Web3 AI Daily Review (2024/9/20)
On September 18, the Federal Reserve announced a 50 basis point rate cut, marking the beginning of a loosening cycle. However, analysts warn that the upcoming earnings season is more important for U.S. stocks. Although the S&P 500 index has risen about 19% this year, the market needs to be cautious of the panic that may arise from downward revisions of corporate profit expectations.1. Attention Value - Market Highlights
1. Market Trends
(1) Macroeconomic Environment:
l U.S. stocks face challenges in October earnings season; beware of market panic
The Federal Reserve announced a 50 basis point rate cut on September 18, marking the beginning of an easing cycle. However, analysts warn that the upcoming earnings season will be more crucial for U.S. stocks. Despite the S&P 500 index rising about 19% this year, the market needs to be cautious of potential panic triggered by downward revisions in corporate profit expectations.
Currently, the rise in U.S. stocks reflects a "Goldilocks" combination of economic growth, increased corporate profits, and lower interest rates. However, if future economic data or earnings reports perform poorly, the S&P 500's price-to-earnings ratio could rise to 22 times, exceeding reasonable valuations. Analysts indicate that downward revisions in corporate earnings forecasts are highly likely, especially in a high-interest-rate environment where consumer and corporate budgets are tightening.
The October earnings season will reveal more clues, with the earnings reports of Google's parent company Alphabet and Meta becoming focal points.
l JPMorgan warns: U.S. stock returns may significantly decline over the next decade
JPMorgan released a report stating that the average annual return of the S&P 500 index over the next decade may drop to 5.7%, only half of the level since the end of World War II. Analysts Jan Loeys and Alexander Wise pointed out that current U.S. stock valuations are high, with a price-to-earnings ratio of 23.7, well above the 35-year average of 19, indicating that future returns will revert to the mean.
Additionally, factors such as accelerated aging, government efforts to combat deficits, and increasingly stringent antitrust regulations are also putting pressure on U.S. stocks. As the "baby boomer" generation gradually retires, their allocation to stocks may decrease, further suppressing market performance.
JPMorgan also mentioned that there is uncertainty about whether U.S. companies can sustain growth after the pandemic-induced expansion. Over the next five to ten years, foreign investors' interest in dollar-denominated assets may weaken, affecting the long-term returns of U.S. stocks. Analysts emphasize that these observations are relevant for long-term investment decisions rather than short-term market fluctuations.
(2) Web3 Sector:
l UXUY DApp Center launched on Telegram, bringing multi-chain application experience to 900 million users
UXUY, incubated and invested by Binance Labs, announced the official launch of the first multi-chain application center on Telegram, the UXUY DApp Center. Users can seamlessly use applications such as gaming, trading, and lending on Telegram through the decentralized UXUY Wallet (@UXUYbot), exploring a richer Web3 ecosystem.
@UXUYbot provides users with a Metamask-like experience, integrating popular applications like Uniswap, Pancake, and Aave into the Telegram ecosystem for the first time. It currently has over 1.5 million users.
UXUY founder Kevin stated that Telegram is becoming a traffic entry point for the mass adoption of Web3, and the success of Notcoin, Catizen, and Dogs is attracting multi-chain ecosystems and infrastructure to migrate to Telegram. UXUY aims to be the most robust connector, bringing multi-chain application experiences to 900 million Telegram users.
2. Hot Events
Macroeconomic Environment:
l NVIDIA plans to acquire startup OctoAI for $165 million
NVIDIA proposed to acquire Seattle-based startup OctoAI for approximately $165 million, focusing on software that enhances the efficiency of AI model operations. This acquisition aims to strengthen NVIDIA's cloud computing and software service capabilities.
Founded in 2019, OctoAI initially helped developers deploy machine learning models and later shifted to providing services for quickly adjusting open-source or custom AI models. The company claims its software can reduce operational costs and improve performance, generating millions of dollars in revenue last year.
However, analysts believe this acquisition offer may provide limited returns for OctoAI's shareholders, with common stockholders receiving only two cents per share. OctoAI raised $132 million and was valued at around $900 million in 2021. NVIDIA has recently acquired several AI and cloud computing startups, and this transaction may face scrutiny from the U.S. Department of Justice, as OctoAI also collaborates with competitors like Amazon Web Services and AMD.
Japanese AI startup Sakana AI successfully raised approximately 30 billion yen (about $214 million) in Series A funding, bringing the company's valuation to $1.5 billion. Sakana AI was founded in July 2023 by former Google researchers. Investors in this funding round include Mitsubishi UFJ Financial Group, Mizuho Financial Group, Sumitomo Mitsui Banking Corporation, Nomura Holdings, and well-known companies such as NEC, Itochu Corporation, KDDI, and Fujitsu.
Sakana AI has secured processing time on Japan's supercomputer and is collaborating with various organizations to enhance Japan's AI ecosystem. This initiative aligns with NVIDIA's recent plans to support Japan's sovereign AI projects.
Web3 Sector:
Web3 startup Vana announced the successful completion of a $5 million strategic funding round, led by Coinbase Ventures. This funding brings Vana's total financing to $25 million.
Vana aims to build a user-owned data pool network that addresses the lack of training data for AI models through blockchain technology, providing internet users with opportunities to earn income. The company plans to establish a decentralized autonomous organization (DAO) network that allows members to aggregate data from social media platforms like Reddit, LinkedIn, or X, and sell these datasets to AI researchers.
Previously, Vana secured $18 million in Series A funding led by Paradigm.
3. Hot Narratives
Web3 payments and PayFi are currently two hot tracks in the cryptocurrency market. Web3 payments are payment methods based on blockchain and cryptocurrency technologies, enabling direct value transfer between users through smart contracts, DApps, and cryptocurrencies, without relying on traditional financial institutions. Unlike traditional payments, Web3 payments are not based on an account system but facilitate value transfer through decentralized networks, addressing issues such as high fees and low efficiency in cross-border transfers.
