From Pump.fun to Moonshot: Uncovering the secrets of Web3’s most popular consumer applications

In the past period of time, Alliance DAO has gained great influence by successfully incubating Web3 consumer applications such as Pump.fun and Moonshot. This article first summarizes Alliance DAO's investment philosophy for the Web3 consumer track and puts forward its own observations on this track to review the current mainstream paradigm of Web3 consumer applications, the challenges they face and potential opportunities, and finally summarizes our thoughts on the investment theory of Web3 consumer applications.

Alliance DAO incubates Web3 consumer track

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

1. Life Style

• Definition: A project that aims to cultivate a novel and healthy lifestyle for users through Web3.
• Quantity: 3 pcs;
• Specific projects:
• StepN: A Web3 lifestyle application with a core innovation mechanism called Move to earn. Users can purchase running shoes NFTs, track their sports data, and receive token rewards.
• Sleepagotchi: Web3 sleep monitoring and Sleep-to-Earn sleep aid game mobile application, card gacha development game, get tokens by sleeping, use tokens to participate in gacha card drawing.
• GM: Web3 AI Agent for health management, using AI to improve health and gain benefits

2. Games Class:

• Definition: Web3 Games or GameFi;
• Quantity: 10 pcs.
• Specific projects:
• Axie Infinity: Axie Infinity is a card game developed by Sky Mavis that allows players to breed, raise, battle, and trade Axie creatures.
• Genopets: Genopets is a Move-to-Earn NFT mobile game on Solana that makes an active lifestyle fun and rewarding. A Genopet is a player’s digital pet whose evolution and growth are inseparable from his own. The steps players take each day fuel their journey through the Genoverse as they explore, battle, and evolve — earning in-game cryptocurrency.
• Nine Chronicles: Nine Chronicles is a decentralized card-based fighting RPG game.
• Chibi Clash: Chibi Clash builds a Web3 gaming world centered around its flagship auto-battler. Inspired by the gameplay of Hearthstone Battlegrounds and the art style of MapleStory, Chibi Clash Auto Battler is an asynchronous PvP game where players can recruit, upgrade, and send troops into battle.
• Primodium: Primodium is building a fully on-chain, open-source, composable game where players aim to gain control of the map, research technology, and expand their factories.
• Starbots: Starbots is a robot battle NFT game where players can create fantasy robots to fight other competitors and then collect NFT items and tokens.
• Legends of Venari: Legends of Venari is a blockchain gaming startup that has created an exploratory creature collection role-playing game. In Legends of Venari, players can trap, tame, and collect Venari creatures in a player-driven sandbox, competing for territory and rare resources.
• Force Prime: Force Prime is a full-chain strategy Web3 game platform that provides a multiplayer hero battle experience. Players can train and customize their own heroes and fight against players around the world.
• Amihan: The first game of the game studio FARM FRENS, a TG casual farm game.
• Wildcard: Wildcard is a Web3 based card collection game for gamers, fans and collectors.

3. Crypto speculation:

• Definition: Focus on products that meet users' Crypto speculation needs;
• Quantity: 3 pcs;
• Specific projects:
• Pump Fun: Pump is a meme coin launch platform where users can launch a token that can be traded immediately without providing liquidity.
• Moonshot: Moonshot is a platform for discovering, buying and selling Meme coins, supporting users to make cash deposits using credit and debit cards, and cash out assets at any time through bank transfers.
• Candlestick: Candlestick is a crypto opportunity radar powered by actionable trading signals and forecasts, providing extensive data on the top gainers, top losers, and most traded coins.

4. SocialFi Class:

• Definition: The influence of Tokenize users on social media platforms forms new speculative projects;
• Quantity: 6
• Specific projects:
• fantasy.top: Fantasy is a SocialFi Trading Card Game (TCG) where players compete in an online game using trading cards of crypto influencers on the Twitter platform, leveraging their social capital and research expertise to monetize.
• 0xPPL: A decentralized social network for cryptocurrency native users, aggregating user content on Lens, Farcaster, and Twitter, and encapsulating some Crypto functions.
• time.fun: time.fun is a time tokenization platform that allows time holders to connect with their fans. As time holders provide more value to their fans, the value of their time will naturally increase due to market demand. Every time 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 with web3 families. fam. uses on-chain identities to allow users to easily find and gather fellow holders no matter where they are.
• Tribe.run: Tribe is a Solana-based encrypted social protocol. SocialFi, private groups, you need tokens to join the group, you can speculate, you can start video or voice live broadcasts, etc.
• EarlyFans: EarlyFans is a SocialFi product on Blast L2. Creators can make public commitments through EarlyFans and auction the commitments. Fans can also actively initiate bribes and auction the bribe rights. If the creator refuses or the bribe expires, all funds will be returned.

