Jan 13, 2025: Our weekly Institutional Insights explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

 explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

Weekly Highlight — Unexpectedly Strong U.S. Employment Rattles Market

In December, the U.S. economy added 256,000 jobs, the largest increase since March 2024, while the unemployment rate unexpectedly dropped to 4.1%. This robust performance suggests a pause in the Federal Reserve interest-rate cuts may be forthcoming. Despite high borrowing costs and inflation, the labor market added 2.2 million jobs in 2024, slightly below 2023's growth, and revisions have indicated a more resilient labor market than previously thought.

Job growth was led by sectors like healthcare and retail, though manufacturing experienced losses. Wage growth is slowing, with average hourly earnings up 3.9% year-over-year. Economists have noted surprising gains in the household survey, indicating potential market stabilization. However, concerns persist about layoffs and the impact of the incoming administration's economic policies, alongside scrutiny of declining response rates in job data.

Weekly Crypto Highlight — Decentralized Finance Has a New Category (DeFAI)

The number of AI agents is rapidly increasing, covering various areas such as trading bots and automation tools, and can be chaotic and overwhelming. However, focusing on a promising niche — DeFAI, which merges 

 (DeFi) with artificial intelligence (AI) — could be transformative.

DeFAI aims to simplify DeFi for everyday users through AI agents. While DeFi was intended to democratize financial tools, its complexity has limited its reach. The goal is to make using DeFi as straightforward as texting a tech-savvy friend. Users should be able to simply say, “Stake my ETH,” and let AI handle the details.

Although many DeFAI projects are still in their early stages and reliant upon technical advancements, the potential is substantial. Benefits include user profitability, as over 80% of users can achieve better profits with AI-driven trading and farming, minimizing costly human errors. Additionally, there’s significant revenue potential, with existing trading bot protocols like Photon and BananaGun successfully simplifying DeFi, offering a model for future DeFAI projects. Unlike many AI offerings, these agents provide genuine value to DeFi.

Daniele Sesta, founder of Frog Nation, a synergistic network of DeFi projects, has identified three key use cases for AI in DeFi: 

, a chat-based interface for Solana DeFi currently in invite-only access; 

, a forthcoming tool (led by Daniele Sesta) that simplifies DeFi activities; and 

, an ETH Layer 2 with 129 AI agents on the network that’s already facilitating over 1,600 transactions on a daily basis. These innovations have the potential to redefine DeFi user engagement.

Advanced

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Weekly Institutional Insights: Risk Assets Fall on Lower Rate Cut Expectations; Say Hi to DeFAI

ai16z (AI16Z) redefines venture capital with AI-driven investments on Solana. Powered by DAO governance, its AI agent leads innovation in blockchain VC.

 (AI) agents in the crypto industry has experienced unprecedented growth over the past couple of years, even by the standards of the already booming overall AI sector. Smart agents that automate a variety of complex tasks have been a major driver of growth for many innovative businesses, including in the blockchain niche. 

Now, one project is taking it all to a completely new level by pioneering AI-driven venture capital (VC) investment. Named ai16z (AI16Z), it’s a 

 (DAO) that uses community-driven governance and smart VC investing managed by a powerful 

 known as “Marc AIndreessen.” Anyone familiar with the world of technology investing and its behemoth, Andreessen Horowitz (also known as a16z), has probably guessed that the name of the DAO-based project is a tongue-in-cheek reference to this giant of the investment sector, and the Marc AIndreessen AI agent is an allusion to its maverick co-founder, 

Having started its operations in late October 2024, ai16z has already seen its native token, AI16Z, hit a 

 of $2 billion on New Year's Eve, Dec 31, 2024, the first Solana-based AI agent cryptocurrency to achieve this feat.

 blockchain that uses a DAO governance model and utilizes an AI agent to invest in technology-focused projects and crypto assets. 