There are mainly two types of Web3 payments: deposit and withdrawal payments and cryptocurrency payments. Deposit and withdrawal payments refer to the exchange and payment between cryptocurrencies and fiat currencies, including purchasing cryptocurrencies with fiat (deposit) and exchanging cryptocurrencies for fiat (withdrawal). Cryptocurrency payments include on-chain native payments (using cryptocurrencies for transactions in Web3 native scenarios) and off-chain physical payments (using cryptocurrencies to purchase physical goods or services). Web3 payments connect fiat currencies with cryptocurrencies through deposit and withdrawal payments and establish a complete payment ecosystem through cryptocurrency payments.
The main profit models for Web3 payment projects include deposit and withdrawal fees, access service fees, blockchain gas network fees, and foreign exchange spreads. Among these, deposit and withdrawal fees and access service fees are the primary profit sources, heavily relying on network effects. The more users and merchants using Web3 payments, the larger the transaction volume, leading to more revenue.
PayFi is a new financial market built around the time value of money, combining DeFi and Web3 payments, aiming to maximize the time value of money. PayFi is applicable in scenarios such as Web3 transactions, off-chain consumption, creator monetization, and accounts receivable financing. Typical applications include Web3 payments integrated with DeFi, Web3 banking, RWA finance, payment financing, consumer Crypto payment applications, and flow payments.
With the market capitalization of stablecoins surpassing $2 trillion, the prospects for Web3 payments and PayFi are broad. PayFi can bring trillions of offline payment volumes on-chain, providing sustainable risk-adjusted returns and offering more efficient new financial applications based on smart contracts. Web3 payments and PayFi are expected to become important pillars of the digital economy.
4. Potential Catalysts
Polygon co-founder Sandeep Nailwal delivered a speech titled "The Age of Aggregation" at the TOKEN2049 conference, exploring the current state and future trends of the blockchain industry. He pointed out that while the blockchain industry has achieved some success, it still needs to address core issues such as scalability and interoperability. To achieve global adoption of blockchain, it is essential to break the constraints of traditional frameworks and pursue infinite scalability and unified protocols.
Sandeep introduced Polygon's innovative attempts to address these issues, particularly how its latest products achieve cross-chain interoperability and security guarantees by adding a layer of architecture. This architecture not only unifies liquidity but also allows developers to maintain complete control over their projects while enjoying infinite scalability. He stated that Polygon's goal is to enable every application to launch its own chain without being isolated, thus building a true value internet.
Sandeep also shared Polygon's optimistic outlook for the future of the blockchain industry and called on developers to actively embrace change and jointly promote the healthy development of the industry. With continuous technological advancements and the growing maturity of the ecosystem, blockchain will play an important role in a wider range of fields, injecting new vitality into the global economy.
Finally, Sandeep revealed new features and tools that Polygon is about to launch, aimed at further lowering development barriers and enhancing user experience.
2. Attention Value - Hot Projects
1. Social Media Highlights
Ethereum is a decentralized, open-source public blockchain platform with smart contract functionality. With the continuous development of Ethereum 2.0 and Layer 2, it has become one of the most widely used blockchains today. In July of this year, Ethereum spot ETFs were officially approved for trading. Although recent declines in $ETH due to reduced income and whale exits have been significant, the market remains largely optimistic due to its low inflation rate and strong development capabilities.
Key Projects:
· NEIRO
The name $NEIRO comes from a new dog adopted by the owner of the famous Shiba Inu Kabosu. The market initially thought that the ongoing $Neiro and $NEIRO case sensitivity dispute would be resolved with the launch of the $NEIRO contract on OKX and Binance in early September. However, new developments have emerged; after two weeks of the uppercase $NEIRO launch, the lowercase $Neiro, representing community strength, was directly launched on Binance, skyrocketing nearly 30 times within two days, bringing joy to the community and igniting on-chain enthusiasm.
2. Smart Money Accumulation
· Smart Money Holdings
Source: ChainEDGE, Dot Labs
Project Overview:
1. BRETT(@brettcoinonerc /X)
$Brett is a meme coin based on the Base blockchain, inspired by the character Brett from Matt Furie's comic "Boy's Club." This character is beloved by fans worldwide for his laid-back attitude and love for video games, closely associated with the important symbol in cryptocurrency culture, Pepe the Frog.
2. $michi(@michionsolana /X)
$michi is a cryptocurrency based on the Solana blockchain, designed to combine meme culture with a community-driven economic model. The design of $michi is inspired by a cute cat image, aiming to attract a broad user base, especially meme culture enthusiasts.
· Smart Money Inflows
Source: ChainEDGE, Dot Labs
Project Overview:
1. AGENT(@Agent_Layer /X)
Agent is a decentralized artificial intelligence blockchain protocol designed to provide a secure, permissionless environment for autonomous AI agents. Its token $AGENT was recently officially deployed on the Base chain, leveraging Base's large user base and active developer ecosystem to drive the expansion and development of its application scenarios.
2. MOTHER(@MOTHERprovides /X)
$MOTHER is a meme coin launched by Australian rapper Iggy Azalea on the Solana blockchain on May 28, 2024. Azalea actively promotes $MOTHER on social media, leveraging her 8 million followers on X (formerly Twitter) to generate buzz, resulting in a price surge of over 500% within 30 days of its launch.
3. Attention Value - Sector Rotation
1. Hot Sectors
Source: Dune, Dot Labs
Source: Dune, Dot Labs
2. Sector Internals
Source: Dune, Dot Labs
