Looking back at 14 popular projects from 0 to 1, what did they do right?
Original author: Zixi.eth, crypto KOL
A week has passed. Thanks to the comments from my friends, we have completed the following 14 A summary of what they did when the project went from 0-1. Thanks to @DGZbro and @JimsYoung_ for their help. Some of the content was contributed by these two brothers. We picked Avalanche, Fantom, Solana, Luna, Arbitrum, Merlin, Berachain, Celestia, Eigenlayer, Axie Infinity, Blur, FT, BAYC and Little Penguin. Public chains and products spanning the previous cycle and this cycle.
1. [Excellent Team]:Absolutely The team background of most projects is good. There is no grassroots team. They are either Ph.D.s, university teachers, or serial entrepreneurs. And Western teams account for the vast majority.
2. [Advanced prediction of the market]: In current or future head projects, what they should do first Things are most likely unique, and may not be accepted or understood by everyone.
3. [Reliable Institutional Endorsement]: Obtaining financing from leading institutions is the only way to take off. You may not be able to succeed if you get it, but if you don't get it, there is a high probability that the ceiling is not high.
4. [Ecology is the core competitiveness in the mid- to late-stage]: For lnfra projects, the core spans the cycle Competitiveness refers to whether one or two trump projects can be produced in the public chain. In the early days, the launch of public chains did not rely on ecology, but when the wave recedes, only public chains with real ecology can transcend the cycle. Infra project parties must pay attention to ecological construction. Ace projects are the real competitiveness that enables public chains to transcend cycles. For product project developers, once the product becomes big, they can expand downward and become a public chain.
5. [Innovation]: Whether it is a product or a public chain, it must solve a pain point in the market and solve it yourself The means are unique and definitely not a copycat.
2021 is undeniably the copycat season, especially in the second half of the year. As Ethereum reached 4000+, mainnet gas fees were too high and there was no L2 at the time, so users and funds began to overflow from Ethereum to other L1s. At that time, Solana was the one who pulled the most string. Since it was a bull market, the market was still looking for other targets, so the market’s attention gradually fell on Avax, because:
1) The Avalanche team is great. CEO Emin Gǔn Sirer: Computer scientist and associate professor at Cornell University. Sirer developed the Avalanche consensus protocol underlying the Avalanche blockchain platform and is currently the CEO and co-founder of Ava Labs. He was an associate professor of computer science at Cornell University and former co-director of the Initiative on Cryptocurrencies and Smart Contracts (IC3). He is famous for his contributions to point-to-point systems, operating systems, and computer networks;
2) Unique technical means. It can be said to be the earliest "modular" idea. It uses XCP three chains, X chain is used to create and trade assets, C chain is used to create smart contracts, P chain is used to coordinate validators and subnets, and gossip avalanche is used to confirm the consensus. At that time, it seemed that the brain circuit was very big, and it was a very good idea;
3) Because of the 1+2, the financing ability was very strong. In 2020, it completed 12 million in private financing and 46 million in public financing. In September 21, the foundation raised 230 million U.S. dollars, and in November the ecological accelerator raised 18.5 million. The strong financing ability combined with MM's pull offer allows retail investors to see, understand, and believe in the team's endorsement, so retail investors' buying orders are extremely strong;
4 ) At that time, Avalanche had the ace project Defikingdoms in the ecosystem. This was a very creative DeFi + GameFi project at the time. It used the beautiful graphics of the game (not bad) to express the meaning of DeFi. Later, DFK emerged from the ecosystem. The project became Avalanche's Appchain, and this project made Avalanche famous. Secondly, there are also good projects such as GMX, TraderJoe, etc.
The soul of Fantom is AC. AC is an old DeFi OG and the founder of Yearn Finance, Phantom, etc. YFI has created a thousand-fold myth in the bull market, so the community’s expectations for AC are so high that the community calls him the father of DeFi.