The ai16z platform is a bold undertaking to completely redefine the way VC investment works. Community members 

 holders of the platform’s native token, AI16Z 

 participate in a democratized governance process and may propose projects for consideration by the AI agent, which ultimately manages ai16z’s investment activities. Token holders can provide their input into investment opportunities, but the process of investing is managed by “Marc AIndreessen” 

 an AI agent created using the popular Eliza development framework.

The platform's name, ai16z, is a humorous reference to Andreessen Horowitz, also known as a16z, a leading technology investment firm, while Marc AIndreessen is a pun referencing a16z's co-founder, Marc Andreessen.

The project was launched on Solana in late October 2024. By Dec 31, 2024, its native token, AI16Z, had reached a market cap of $2 billion, a level that no other AI agent crypto on Solana has so far managed to attain. As of the time of this writing on Jan 10, 2025, AI16Z has become the industry’s third-highest-capped cryptocurrency in the category of AI agents, with a market cap of around $1.7 billion.

The platform's investment management agent, the AI Marc, has been developed using ElizaOS, a popular framework for developing AI agents. ElizaOS allows you to build sophisticated AI agents for complex tasks ranging from social media personas to interactive characters. in the case of the ai16z platform, the Marc AIndreessen agent is certainly capable of highly sophisticated functionality, with the ability to make and execute investment decisions.

The Eliza project's origins date back decades before the birth of blockchain technology. In 1966, Joseph Weizenbaum, a computer scientist at the Massachusetts Institute of Technology (MIT), created the ELIZA program, a rule-based system with elements of early AI technology. ELIZA allowed users to have rudimentary text-based interaction with the computer, essentially acting as the first AI chatbot. Decades later, the program was adapted to the needs of the now booming 

 to form the basis of the Eliza AI agent development framework.

ai16z's Eliza-based Marc AIndreessen is among the most popular recent examples of this technology. The AI Marc acts as a multi-functional agent that can analyze on-chain data and transactions, execute orders and evaluate project proposals submitted by the platform's user community.

The term “virtual marketplace of trust” refers to the ai16z component that manages and maintains trust scores, assigned to the platform's users, to enhance investment decision-making. As we noted earlier, holders of the AI16Z token can propose projects and assets for AI Marc's consideration.

The marketplace of trust combines three main components to create and manage trust scores:

The platform’s AI investment manager, the Marc AIndreessen AI agent, is publicly represented on social media with the X handle of 

. This “AI Marc joined” the social media platform back in September 2022, and as of early January 2025 has over 30,000 followers.

Marc AIndreessen’s X account boldly predicts that the AI venture capitalist is going to outperform the real-world Marc Andreessen, something that is, of course, going to be a challenging task. At the time of this writing, Marc AIndreessen has around $25 million in assets under management (AUM) — not the worst result for a three-month-young project — although this is a fraction of the over $40 billion managed by the real-world Marc Andreessen.

 is another initiative related to the ai16z platform. It lets token creators, typically those launching 

, conduct fundraising activities to support their projects. Creators are given one week to conduct their fundraising, and can choose who to invite to their fundraising activities. If successful in raising funds, a creator receives 90% of the amount (in the form of Solana’s SOL tokens) to invest in their preferred protocols on the blockchain.

The funds and investors attracted by the creator are structured as a DAO, specific to that token and its investment activities.

daos.fun is one of the recent examples of meme coin launch platforms on which creators have the opportunity to crowdfund their projects. These platforms have grown popular in the aftermath of the successful market run of 

, a Solana-based meme coin launchpad introduced in early 2024. However, daos.fun maintains creator verification, potentially making it a safer environment for investors interested in meme coin projects.

Unlike pump.fun, with daos.fun, verified creators are issued special badges to signal their trustworthiness. This is potentially a key factor in reducing the risk of users investing in 

, a problem of gigantic proportions in the world of meme coins.