5. Creator Economy:

• Definition: A Web3 content distribution platform that provides a new economic model for content creators (text, video, art, etc.);
• Quantity: 2 pcs;
• 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 each community's treasury (or bank) to support their projects and missions on the chain. Communities can then directly manage their finances, leverage the unique skills of their members, and manage their organizations in a fun and social way.
• CreatorDAO: CreatorDAO is a decentralized autonomous organization (DAO) focused on accelerating creators’ careers and empowering them with shared access to capital, technology, and community. CreatorDAO provides creators with mentorship, the professional tools they need to grow their brands, and a community invested in each other’s success.

6. Finance:

• Definition: Products designed to reduce the cost of using and managing Crypto, such as deposits and withdrawals;
• Quantity: 3 pcs;
• Specific projects:
• Hana Network: Hana Network is a hyper-casual financial system with a social network effect, and has launched the fiat currency deposit and withdrawal solution Hana Gateway. Hana Network aims to achieve user-driven distribution through existing open social networks.
• P2P.me: A decentralized Indian deposit and withdrawal platform. The off-chain part improves security through a reputation system and improves privacy through ZK.
• Offramp: Offramp is a decentralized, decentralized fiat-to-crypto gateway protocol that enables anyone in the world to quickly get on/off cryptocurrency with full self-custody of funds, no KYC, and low fees.

7. Tools:

• Definition: Products that solve real-life problems for users, such as Web3 maps;
• Quantity: 1 piece;
• Specific projects:
• proto: The Indian version of Google maps, Proto is a user-generated, token-incentivized mapping platform that aims to transform the geospatial data industry. Through decentralized data collection, Proto is able to provide high-quality, real-time map data at a fraction of the cost of traditional methods. Proto's unique approach enables it to easily penetrate dense, complex areas, providing businesses with accurate and up-to-date data that meets their needs.

From the development trend of investment preferences, Alliance DAO began to invest in and incubate Consumer projects in 2021. From 2021 to the first half of 2023, its main investment and incubation direction focused on Games and creator economy projects. From the second half of 2023 to 2024, its preferences switched to Crypto speculation, SocialFi, and finance.

The author tracked some articles and podcasts published by Alliance DAO and summarized its investment philosophy on the Web3 consumer track as follows:

1. First, it believes that the basic tools of the ecosystem 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 PMF. Usually, there are two risks in the market verification process: product-side risk and market-side risk. The market-side risk of Consumer projects is greater, so it is necessary to consider avoiding the introduction of tokens too early, which may distort the PMF verification results.

3. The target users of Web3 consumer applications can be divided according to the degree of acceptance of Web3. The left side is for non-Web3 ordinary users and the right side is for Web3 Native users. The Web3 elements in the application design for the left users are mainly to reduce the cost of acquiring customers through "advertising tokens" and seize more market share. The users on the right need to focus on assetizing new targets, bring additional investment and speculation needs, or solve the unique needs of Web3 native users. From the results, their preference is currently more inclined towards the latter.

4. It is clear that the user portraits of the Solana ecosystem and the EVM ecosystem are different. The former is more conducive to the success of Consumer applications for four reasons:

• More vibrant community: Solana users are very 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: Solana’s core ecological members embrace the community more, have strong community mobilization capabilities, and respond more quickly to support new projects.
• Faster and low-cost infrastructure: Aims to build an on-chain Nasdaq with low transaction costs and high confirmation speeds. Since the basic components are not decentralized and are more focused on ease of use, the learning cost for new users is relatively low.
• Higher product competition barriers: Due to the use of non-EVM technology selection, the copy cost of Solana DApp is higher.

What are Web3 consumer applications?