1) There is no need to say anything about the team, AC is the face of Fantom;
2) Fantom raised 40 million through IC0 in 2018;
In the 21-year bull market, it raised 3 rounds of financing in a row, with Alameda investing 35m, Blocktower investing 20m, and Hyperchain investing. 15m. After experiencing a big correction in May;
The reason why Ftm has been soaring is:
1) AC has been calling for orders, and everyone believes in AC;
2) It has raised a lot of money, so Fantom has With confidence, 370 million Tokens (approximately equivalent to US$200 million) were used to stimulate ecological development, and DeFi on the chain developed rapidly;
Why Ftm It started to plummet at 22:
1) Ftm started because AC was CoFounder, and it will also return to zero because AC left. The lack of soul figures has caused the community to lose confidence;
2) The ecology is very ordinary, without any innovation, and it is basically all DeFi , all are copycat. Big projects in the currency circle are all unique. It's just that the ugly ones are unique or the beautiful ones are unique, but neither one is copycat.
Solana’s initial fundraising was not easy. Despite the strong team background, raising funds was not easy in 2018-19. In a market that is increasingly wary of high-performance public chain stories, Solana had to compete with other projects. At that time, Solana was not widely known by the market. However, through persistence in its product and a pragmatic approach, Solana gradually attracted the attention of investors.
During the development of Solana, there was a key disagreement, which involved the strategic choices of the founders of Multicoin and Solana. As an early investor, Multicoir insists that Solana needs to be listed as soon as possible to build brand community consensus. At the same time, Solana’s founders hope to launch a stable and reliable mainnet first. This decision ultimately proved to be correct, as it laid the foundation for subsequent cooperation with SBF, which was looking for a high-performance public chain to work with.
Several key reasons for subsequent changes from 0-1:
1) SBF participated in the Solana’s rise was decisive. SBF not only invested in Solana, but also led his team to develop the Serum project based on Solana, significantly increasing Solana’s visibility and legitimacy. Later it was even reported that 70% of Solana’s TVL was supported by the SBF team.
2) Solana’s hackathon project has created many miracles. Through hackathons and various incentives, Solana cultivates an active developer community that fuels the growth of its ecosystem. Top projects such as Magic Eden, Stepn, and Jito subsequently appeared.
3) Solana, in the hands of SBF, has created miracles through pulling the market, and the wealth effect is the best marketing tool.
4) Despite the subsequent collapse of FTX and significant price fluctuations, Solana still maintains its developer ecosystem and community activities. Through incentives and hackathons, Solana continues to improve its infrastructure and inspire the development of more innovative applications, further promoting the prosperity of the ecosystem and demonstrating its resilience, which is the key to its ability to survive this bear market. And we have seen on Solana that its ecological development is gradually different from that of the Ethereum community, especially the collective migration of DePIN to Solana.
Good endorsement + the wealth effect of pulling the market + the existence of SBF has attracted many developers and ecological projects. And because of its high performance, Solana has attracted many unique ecological projects.
Terra has several key reasons for going from 0-1:
1) In terms of team, Do Kwon graduated from Stanford and has a good team background. Moreover, I am very active on Twitter and am very good at causing trouble.
2) Korean national chain, extremely FOMO in South Korea. Korean VC, 3AC, etc. took off because of Terra, and also returned to zero because of Terra. The financing is also quite good, raising US$77 million in two rounds.
3) In terms of ecology, Luna+UST relies on the arbitrage mechanism and supply and demand to regulate and stabilize prices, while LUNA serves as the stabilizer of UST and has become an important player in the market at that time. The most eye-catching dual-currency algorithm stablecoin system, the two interact to form a positive spiral. Terra also subsequently launched the important DeFi project Anchor, which provides an ultra-high current yield rate of 19%-20%. It was once touted as the "gold standard of Crypto passive income" and attracted a large amount of investment as a highlight. Otherwise, it will pave the way for a thunderstorm later. Everyone is calculating every day how many days Terra’s money can still pay 20% interest. During the bull market, UST became the third largest stablecoin with a market cap of $18 billion, and LUNA peaked at $41 billion. Its ecological payment project Chai is also pretty good. Chai once received a US$45 million investment from SoftBank.