The AI16Z token was launched in late October 2024, initially trading at $0.02–$0.06. In mid-November, the token received its first major boost when a partner at Andreessen Horowitz mentioned the AI fund in their post on X. On Nov 19, 2024, the token rose to nearly $0.50 before losing some of these gains over the following days.

However, the real boost to the token’s fortunes came in late December. On Dec 23, 2024, AI16Z was trading at around $0.60. It started to rise sharply from then on, and by Jan 2, 2025, the token catapulted to its all-time high of $2.47. Although AI16Z has lost some of these spectacular gains as of Jan 10, 2025, it still flies high, trading at $1.51. The market has clearly shown an enthusiastic attitude to the idea of AI agent–based crypto investment.

As of Jan 10, 2025, AI16Z is trading at $1.54, 38.4% below its Jan 2, 2025 all-time high (ATH) of $2.47 and 14,809.5% higher than its ATL of $0.01019 on Nov 3, 2024.

Long-term forecasts for the token are largely bullish.DigitalCoinPrice 

 to trade at $5.30 in 2027 and $8.23 in 2030, whileCoinCodex 

AI16Z is available on Bybit's Spot market as a 

. To buy the token, first, navigate to the 

 section in the main menu on Bybit's homepage, then select the

option from the drop-down menu to find the Spot pair. Alternatively, enter the token's ticker in the search box at the upper right side of the homepage. You’ll see the 

 option appear. Click on that option, and it will take you to the pair's trading page. On the right side of the page, enter the options for the quantity to buy and order type. Having specified your options, press the prominently displayed 

 campaign to grab a share of a 50,000 AI16Z prize pool. Under the terms of the campaign, new users need to accumulate a deposit volume of at least 100 AI16Z, or deposit 100 USDT and trade 100 USDT worth of AI16Z via their first trade with Bybit, in order to share in a 35,000 AI16Z prize pool. Meanwhile, existing users can also earn rewards by simply trading at least 500 USDT worth of AI16Z on Bybit’s Spot market to earn their share of a 15,000 AI16Z prize pool. The campaign is valid through Jan 20, 2025, 8:59AM UTC, and rewards are on a first-come, first-served basis.

The ai16z platform is the ultimate AI/crypto synergy initiative. It's the first venture capital firm to employ AI agents in the core function of investment management. The project aims to become a real disruptor in the field. Currently, the $25 million in AUM handled by the AI Marc looks quite modest. However, the project is still in the early months of its market presence, and only time will tell if the AI-based VC model championed by ai16z becomes a viable alternative to traditional investment fund management.

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ai16z (AI16Z): The AI-Driven DAO Redefining Venture Capital

Seraph is an advanced AI agent built by BitMind, designed to operate autonomously or semi-autonomously across diverse applications. Find out more now!

 emerges as a new autonomous AI agent at the intersection of blockchain technology and AI, combining the decentralized intelligence of 

. Designed to serve as the ultimate digital guardian, Seraph operates as an authenticator and evaluator, distinguishing truth from deception in a world increasingly dominated by synthetic data.

This article delves into the ecosystem of Seraph by Virtuals and its unique features, market performance and benefits for Bybit users.

 is a blockchain-based platform built on the 

 network that enables its users to create AI agents — virtual characters that can engage and interact within their environments in ways that closely mimic human behavior. These AI agents are designed to operate autonomously — learning, making decisions and even performing on-chain transactions, making them versatile tools for various applications.

The platform addresses the untapped potential of the $100 billion AI market, particularly within the 

 industries. It introduces decentralized co-ownership of AI-powered tokens, giving users tangible value through their engagement with its ecosystem.

Virtuals Protocol offers two types of agents:

In brief, Virtuals Protocol’s AI agent platform ensures transparency, security and co-ownership, evolving the way AI agents are integrated into gaming, entertainment and beyond.

, is designed to operate autonomously or semi-autonomously across diverse applications. Its platform prioritizes transparency, security and decentralization in its operations, and embodies the concept of a self-reliant digital entity capable of learning, adapting and performing tasks with minimal human intervention. 