The so-called consumer applications, or To C applications in the Chinese context, means that your target users are most ordinary consumers, not enterprise users. Open your App Store, and all the applications in it belong to this category. Web3 consumer applications refer to consumer-oriented software applications with Web3 features.

Generally speaking, according to the classification in most App Stores, we can roughly divide the entire consumer application track into the following 10 categories, and each category has different subdivisions. Of course, as the market matures, many new products will combine multiple features to a certain extent in order to find their own differentiated selling points, but we can still make a simple classification according to their core selling points.

Web3 consumer application paradigm and its opportunities and challenges

Based on the analysis of Allinance DAO’s investment philosophy and my own observations, I believe there are three common paradigms for Web3 consumer applications:

1. Utilize the technical features of Web3 infrastructure to optimize the problems of some traditional consumer applications:

This is a common paradigm. We know that a lot of investment in the Web3 industry is centered around infrastructure construction, and application creators who adopt this paradigm hope to leverage the technical features of the Web3 infrastructure to enhance the competitive advantage of their products or provide new services. Generally, we can classify the benefits of these technological innovations into the following two categories:

• Ultimate privacy protection and data sovereignty:
• Opportunity point: The privacy track has always been the main theme of Web3 infrastructure innovation. From the initial asymmetric encryption algorithm identity confirmation system, it has gradually integrated many software and hardware technologies, such as ZK, FHE to TEE. A group of technical experts in Web3 seem to uphold the extreme theory of human nature, aiming to create a network environment that is completely independent of third-party trust and provide users with the ability to interact with information or value. The most direct benefit of this technical feature is that it brings data sovereignty to users. Personal privacy information can be directly hosted in local trusted software and hardware devices, avoiding the leakage of privacy information. There are many Web3 consumer applications optimized for this technical feature. Any project that claims to be decentralized XX belongs to this paradigm, such as decentralized social media platforms, decentralized AI large models, decentralized video websites, etc.
• Difficulty: After years of market verification, it can be said that this core selling point has not been observed to have obvious advantages in market competition. There are two reasons. First, consumers' emphasis on privacy is based on large-scale privacy leaks and infringements. However, in most cases, the formulation of more complete laws and regulations can effectively alleviate this problem. Therefore, if the protection of privacy is based on a more complex product experience or a more expensive use cost, its competitiveness will be obviously insufficient. Second, we know that the current business model of most consumer applications is based on the value of big data extraction, such as precision marketing. Over-emphasizing privacy protection will shake the mainstream business model, because user data will be scattered in a number of data islands, which makes it difficult to design a sustainable business model. If you can only rely on the so-called "Tokenomics" in the end, you have to introduce unnecessary speculative attributes to the product. On the one hand, this disperses the team's resources and energy to deal with the impact of this attribute on the product. On the other hand, it is not conducive to finding PMF. The specific analysis will be given below.
• Low-cost, global, 24/7 trusted execution environment:
• Opportunity point: The emergence of many L1 and L2 provides application developers with a new, global, all-weather multi-party trusted program execution environment. Usually, traditional software service providers independently maintain their own programs, such as running them on their own server clusters or clouds. This naturally brings trust costs in businesses involving multi-party collaboration, especially when the strength or scale between the multiple parties is balanced, or when the data involved is particularly sensitive and critical. This trust cost is usually converted into huge development costs and user usage costs, such as cross-border payment scenarios. The execution environment brought by Web3 can effectively reduce the costs associated with running such services. Stablecoins are a good example of such applications.
• Difficulty: From the perspective of reducing costs and increasing efficiency, this is indeed a competitive advantage, but it is difficult to explore application scenarios. As mentioned above, only when a service involves multi-party collaboration, the relevant entities are independent, the scale is balanced, and the data involved is particularly sensitive, can the use of this execution environment bring benefits. This is a relatively demanding condition. At present, most of these application scenarios are concentrated in the field of financial services.

2. Design new marketing strategies, user loyalty programs or business models using crypto assets:

Similar to the first point, application developers who adopt this paradigm also hope to increase the competitive advantage of their products in a relatively mature and market-proven scenario by introducing Web3 attributes. However, these application developers are more interested in introducing crypto assets and taking advantage of the extremely 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 kinds of value, commodity attributes and financial attributes. The former is related to the use value of the target in a certain actual scenario, such as the habitable attribute of real estate assets, while the latter is related to its transaction value in the financial market. In the field of crypto assets, this transaction value usually comes from speculative scenarios brought about by circulation and high volatility. Crypto assets are an asset class whose financial attributes are far higher than commodity attributes.