Once the market reverses, the positive spiral will turn into a death spiral:
4) In 2022, the cryptocurrency market will decline as a whole, causing investors to transfer funds from other cryptocurrencies to UST to obtain high interest, making Anchor's deposit scale much higher than its borrowing scale, generating huge balance of payments. In the early morning of May 8, 2022, LFG was withdrawing US$150 million of UST liquidity from the UST-3Crv pool in preparation for the formation of the 4Crv pool. An address suddenly sold 84 million UST, which seriously affected the balance of the 3Crv pool. Multiple whale accounts began to sell UST continuously on Binance, causing UST to briefly unanchor.
As the reserves were gradually depleted, the market's confidence in UST began to waver, and a large number of USTs were sold, causing the UST price to further destabilize. In order to stabilize the price of UST, a large amount of LUNA was issued, causing the price of LUNA to plummet, forming a so-called death spiral. In order to prevent Luna and UST from plummeting, LFG needs to sell BTC and other Tokens from the treasury, causing the market to plummet. Luna and UST brought down the entire market.
Good Tokenomics (actually the bull market Ponzi) + unique ecology create Terra. But Tokenomics also caused the collapse of Terra. If the ecology can keep up, will Terra not collapse?
Arbitrum has several key reasons for going from 0-1:
1) The team offchainlabs started working on L2 in 2018, and completed the angel round in 2019, making it one of the earliest L2 teams. The team's first-mover advantage is extremely obvious. Then in April 2021 and August 2021, two consecutive financing rounds totaling US$140 million were completed. The team’s technical background has obvious first-mover advantage.
2) The earliest and earliest batch of OP L2 mainnet was launched. September 21 was in the bull market. It is relatively easy to accumulate users and ecology, and it is easy to accumulate ecological first-mover advantages.
3) Because we have raised a lot of money, we have money to work on the ecosystem and attract developers.
4) The airdrop was issued very well, creating a large wealth effect in the early bear market of March 2022. Unlike Starkware, which experienced a rapid 90% drop in DAU after issuing an airdrop, Arbitrum did not lose much DAU after issuing an airdrop.
5) There is a trump card project in the ecosystem, GMX. I won’t go into details about how awesome GMX is. During the bear market, it rose 100% against the trend. It was an innovative idea to use spot dex to make perp dex. GMX contributed a large number of users and transactions to Arbitrum in the early days.
Good team background + leader of the story——》Easy to raise funds——》Launch the mainnet at the “right time”——》Because of financing I have made a lot of money, so I can give money to developers——" Until a trump card project can stand up and support the public chain.
Celestia has several key reasons from 0-1:
1) The story of Celestia is well told. As the first project to propose a modular blockchain network, Celestia adopts a modular design, separates consensus and execution, and provides DA services. At its inception, there were few modular blockchain and DA-focused solutions, so Celestia had few direct competitors. This provides Celestia with a unique market position;
2) Celestia was founded at a time when the market was clearly moving towards greater scalability and efficiencyby providing a The solution meets the market demand for higher performance Layer 2 solutions. Celestia is ideally suited as the data availability layer for Rollups. It allows Rollups to push state execution off-chain and rely on Celestia to achieve consensus and data availability, thereby improving overall scalability;
3) The team is good, Mustafa is UCL's Bo Shi and Chainspace's CoFfounder were later acquired by Facebook;
4) Celestia's ecological construction is weak. But after choosing to join the Cosmos Ecosystem,the subsequent airdrop rewards for Staking Tia will be very rich. Therefore Tia has certain value support.
Berachain is getting a lot of attention now (after all, it hasn’t taken off yet), so let’s talk briefly:
1) Although the team is anonymous, it is an old OG that has been in the currency circle for 15 years. In 2021, I issued a Smoking Bear NFT. After experiencing the DeFi Summer, I deeply realized the importance of liquidity to the public chain, so I launched Berachain;
2) It is also because the team background should be good, so it was able to obtain 42m financing from polychain and hackvc during the deep bear period in April 2023;
3) Although the story told by the entire chain still serves DeFi (take the sword of the previous dynasty to kill the officials of this dynasty), the token design is very exquisite. The three-token design bera/honey/bgt has the same effect as that year luna/terra has a left foot stepping on the right foot design. Luna/UST’s interest design is very imaginary and relies on Anchor’s lending interest rate difference. Learning from the failure of Luna/UST, Berachain’s three-token model may be able to effectively mitigate (not avoid) the two-token death spiral. Referring to Luna’s wild surge in the bull market, the market naturally has high expectations for Berachain.