Whether in gaming, content creation or data analysis, Seraph’s integration with blockchain frameworks such as Virtuals Protocol enables it to interact smoothly within decentralized ecosystems. This innovative approach positions Seraph as a transformative tool, bridging AI advancements with web3’s decentralized principles.

Leveraging advanced AI algorithms, Seraph can execute tasks based on predefined instructions and learned behaviors. This adaptability allows it to make decisions and perform actions autonomously, enabling superb functionality across a variety of use cases, such as gaming, content creation and data analysis. 

Built on the Virtuals Protocol, Seraph boasts exceptional interoperability to support interaction across multiple blockchain platforms and 

 (DApps). This design ensures Seraph’s versatility, allowing it to function within diverse ecosystems while maintaining transparency and security. 

Ownership of Seraph is represented through tokenization, making it a co-owned AI agent. Each SERAPH token corresponds to one ownership stake, enabling contributors to share in the potential growth and value of Seraph’s performance.

Seraph generates revenue through various activities, such as facilitating transactions or performing specialized tasks. This revenue is distributed among its token holders, creating a passive income stream for co-owners. Ultimately, Seraph incentivizes participation and fosters a sustainable ecosystem in which users and developers can mutually benefit.

By integrating with Bittensor, Seraph accesses a decentralized intelligence network that enhances its AI inference capabilities. Bittensor’s infrastructure provides Seraph with enough processing power and specialized outputs to ensure accuracy, efficiency and reliability in its operations. Virtuals Protocol further strengthens Seraph’s foundation by offering a secure, scalable platform for deploying AI agents. 

Seraph’s design supports deployment in a wide range of scenarios:

Integration With Bittensor and Virtuals Protocol

Bittensor’s decentralized intelligence framework allows Seraph to learn and adapt continually, while its TAO emissions provide Seraph’s operations with efficiency and incentivize both developers and stakers with a reward-driven model. Meanwhile, Virtuals Protocol enabling co-ownership and transparent interaction within the blockchain ecosystem. Together, these technologies empower Seraph to function as a highly effective AI agent that embodies the principles of decentralization, security and utility.

 an innovative staking mechanism that benefits its participants as follows:

The staking model aligns user incentives with Seraph’s mission, fostering a collaborative ecosystem for all participants to thrive.

 of $21 million, with a drawdown of 42% over the past week amid a wider market sell-off. However, the token is up 35% in the past 14 days, and reached an all-time high of $0.03859 on Jan 2, 2025.

SERAPH has a maximum supply of 1 billion tokens and a circulating/total supply of 999,550,515 million as of Jan 9, 2025.

Seraph by Virtuals merges AI and blockchain to deliver autonomous, interoperable agents, positioning itself as a transformative force in the broader web3 and DeFi system. Its road map includes expanded applications and enhanced utility, paving the way for future innovations. 

 the current SERAPH Launchpool event and stake SERAPH, MNT or USDT to earn a share of 15,000,000 SERAPH. Sign up 

Intermediate

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Seraph by Virtuals: AI Agent Utilizing Bittensor and Virtuals Tech

In the first of Bybit Learn's "Alpha Chats" series, we speak to Unipcs, known as Bonk Guy on Crypto Twitter (CT). He shares valuable insights on how to handle holding positions through large volatility, his outlook for meme coins and market predictions for 2025.

 on Crypto Twitter (CT) for turning $16,000 into over $18 million on his BONK position on Bybit.

A long-time user of Bybit and a Bybit partner, Unipcs sheds light on his crypto journey so far, sharing valuable insights on how to handle holding positions through large volatility, his outlook for meme coins and market predictions for 2025.

*Please note that this article and any tokens mentioned is not financial advice. The interview is slightly edited for formatting and grammar.

Q: Happy new year Unipcs! It's been a few months since you last 

 to Bybit. During that time, Bitcoin went above 100K and the term "Bonk Guy Was Right" was all over CT. How did it feel like being the main character on CT?