In the eyes of most such application developers, the introduction of encrypted assets usually brings three benefits:

• Reduce customer acquisition costs through Token-based marketing activities such as Airdrop:
• Opportunity: For most consumer applications, how to acquire customers at low cost in the early stages of a project is a key issue. Tokens, with their extremely high financial attributes and assets created out of thin air, can significantly reduce the risks of early projects. After all, compared to directly using real money to buy traffic and gain exposure, using tokens created at zero cost to capture users is indeed a more cost-effective option. From a certain perspective, such tokens are similar to advertising tokens. There are quite a few projects that adopt this paradigm, such as most TON ecological projects and mini-games.
• Difficulty: This customer acquisition method faces two main problems. First, the conversion cost of seed users obtained by this method is extremely high. We know that most of the users attracted by this program are cryptocurrency speculators, so these users are not so concerned about the project itself, and are more likely to participate in the potential financial attributes of the reward. Moreover, there are currently a large number of professional airdrop hunters or hair-pulling studios, which makes it extremely difficult to convert them into real product users in the later stage. And it may cause the project to misjudge PMF, resulting in excessive investment in the wrong direction. Second, with the large-scale application of this model, the marginal benefits of using Airdrop to acquire customers are reduced, which means that if you want to establish sufficient attraction among the cryptocurrency speculator group, the cost will gradually increase.
• X to Earn based user loyalty program:
• Opportunities: Retention and activation is another issue that consumer applications are concerned about. How to ensure that users continue to use your product requires a lot of energy and cost. Similar to marketing, using the financial attributes of tokens to reduce the cost of retention and activation has also become the choice of most such projects. A more representative model is X to Earn, which rewards key user behaviors based on tokens in advance and establishes a user loyalty program based on this.
• Difficulty: Relying on the motivation of users to earn income to promote activity will shift users' attention from the product function itself to the rate of return. Therefore, if the potential rate of return decreases, users' attention will also be lost quickly, which is a great harm to consumer applications, especially some products that rely on a large amount of UGC. If the rate of return is based on the price of the token issued by itself, it will put pressure on the project party to manage the market value, especially in the bear market stage, and it will have to bear high maintenance costs.
• Directly cash out using the financial attributes of Tokens:
• Opportunity point: For traditional consumer applications, there are two most common business models. One is free use, which uses the platform traffic value after large-scale adoption to realize value. The other is paid use. If you want to use certain Pro services in the product, you need to pay a certain fee. However, the former takes a long time, and the latter is more difficult. Therefore, Token brings a new business model, which is to use the financial attributes of Token to realize value directly, that is, the project directly sells coins to cash out.
• Difficulty: It can be clearly stated that this is an unsustainable business model. The reason is that after the project has passed the early high-growth stage, due to the lack of incremental capital inflows, this zero-sum game model will inevitably put the interests of the project party in opposition to the interests of users, accelerating user loss. If the project party does not actively cash out, due to the lack of strong cash flow revenue, the project party can only rely on financing to obtain funds to maintain the team or expand the business, which will fall into the dilemma of relying on the market environment.

3. Fully serve Web3 native users and solve the unique pain points of these users:

The last paradigm refers to consumer applications that fully serve Web3 native users. According to the direction of innovation, they can be roughly divided into two categories:

• Construct a new narrative, design monetization around some untapped value elements of Web3 native users, and create a new asset class:
• Opportunity point: By providing new speculative targets for Web3 native users (such as the SocialFi track), the benefit is that they have the pricing power over a certain asset at the initial stage of the project, thereby obtaining monopoly profits. This can only be achieved in traditional industries after fierce market competition and the construction of strong competitive barriers.
• Difficulty: Frankly speaking, this paradigm is more dependent on team resources, that is, whether it can obtain the recognition and support of people or institutions with strong appeal among Web3 native users, or with the "pricing power" of crypto assets. This brings two difficulties: First, with the development of the market, the pricing power of crypto assets is dynamically transferred among different groups, for example, from the initial Crypto OG, to crypto VC, then to CEX, then to crypto KOL, and finally to traditional politicians, entrepreneurs or celebrities. In this process, whether it is possible to identify trends and establish cooperation with upstarts at each power transition has created great requirements for team resources and market sensitivity. Second, in order to establish a cooperative relationship with the "pricer", it usually takes a huge cost and price, because in this market, you are not competing with other opponents for a larger market share in a certain application track, but competing with all other crypto asset creators for the preferences of the "pricer", and this is a very competitive game.
• By providing new tool products, we can serve the unmet needs of Web3 native users in the process of participating in the market. Or we can provide these users with better and more convenient products from the perspective of user experience:
• Opportunities: With the gradual popularization of cryptocurrency, the overall base of this user group will gradually expand, which makes it possible to segment users. And because it focuses on the real needs of a certain user group, such products are often easier to achieve PMF, thereby establishing a more robust business model, such as some transaction-related data analysis platforms, Trading Bots, information platforms, etc.
• Difficulty: Since it returns to real user needs, the product development path is more robust, but the construction cycle is longer than other paradigm projects. Moreover, since such projects are not narrative-driven but driven by specific needs, the product's PMF is easier to verify. Large amounts of financing are usually not available in the early stages of the project. Therefore, it is very difficult to remain patient and stick to the original intention in the complex "coin issuance" or wealth myths brought about by high-valuation financing.

Thinking about the investment theory of Web3 consumer applications

Next, let me introduce our thoughts on the investment theory of Web3 consumer application track, 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, Friend.Tech's development path can give us a lot of inspiration. According to Dune data, Friend.Tech's current cumulative Protocol Fee has reached $24,313,188. The total number of cumulative users (Traders) has reached 918,888. For a Web3 application, this data performance is very impressive.

However, the development of this project has encountered relatively large challenges, and the reasons are multifaceted. First, in terms of product design, Friend.Tech introduced the design of Bonding Curve, which introduced speculative attributes to social applications, and attracted a large number of users in the short term by relying on the wealth effect. However, in the medium and long term, this approach also raises the threshold for users to enter the community, which is contrary to the current practice of most Web3 projects or KOLs relying on public domain traffic to establish influence. In addition, Friend.Tech over-bundled the practicality of the token with the product, resulting in too many Web3 speculative users in its products, which distracted users from the practicality of the product and ultimately led to the current situation.

Therefore, for most Web3 consumer applications, after accumulating a large number of users, they need to carefully consider how to find PMF, maintain user engagement, help projects transcend the speculative cycle, and build a sustainable business model. If these problems can be effectively solved, Web3 consumer applications can gain real Mass Adoption.

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

In general, investment evaluation of Web3 consumer applications mainly starts from two aspects. The first aspect is to analyze the market potential of the product based on its operational data. It can be roughly divided into two dimensions:

• User data: For most consumer applications, user data is always the most important, because a sufficient user base is the prerequisite for consumer applications to explore business models. Therefore, similar to most traditional Web2 consumer application evaluations, we can use traditional evaluation indicators such as the number of active users, user growth rate, and user retention rate to determine whether PMF has been found. In addition, for Web3 consumer applications of different categories and stages, the focus will also be different. Taking Web3 Social applications as an example, user retention rate will be more important. Investors generally start from the niche market. When they find that an application has a very strong retention rate within a user range with unique characteristics, it means that it has investment value. Of course, during the evaluation process, it is also necessary to carefully identify the water in the data to avoid bot users from misjudging PMF.
• Conversion data: In addition to user data, conversion data is also needed to determine its potential commercial value, such as AUM and User spend. If a project has many users, but the AUM is small, or the average spend of a single user is small, it means that the commercial value is relatively limited. Of course, not all revenue data is the same, and the quality of revenue can vary greatly. If the revenue structure is based on real revenue, it means that the users here are paying for the products they provide, not for mining their tokens. Such a business model will be more sustainable.

The second aspect is the judgment of the team, which focuses on three aspects. The first is the technical strength of the team, which is the core of their ability to build a product moat and thus form a competitive advantage. Secondly, the team needs to have a strong sense of the market and be open, able to identify market opportunities in a timely manner, which users' needs are not met, and adjust the business direction in a timely manner. Finally, team resources are also relatively important, such as cooperative relationships with other applications and cooperative relationships with KOLs, which determine the success rate of the release process.