Axie has several key reasons for going from 0-1:
1) At that time, the impact of the epidemic caused the daily income of Southeast Asian users to be very low. The P2E model created by Axie has changed players' expectations for games, transforming it from a recreational activity into a possible source of income. The key point is that the income is not low. Thanks to the background of the bull market, more and more Players join the game, the currency price rises, and the peak weekly income can reach 300-400 US dollars. In areas with unstable economies or affected by the COVID-19 epidemic, this model provides a new income opportunity. Games not only provide entertainment, but also give players control over production tools by allowing them to participate in economic activities, which is particularly attractive to players in developing countries;
2) As the leader of blockchain games at the time, in 2021, with the strong support of various community associations and investment institutions, Axie Infinity’s daily revenue and number of active users reached its peak, and its market share occupied the block Nearly 2/3 of the chain games. During this stage, game revenue and token value reached historical highs. AXS's peak market capitalization was US$10 billion.
Resetting to zero is also very simple. There are no positive externalities in the Ponzi game, and the results are all returned to zero.
The story of Eigenlayer from O to 1 can be understood as:
1) This story is told sufficiently halal, at the beginning of 2022, when the entire ETH staking Ratio was less than 5%, we dared to talk about a subdivided track;
2) Kannan As a PR-type CEO, he can attract the attention of VCs;
3) ETH Staking Ratio is gradually growing visible to the naked eye, from 0 to 30 in 3 years % ETH Staking;
4)Eigenlayer’s star ecological project is EigenDA. The story of Restaking can later be combined with DA to modularize the blockchain. DA becomes one of the best use cases for restaking;
5)Because 1+2+3+4, VC is willing to pay. And this also meets the needs of Ethholders, constantly increasing leverage and improving liquidity.
Merin has basically taken off now. You can briefly talk about the factors:
1) The background of the founder is very nice. Through many offline communications, he can understand his thoughts on entrepreneurship over the past 10 years. He has raised a lot of money in the past and has a very good understanding of himself. High, and with a deep understanding of the community, they will be a very, very good team in the rising market. In addition, the founder also has a very charismatic personality. He dived into the Ordinals ecosystem in March 2023 and was actively optimistic about it very early;
2) Community Solidarity. The BRC420/Merlin community is indeed very united and religious, but it is also true that money is made on the blue box. The factor that unites the community is the consensus created by the Miracle Pull at the Blue Box. The subsequent blue crystals and music boxes have very good wealth effects. Using the wealth effect to complete a rapid cold start and establish a user group;
3) Ecological support. With a certain building in Singapore as the core and several subway stations as the radius, a circle of ecological project parties are gathered. Everyone is supporting each other, so the ecological scale is growing rapidly;
4) The method of selecting TVL is very clever. In addition to BTC Staking, the head inscription + 420NFT can be pledged to TVL, so the TVL book value is very large;
5) Because of 1+2+3, financing is fast . Andthe founder knows MKT and Branding well, so he launched it at the right time, creating the largest BTC L2 on the market currently.
To understand why Blur can grow from 0 to 1, you need to understand that there is only one core competitiveness of NFT Mktplace or Exchange. It is not whether the product is good-looking or easy to use, but how to attract Makers. With Maker, only Taker users can have product experience.
So what did Blur do:
1) Use pending orders (Maker) and Bidding (Maker) to attract different makers and give them Token rewards. And the only ones that can use Tokenincentive are blue-chip NFTs. This is also easy to understand. The vast majority of NFT trading volume is blue chip NFT, and the final destination of non-blue chip NF7 is zero. A large number of blue-chip NFTs are still in the hands of giant whales and MM, and retail investors actually don’t have much in the hands. Therefore, the core is to serve the MM and whales of blue-chip NFT well. Retail investors are not important at all;
2) Token Incentive model and X2Y2 and Looksrare is different. X2Y2 Looksrare's direct vampire drop is a one-off and really doesn't mean much. Continuously using Token Incentive to attract whales and MM to provide liquidity is one of the core factors for Blur’s success;
3) Others are small things, product-related, such as being able to trade in batches, making an aggregator, etc., but this is not the key.