I've never cared about being 'main character' because it is often just a fleeting distraction and zero indication of how well you can trade or how much money you'll make at the end of the day, which is what matters most.

Although I did feel validation from people acknowledging that I at least know what I'm talking about due to the outperformance of my BONK trade, since many were clowning about me when I first came into the scene over a year ago and were claiming that I got lucky with that trade.

Q: What is Bonk Guy's crypto story — when and how did you get into crypto? How much did you start with? And what are some advice you would give to someone new starting out in crypto with a small portfolio?

I first discovered crypto over a decade ago when the Silk Road was being widely covered by mainstream media and they all kept mentioning the key role Bitcoin is playing in it.

I didn't take Bitcoin seriously at the time because it was painted as this shady internet money used by drug lords and serial killers.

I eventually did my own research and got into crypto years later when I realized that the media won't stop talking about it and something seemed off with the narrative they were painting.

I didn't start with a lot of capital: I initially started with five figures, lost everything, then restarted with much smaller capital. I can't remember the exact amount now, but it should be roughly mid to high four figs, and I've mostly built everything from there.

My advice if you're starting with a small portfolio and your goal is to rapidly increase your capital is that you should think beyond BTC: While BTC is the safest cryptocurrency to hold, you might want to consider having exposure to altcoins, meme coins and low caps.

Once you realize that you need altcoins to rapidly increase your small portfolio, how do you allocate?

Three things to pay attention to when allocating to altcoins/meme coins/low caps:

Q: In the last interview, you mentioned that FLOKI is your biggest meme coin holding. Is that still the case? What are some of your biggest meme coin holdings currently?

This is still the case: FLOKI remains my biggest meme coin holding.

I also have heavy exposure to the following meme coins:

And more recently, the market is choosing to go full r*tard, and I'm embracing it rather than fight it, so I now hold both Fartcoin and Butthole coin. as funny as that sounds! 😂

Q: In one of your most recent calls, you publicly called the Department of Government Efficiency (D.O.G.E) meme coin early before it rallied to $500M. How did you build conviction at an early stage, and what are some of the criteria you look at when selecting meme coins?

I first publicly called D.O.G.E around $9 million market cap, where I suggested not to fade it because Elon Musk is the greatest KOL alive and it's not even close!

To give you an idea of how much pull Elon has:

I've been here for several cycles and have made the majority of my wealth trading meme coins, and one of the most important lessons I've learned is to NEVER FADE ELON.

I mean just a week ago, a random meme coin pumped from sub $10m market cap to $400m market cap in 24 hours because Elon changed his name and profile picture to the Elon meme narrative that meme coin was created after.

The 'Department of Government Efficiency' narrative is probably the biggest meme coin narrative of this cycle, and one that Elon has been bullposting aggressively and will continue to.

The reason why the narrative is so big is because Elon thought it would be comical to have the acronym of a major US govt department be the same as that of his favorite meme coin Dogecoin. So he memed the idea of a Department of Government Efficiency (D.O.G.E) which Trump embraced and will now be launching.

This meme resulted in the birth of a new meme coin, 'Department of Government Efficiency', named after the actual department and narrative and it is currently one of the most undervalued meme coins in the space IMO.

I first called it at $9 million market cap, then it dipped to $6m market cap and i doubled down by buying more and telling people it is incredibly undervalued, then it rocketed to $500 million in a few weeks after Trump won and it was confirmed that the Department of Government Efficiency will be established. It is now sitting around $200m, after a cool down from the initial parabolic pump, and I think it is going much higher from here.

I pay attention to three key things when trying to build conviction in a meme coin, and these three things were why I felt that the Department of Government Efficiency meme coin will be such a winner so early on:

Q: Are you still bullish on D.O.G.E and why?

