OKX Ventures Crypto Investment Report in May

Over the past month, the cryptocurrency industry has experienced rapid growth. OKX Ventures has observed significant progress in several areas:The Bitcoin (BTC) ecosystem continues to evolve rapidly as OKX introduces the concept of BRC20-S. BRC-20-S adopts the design principles of BRC-20 and introduces staking-related operational features such as deposit, minting, and withdrawal. With BRC-20 also experiencing a wave of fast growth in May, the Total Market Cap now is up to USD$475 million and 24,000+ BRC-20 tokens. BRC-30 increases demand for block space, allowing miners to earn higher revenues, and can bring new communities to Bitcoin, enhancing the life of the Bitcoin community. OKX Ventures firmly supports the development of the Bitcoin ecosystem and will work with Unisat and other partners to lead the exploration of this field.

The zk Layer-2 ecosystem continues to thrive. The Total Value Locked (TVL) of zkSync, the top zk-scaling protocol among all, has exceeded $410 million, indicating a significant upward trend.Within three months, the cumulative number of depositors has skyrocketed from 10,000 to 770,000, achieving nearly 80x user expansion. Among them, about 20,000 accounts contributed over 27 million transactions. Despite a significant gap in TVL compared to Arbitrum and Optimism, the daily fees paid by users of zkSync have gradually surpassed the top 2.

As the leading protocol of multichain ecosystems, Stargate’s data has hiked significantly since March this year, with an increase of over 300% transaction volume, over 30 times Unique Active Wallets (UAW), and a stable user base of 150,000. It has won the favor among DeFi players rapidly due to its more convenient trading methods, cheaper transfer fees, and safer cross-chain methods. The Miner Extractable Value (MEV) area is gaining momentum as well. The estimated Total Addressable Market (TAM) of MEV has now accumulated around USD$450M, and new features such as SUAVE have been launched by Flashbots.

OKX Ventures maintained a constant focus on the industry in May and stayed bullish on the zk ecosystem, infrastructure, DeFi, Web3, and other sectors. To further boost the ecosystem, we have directly invested in Prisma, Rage Trade, Shutter, and several other projects.

Prisma

Project Overview

• Prisma is a new DeFi primitive focused on unlocking the full potential of Ethereum liquid staking tokens (LSTs).

• Prisma allows users to mint a stablecoin (acUSD) fully collateralized by liquid staking tokens. The stablecoin will be incentivized on Curve and Convex Finance to create a capital-efficient flywheel where users can receive trading fees, CRV, CVX, and PRISMA on top of their Ethereum staking rewards.

• Prisma’s codebase is completely immutable, based on Liquity, to create a robust protocol and truly decentralized stablecoin with favorable and flexible collateral parameters to make it attractive for those wanting to get the best out of their LSTs without tail risks from other stablecoins. The Prisma DAO will be in charge of parameters, emissions, and protocol fees.

Project Highlights

• Prisma allows users to mint Prisma’s native overcollateralized stablecoin (acUSD) against any of the below-listed LSTs, providing holders of liquid-staking ETH tokens with unrivaled capital efficiency. With the help of Ethereum staking rewards, loans secured by LSTs eventually pay themselves back.

• Prisma’s codebase is derived from Liquity, and the team has made every effort to honor its ethos, which embodies the best of DeFi: immutability, robustness, and decentralization.

• The market for Ethereum Liquid Staking Tokens (LSTs) is currently valued at USD$18 billion, which represents around 10% of Ethereum’s total market value. According to DeFiLlama, LSTs have recently become the largest DeFi category by TVL, making it the biggest addressable market in DeFi. OKX Ventures believes that Prisma will be the most promising project in this area.

Rage Trade

Project Overview

• Rage Trade is an innovative perp aggregator that aims to provide traders with the best prices and low rates. Rage Trade is initially integrated with GMX v2, a cutting-edge DEX, extending the capabilities and features of GMX v2 by developing a cross-margin multi-collateral layer on top.

• By offering a cross-margin, multi-collateral margin account on GMX v2, Rage Trade aims to replicate the cross-margin experience of Centralized Exchanges (CEXs) with the addition of offering extra margin on open positions and unrealized PnL.

• Its innovations such as Recycled Liquidity and 80–20 Vaults allow it to be competitive and sustainable when compared to other perpetual trading platforms. Delta Neutral Vaults minimize market exposure to GLP stakers and offer yield for USDC stakers.

Project Highlights

• Omnichain aggregation of liquidity: allowing access to liquidity from all other existing protocols through LayerZero, including Automated Market Maker (AMM) (e.g., Curve), money markets (e.g., Aave), derivatives protocols (e.g., GMX), could expand the depth of the pool.

• 80–20 Vaults strategy: could help the protocol to balance risk: i.e., it improves capital efficiency while preserving the safety of capital.

• Delta Neutral Vault: Provides liquidity on GMX in a Delta Neutral strategy (shorting in Aave through both Risk-Off Vault and Risk-On Vault, reducing the risk epoch to ETH and BTC) while earning ETH rewards on GMX, with the advantage of ensuring GLP stakers are rewarded by reducing market risk.

• Use of arbitrage-friendly vAMM: The vAMM model does not have the oracle linking prices to asset prices. vAMM is an independent market, so arbitragers can hedge their positions on the CEX and profit from price differences.

• OKX Ventures believes that Rage Trade can provide users with greater capital efficiency, more liquidity, a smoother trading experience, and more substantial LP returns through the above features.

Shutter

Project Overview

• Shutter Network is an anti-frontrunning/malicious MEV protocol that uses threshold encryption. Their primary focus is to collaborate with Layer-2s and side-chains to integrate this mechanism, add an encrypted or shielded mempool, and make their entire rollup/side-chain frontrunning/malicious MEV protected, as well as improve censorship characteristics.

Project Highlights

• The current MEV situation is a tremendous deterrent and blocker for mainstream adoption of DeFi. Additionally, the way the ecosystem is dealing with this today is heavily reliant on centralization and trust assumptions, e.g., in relayers or sequencers. Shutter can significantly reduce these trust assumptions and improve the user experience as well as robustness of decentralized marketplaces.

• The Shutter team’s product development is progressing very efficiently, and they expect the first instantiation of this type of front-running and censorship protection to be implemented into the Gnosis Chain. Additionally, they received a grant from Optimism DAO as a first step of adding an encrypted mempool into the OP stack. Shutter’s products have been recognized and demanded by multiple ecosystems.

• OKX Ventures is optimistic about the MEV track, believing that Shutter can effectively prevent the malicious part of MEV (front-running, sandwich attacks), while leaving the distribution of the “benevolent” types of MEV (arbitrage, liquidations). And provide more use cases based on its technical architecture, such as using the same threshold encryption DKG to provide shielded/encrypted voting in Snapshot.

About OKX Ventures

OKX Ventures is not a traditional financial investor. We not only provide funding, but also services and resources. We are committed to growing with our startup partners. We not only discover excellent teams, products and innovative technologies, but also enable excellent entrepreneurial projects.

OKX Ventures serves as the link between projects and OKX. We provide multi-dimensional platforms and support for project development using OKX’s years of industry experience. Our ecosystem support includes OKX Wallet, NFT Marketplace and OKT Chain.

Despite the current unfavorable global macroeconomic environment and the occurrence of black swan events, OKX Ventures focuses on the development of the industry itself rather than short-term market fluctuations. We prioritize real theoretical innovation, actionable new applications, significant user inflow and industry-wide scale increases. We are optimistic about the development of the Ethereum ecosystem, multi-chain ecosystem, Bitcoin ecosystem, infrastructure and innovative applications in the coming months.

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