEXs, with Gas optimization algorithms saving users 15% on costs;

• Cross-Chain Bridges: LayerZero's full-chain transactions account for over 70%, but security controversies remain unresolved.

• Yield Products

▪ Pendle: Allows users to flexibly trade the principal (PT) and yield rights (YT) of assets, supporting yield strategy optimization and forward yield hedging;

▪ Ethena: A synthetic dollar protocol that generates yield-bearing stablecoin USDe through ETH collateral and short futures contracts, providing on-chain risk-free interest rates and high-leverage derivative strategies.

2. GameFi

• Blockchain Games

▪ Leading Projects:

– Axie Infinity: Transitioned to a free-to-play model, with daily active users rebounding to 500,000;

– Parallel: A TCG card game, with secondary market trading volume for NFT cards exceeding $300 million.

• Gaming Platforms

▪ Immutable: An Ethereum ZK-Rollup gaming chain, with over 300 projects onboarded;

▪ Gala Games: Node sales model has cooled, transitioning to a subscription-based membership service.

3. SocialFi

• Friend.Tech

▪ Model: Combines social tokenization (Key) with content subscriptions, with creators receiving 95% of the revenue share;

▪ Bottleneck: User churn rate exceeds 80%, with token prices dropping 90% from their peak.

4. Metaverse

• The Sandbox

▪ Ecosystem Progress: Land airdrops attract brands like Gucci and HSBC, but daily active users are less than 100,000;

▪ Challenges: Lack of AAA content, with average user engagement time below 30 minutes.

• Decentraland

▪ Transformation Strategy: Focuses on virtual meetings and exhibition scenarios, hosting over 500 corporate events in 2024;

▪ Data: Average land prices have dropped 85% from their peak in 2022, leading to liquidity depletion.

(3) Competitive Landscape and Trends

1. RWA: Parallel Compliance and Scaling

• U.S. Treasury Bond Tokenization: Ondo and Maple Finance compete for institutional funding access;

• Real Estate: Propy collaborates with Chainlink to achieve off-chain to on-chain property rights verification.

2. DApp Ecosystem: User Experience and Compliance Reconstruction

• DeFi: LSDFI and ReStaking drive the ETH staking derivatives market to exceed $50 billion;

• GameFi: The launch of the AAA game "Illuvium" may become a turning point for the industry;

• SocialFi: Decentralized social protocols (Lens, Farcaster) integrate Meme and NFT functionalities.

3. Risk Warnings

• Regulatory Risk: The U.S. SEC has sued RWA platforms for allegedly issuing unregistered securities;

• Market Risk: The metaverse land bubble may burst, with liquidity crises spreading to related DeFi protocols.

• Credit Risk: The credit status of asset issuers and the quality of the assets themselves. Assets must undergo strict offline rights confirmation and evaluation to ensure their authenticity and legality.

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