Yes, I'm still incredibly bullish on the Department of Government Efficiency / D.O.G.E meme coin because it is based on one of this cycle's greatest narratives and what I believe will be a strong narrative for the rest of the Trump administration.

And also for the reasons I highlighted above: it has strong narrative, community, and liquidity.

Elon Musk will literally be bullposting the narrative all cycle as the head of the Department of Government Efficiency. He also mentioned that there will be weekly 'Dogecasts' where they will promote transparency by talking about the activity of the department. This will create a lot of fodder for the mainstream media, citizen journalists, and literally everyone to start talking about the D.O.G.E department and narrative, and the irony of there being a meme coin named after it at incredible valuations, which will only increase its mindshare and help it send harder.

Q: In the last few months, you pointed out that "dino coins" had a strong run but meme coins are going to pump harder. Why do you think so?

Retail goes dormant into the bear market for a very long time until they hear about crypto still thriving years later.

Then they start gradually coming in and the first thing they rush to buy is the coins they are familiar with i.e. the DINO coins they bought last cycle. Eventually, they get more integrated into the ecosystem and learn that there are interesting meme coins that have outperformed all cycle, then they buy those as well.

Q: You mentioned in one of your posts that you think "this cycle will be different from others in some way." Could you elaborate on that?

 To be clear, when I say that I think this cycle will be different, I'm not trying to say that the bull run will not come to an end. It will!

I'm trying to say that a lot of people are underestimating how crazy things could get this cycle: For the very first time in crypto's 15-year history, we're going to have a US president that isn't just pro-crypto, but actually holds and uses crypto and is packing his cabinet with pro-crypto candidates and has promised to create a Strategic Bitcoin Reserve.

The implication of this is more than many realize: a strong message has been sent to the rest of the world about crypto and the effect of that is still yet to unfold IMO.

Then you can add to that the massive ETF flows and continued integration of crypto into the world's financial system.

This cycle will be a big one in a way that would greatly surprise many IMO.

Q: You highlight 3 verticals: meme coins, AI and RWA. With the recent hype over AI coins, what is your view on this narrative? And do you think it will outperform meme coins?

What's interesting is that I've seen many recently tweet about how meme coins are dead and AI is the only sector that will thrive this cycle, as if the recent AI trend is a new development.

I've been publicly highlighting the outperformance of the meme coin, AI, and RWA segments for around a year now and have said they would be the main narratives to watch this year. And that has so far played out!

So the recent outperformance of the AI agents aligns with what I've been saying since almost a year ago and is not, in fact, new and in due time, there will be a rotation back to meme coins and RWA later in the cycle and then rinse repeat.

Instead of thinking about which of the three verticals will outperform, why not have exposure to all three?

Q: You've held your BONK position throughout multiple large drawdowns. How did you deal with the volatility associated with meme coins, and how did you build the mental resilience to hold?

 I strongly believe that you cannot make generational wealth in crypto if you do not have the ability to stomach large drawdowns.

It is ironic that many want their coins to pump 1,000% but are then worried when it drops 90%. The same volatility that could allow a 90% drop is what allows you to enjoy a 1,000% pump. Realizing this has been a key learning experience for me!

I've traded hundreds of meme coins over the years, across cycles, and have seen how the most successful meme coins in history played out. In fact, I have had a lot of instances in which I purchased a meme coin and then sold due to impatience after a large and prolonged drawdown, only for the meme coin to rip hard after and go up thousands of Xs from where I sold... resulting in me losing generational wealth that would have easily netted me 8 figures each on several of my trades if I had held.

Meme coins by their very nature are incredibly volatile. All the most successful meme coins have a history of insane volatility: DOGE, SHIB, BONK, etc, all had their own periods of 99% drawdowns after their initial rallies.

So, it isn't unusual for a meme coin to experience a significant correction after its first few pumps.

The key thing is to have a thesis, and one that is as objective as possible, for any meme coin you're trading and then re-evaluate this thesis on a regular basis. If your thesis stands, then periods of sharp drawdowns should be opportunities to buy more or simply HODL.