BAYC’s ability to go from 0-1 in the last Cycle can be understood as:
1) People with BAYC NFT automatically become members of an exclusive club. This community provides a new way of socializing and creates a strong sense of belonging;The project’s strong BD has attracted a large number of investors and collectors, including many celebrities, which further increases the exposure and appeal of the project; in the context of the NFT bull market, BAYC has launched a unique business model that decentralizes the IP rights of NFT owners, allowing holders to use their Yuanlai creates and sells goods to further promote BYAC;BAYC, with its unique artistic style and strong community utility, gained the status of a cultural icon in a short period of time in the NFT market at that time;
2) BAYC was launched at the height of the NFT craze, also taking advantage of the high market interest in emerging digital collectibles at the time. Subsequently, through social media and celebrity influence, BAYC quickly established strong brand recognition and community. YugaLabs continues to expand the BAYC universe, including new NFT projects and game launches such as MutantApe Yacht Club and Bored Ape KennelClub, further increasing revenue and continuing to increase membership value and community engagement; and partnering with Adidas to launch the AdidasxBAYC NFT. HoweverSome people believe that BAYC’s model requires constant new additions and capital inflows to maintain its value, which has led some people to call it a monkey universe scam. However, this was also the time when the currency market gradually entered a bear market, and NFT was difficult to crack. One of the dilemmas;
BAYC’s gradual loneliness in this Cycle can be understood as:
1) The question of what exactly NFT is used for is still not solved. And during the bear market, YugaLabs did not provide many airdrop benefits to the community;
The fact that the little penguin can be reincarnated in this Cycle can be understood as:
1) The project has already been reset once in 2022, but because the picture is really cute, Lukaz decided to acquire it;
2) The NFT story at that time was mainly Onboarding Web2 User to Web3, hoping to replicate BAYC. Investors believe that Little Penguin’s off-chain toy retail method + on-chain NFT marketing airdrop method can acquire a certain amount of outside users;
3)Because Lukaz acquired Little Penguin, he has a lot of chips on hand. Unite market makers to easily pull the market and build consensus;
4)Users outside the circle learn about Crypto and Crypto through extracurricular toys Little Penguin, users in the circle re-recognized Little Penguin because of the pull offer/airdrop, so Little Penguin came back to life in the second half of 2023, and once flipBAYC;
Friend .Tech's growth from 0-1 can be simply summarized as:
1) It did something that no one could do before - quantify personasocial value. In the Web2 world, there is no way to launch/use similar products in large quantities due to payment channels and compliance issues (the crime of illegally opening casinos). But in the world of Crypto, the best way to make money is to issue new assets. Therefore, FT solves the above problems very well. Everyone can issue their own key and use E standard + quantitative curve to quantify a person's social value. In the most simple and simple ICO, how many people can buy and sell keys depends entirely on the individual. Branding. The brain circuit of the product is very amazing;
2) Although the product experience is not good, the website is often crushed, and creating an account requires Gas, which is mutually exclusive within the circle, but it cannot be Deny that this is a phenomenal product;
Judging from the interaction volume in the figure below, FT is basically a fog, for the following reasons:
1) The model is not sustainable and is completely cut off from each other within the circle. A considerable proportion of everyone’s gaming money has to be paid to the FT project side, which is too high. STEPN can at least tell the story of positive externalities, but FT can’t even tell the story of positive externalities;
2) No new features were developed in the follow-up, making money The money is over. If the team can add some new gameplay in the future, such as putting it on Web2, advertising, and taking some positive externality measures, there may be a different explosion;
3) The Token mechanism is introduced too late. Without Token incentives, it is difficult to sustain the mutual cut;
If you refer to Blur’s continuous Token Incentive method, Is FT sustainable?
Original link
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