3. How to define a successful Web3 consumer application

From an investor's perspective, it is also an interesting question to define a successful Web3 consumer application, or is the success of a Web3 consumer application driven by revenue or token price? In general, the two are interrelated. If a project cannot generate revenue continuously, then in the end, the tokens it issues will not have much future. However, this evaluation criterion also depends mainly on your investment period. If the overall investment period is shorter, the judgment of the token price is more important, and the judgment of the token economics is more important at this time. If it is a long-term value investment, the performance of revenue data and the sustainability of the revenue structure are more important.

4. The “Application Factory Model” may be a more deterministic 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 is to continuously trial and error, develop a large number of different types of products, let the market choose a few successful directions, and continue to invest resources to expand their business. For them, the key to the success of this strategy is that they have accumulated a large number of user resources, reducing their trial and error costs. And this experience can be applied to the Web3 industry.

Therefore, from this perspective, similar projects such as Friend.Tech still have opportunities in this cycle. At least in the short term, they have shown appeal, attracted a large number of users, and have good revenue capabilities, which will help them become Web3 application factories. Therefore, their subsequent development is also worthy of attention.

5. What are the characteristics of the next successful Web3 consumer application?

We believe that in the next cycle, successful Web3 consumer applications will emerge in the following three paradigms. The first paradigm is to rely on the fun of the product to attract some crypto KOLs to adopt it first, and then use the KOLs' own influence to bring their fans to the platform to help the project complete the cold start. Kaito is a representative of this paradigm. The team has strong technical capabilities and innovative incentive mechanisms to control a large number of mindshares in the crypto community, helping them to have good penetration in different communities. At the same time, it hits the pain point of how Web3 projects can effectively acquire users in the marketing process. After accumulating a large number of C-end users, it has established accurate user portraits for each user through mindshare, helping Web3 companies to conduct precision marketing through the Kaito platform, which will make its business model more sustainable and get rid of short-term speculation cycles.

The second paradigm is to start from the real needs of Web3 users and directly win the market by relying on product strength. Since tokens are not introduced too early, they will be able to get rid of the interference of speculative users in the process of PMF and establish a higher user retention rate, such as Polymarket, Chomp, etc.

The third paradigm is the innovation of business models. Grass has given us a lot of inspiration in this regard. It uses users' idle computing resources to help them find sources of value capture in fields such as artificial intelligence and monetize them with tokens. Although Grass is more inclined to the 2B model in terms of business model, this "sharing economy" thinking can also be used in the design of Web3 consumer applications.

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

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

First of all, Web3 social applications are still favored by the market. We know that most Web3 projects attach great importance to and rely on social media for marketing, and compared with 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 exploring assetization or niche market needs, and learning from the experience and lessons of friend.tech, introducing a more sustainable business model and stronger user retention rate, Web3 social applications will be able to get rid of the suspicion of excessive speculation and find PMF.

Secondly, on-chain trading tool applications also have good potential. With the continuous development of MEME, investors are paying more and more attention to on-chain transactions. The popularity of on-chain trading tools such as OKX Wallet and GMGN proves the strong market demand for this. With the large-scale adoption of mainstream trading tools, the yield of homogeneous trading strategies will show a downward trend, so users' customized needs will continue to increase. If we can provide these users with differentiated on-chain trading tools or investment strategies, the market potential of related products is also good.

Payment applications are also one of the categories worth looking forward to in the future. With the passage of the bill related to payment stablecoins some time ago, the regulatory pressure that payment applications previously carried has been released. Therefore, we have reason to believe that in the future, Web3 payment applications will build competitive barriers in scenarios such as cross-border payments and idle funds management by relying on the advantages of low cost and high settlement efficiency brought by blockchain technology.

Finally, the development of DeFi is also worth paying attention to. First of all, as one of the few scenarios that have found PMF, DeFi has become an indispensable category in the Web3 industry. From the success of Hyperliquid, we can see that users still have a demand for decentralized attributes. With the continuous improvement of infrastructure, the performance limitations of previous decentralized applications will be broken. In financial application scenarios with high requirements for execution efficiency such as high-frequency trading, DeFi will bring the same performance as CeFi products, so we have the opportunity to see more products like Hyperliquid impacting the original CeFi system.