Industry Insights
Macro Environment: The Federal Reserve’s rate cuts have positively impacted the macro environment, benefiting major decentralized finance (DeFi) protocols. In September, the Fed implemented a significant 50-basis-point rate cut, lowering the federal funds rate to a range between 4.75% and 5%. Although this caused short-term fluctuations, Bitcoin's long-term outlook remains strong. With the global financial system increasingly dependent on monetary expansion, BTC, as a global asset independent of central bank policy, has grown in appeal, with net inflows into spot ETFs totaling $21.3 billion.
Ethereum’s mainnet data remains stable, with the upcoming Pectra upgrade expected to enhance network functionality, security, and efficiency. Average daily active users onchain are around 480,000, with 1.2 million daily transactions. The combined utilization rate of USDC, USDT, and DAI on major lending platforms has soared to 87%, the highest since late June 2024. As DeFi yields rise, rate cuts are likely to revitalize the crypto credit market and boost onchain activity.
Public Chain Ecosystem: Leading chains, notably Sui, have demonstrated impressive data performance, with more innovations expected. Total value locked (TVL) has exceeded $1.4 billion, DEX daily trading volume is at $180 million, and both daily transaction volumes and active addresses have reached record highs. Liquidity protocols, led by NAVI Protocol, have a TVL exceeding $500 million, and major DEX Cetus ranks in the top 10 by trading volume, with a single-week volume exceeding $1 billion. SUI ecosystem mainstream asset trading volumes are steadily rising, with memecoins and community assets also seeing substantial growth. We’re also optimistic about parallel blockchain projects like Monad and its ecosystem project aPriori.
The concept of a “meme supercycle” has drawn more attention, adding new variables to AI development as entertainment-oriented IP attracts wider interest. Currently, the total market cap of AI memecoins exceeds $2 billion, with average memecoin trading volumes more than five times higher than last year. The popularity of Terminals of Truth and GOAT has led to new use cases for AI-generated content, meme culture, and speculative market behaviors, driving Solana’s daily onchain transactions beyond 4.5 million and a peak of 6.9 million daily active users. DEXs associated with memes have also set new fee records.
Overview of OKX Ventures Q3 Investments
In Q3, OKX Ventures focused on investment tracks covering the Bitcoin ecosystem, Ethereum Layer-1 (L1) networks, as well as AI, and blockchain data platforms. Investment projects included zkLink, Monad, aPriori, Space and Time, and Prodia. Here’s an overview of these projects:
zkLink
zkLink is a multi-chain DeFi infrastructure based on Zero-Knowledge Proof (ZKP) technology, addressing issues of liquidity fragmentation and high cross-chain transaction costs in the blockchain ecosystem. It establishes an aggregated Layer-3 zkEVM network, zkLink Nova, facilitating seamless connectivity and liquidity aggregation between Ethereum and its Layer-2 (L2) networks.
Key Challenges Addressed
Cross-Chain Liquidity Aggregation: zkLink connects various L1 and L2 networks through its protocol, simplifying cross-chain transactions and allowing users to trade across blockchains without network or wallet switching.
Diverse Ecosystem Projects: zkLink has partnered with multiple projects, creating a rich ecosystem and attracting extensive user participation in DeFi activities.
Advancing Tech Tools: By combining ZK-Rollup and oracle networks, zkLink provides a secure, efficient cross-chain interaction mechanism, significantly enhancing ecosystem integration.
Improved User Experience: zkLink aims to become a vital bridge connecting diverse blockchains, promoting the development of decentralized finance ecosystems.
Monad
Monad is a Layer-1 blockchain aimed at offering high performance and scalability, supporting up to 10,000 transactions per second (TPS), with one-second block time and single confirmation finality. Monad is fully compatible with the Ethereum Virtual Machine (EVM), making it easier for developers to migrate and utilize existing applications and libraries.
Project Highlights
High Performance: Monad delivers 10,000 TPS for a smooth user experience.
Low Fees: Near-zero transaction fees enable significant application scalability.
Fast Confirmation: With one-second block time and single confirmation, Monad boosts transaction efficiency.
EVM Compatibility: Fully compatible with the existing Ethereum ecosystem applications.
Scalable Decentralization: Low hardware requirements allow broader network participation, promoting decentralization.
Innovative Execution Model: Monad’s optimistic parallel execution and asynchronous processing significantly enhance transaction handling capacity.
aPriori
aPriori is an MEV infrastructure and liquidity staking protocol built for the parallel execution era, natively implemented on Monad. The project optimizes blockchain transaction processing efficiency through an innovative block space auction mechanism, reducing MEV-related spam transactions and aligning block producers with network objectives.
Key Challenges Addressed
Block Space Auction: aPriori’s auction mechanism, through competitive bidding, guarantees fair resource allocation, minimizing spam and enhancing transaction ordering and predictability.
MEV-Reduced Spam Transactions: aPriori’s model significantly reduces MEV-induced spam transactions, improving user experience.
Incentive Compatibility: Ensures transaction fees are based on economic value, optimizing user experience.
Transparency and Fairness: Competitive bidding within the transaction processing provides transparency, reducing unfair practices like front-running.
Space and Time
Space and Time is a decentralized data warehouse tailored for blockchain applications, launched in 2022 to serve the needs of decentralized applications, DeFi, and other projects requiring strong analytical capabilities. It combines enterprise-grade SQL and APIs, allowing seamless integration and analysis of both onchain and offchain data in a single query.
Project Highlights
Decentralized Architecture: As a Web3-native data warehouse, Space and Time ensures data security and user privacy.
Enterprise-Grade SQL and APIs: Users can query and load data using familiar SQL commands, simplifying data handling.
Multi-Chain Support: Enables flexible, scalable access and data analysis across multiple blockchains.
SQL Proof Technology: Ensures data security, integrity, and transparency.
Real-Time Data Processing: Supports high-capacity real-time transaction processing with GPU-accelerated large dataset analysis.
Customizable Dashboards: Offers dynamic visualization capabilities with customizable dashboards for brand-specific visualizations and automatic chart generation.
Prodia
Prodia is an innovative platform focusing on AI and distributed cloud computing, providing image and music generation services through powerful APIs. Leveraging advanced machine learning models, particularly Stable Diffusion, Prodia transforms text into high-quality images. Additionally, Prodia has established a distributed GPU network to deliver cost-effective cloud computing, supporting diverse applications.
Project Highlights
AI Content Generation: Prodia’s APIs enable efficient text-to-image generation, meeting demand for high-quality content.
Distributed Cloud Computing: Prodia’s distributed GPU network offers affordable, powerful computing capacity for various projects.
Versatile Application Scenarios: Prodia supports image and music generation, offering creators flexibility and choice.
User-Friendly API: Prodia’s simple, intuitive API design allows developers to integrate its features easily.
Web3 Infrastructure: Using Web3 technology, Prodia provides decentralized services, enhancing data security and user privacy.
Conclusion
Reflecting on Q3's developments, OKX Ventures is optimistic about the market outlook. Rate cuts provide a macroeconomic boost, while Ethereum’s ongoing innovation, record onchain data, public chain ecosystems like SUI, and cultural innovations driven by memes all contribute to industry growth momentum. This quarter, our focus was on strategically promising projects that not only align with market growth opportunities but also demonstrate unique competitive advantages in their respective fields.
From Bitcoin re-pledging and DeFi applications to cross-chain liquidity integration, performance enhancements, and data processing optimization, these projects are pushing technological boundaries and expanding application scenarios. Additionally, we remain optimistic about AI-generated content and distributed computing as key drivers of future innovation.
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