Q: What are some of your biggest trading mistakes? What did you learn from it and how did you overcome it?

My biggest trading mistake is having a lack of conviction: I've had early entries into some of the world's biggest meme coins and altcoins in the early days, including meme coins like Shiba Inu for example, where I invested a few hundreds of dollars and sold for a few Xs what would have resulted in thousands of Xs and would be worth 8 figures at its peak.

My second biggest mistake is oversizing and overtrading: Many hear about my story and think about me as some god-tier trader because I turned $16k to $18,000,000+ on a single trade, but I make sure to emphasize repeatedly on my Twitter page that I make mistakes and I'm often wrong. One such mistake is oversizing and overtrading after a big win. This mistake has resulted in me losing seven figures from FOMO trading, be it on perps leverage or by buying the top of tokens that have pumped.

As a result, I have learned that sometimes the best thing to do is just sit on my hands and watch, especially when I feel the strongest urge to FOMO.

I've learnt that there is an overabundance of opportunities in this space and new opportunities will always come, so it is better to resist the urge to FOMO at all times no matter what.

Q: What are your strategies on taking profits? How do you deal with FOMO/greed when price continues to pump?

I simply give myself a target for my coins and take profit there. Sometimes this is a market cap target, at other times it is a sentiment target (e.g. what's the sentiment about this coin or the market as a whole at this time?)

For example, I intend to exit the majority of my positions this cycle once I think the market is in a stage of retail euphoria or mania, regardless of the price or market cap of the token.

I'm not too bothered about FOMO/greed when price continues to pump. That only bothers me when I sold due to a lack of conviction, but if I sold because a coin hits my target, then whatever happens after is none of my business.

Q: Besides your very televised BONK long on Bybit, how else do you use Bybit in your trading/investing strategy?

 I use Bybit for spot trading and perps trading of other cryptocurrencies as well, especially low caps.

Bybit has been pretty good at listing some of the hottest meme coins this cycle very early, especially on perps as a low cap, so this has made it one of my favorite exchanges for trading perps on low cap meme coins before Binance or other T1s list the meme coin.

Q: Finally, what are your predictions for the crypto market in 2025?

Enjoyed this interview? Get rewarded from a 5,000 USDT prize pool!

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Beginner

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'Bonk Guy' Was Right? Unipcs Reveals How to Catch 1000Xs on Meme Coins

Crypto

DeFi

GameFi

web3

Learn about how today's biggest GameFi projects change the way players are rewarded for gaming through fun play-to-earn crypto games.

Axie Infinity and similar GameFi projects and play-to-earn games are disrupting the traditional gaming industry as we know it. These play-to-earn crypto games are essentially blockchain-based monetizations of the gaming experience. What primarily differentiates them from traditional games is that players play to earn rewards rather than to win: think Monopoly, played for real cash.

Unsurprisingly, the ability to reward players for their time and effort is behind the rapid explosion in popularity of these play-to-earn games, commonly termed GameFi. Who wouldn’t love the idea of earning while having fun? In this article, we’ll take a deep dive into the world of GameFi games. We’ll also consider its origin, the various models for monetization and what to expect in the future. 

GameFi, one of the hottest buzzwords in the cryptoverse, is a portmanteau of “Game” and “Finance.” It describes the gamification of financial systems to create profit from playing play-to-earn crypto games. 

GameFi video game projects run on a blockchain’s distributed ledger, which enables players to have verifiable ownership of the virtual items in the game. In contrast to traditional gaming, where users play to win, GameFi projects adopt a play-to-earn model. 

The first instances of the GameFi concept include early Minecraft servers integrated with Bitcoin; Gambit.com; online games like Bombermine; and peer-to-peer services with which gamers monetize their online efforts.

 delivered at the World Blockchain Conference held in Wuzhen, China in November 2019, the founders of MixMarvel, a blockchain game studio, highlighted the possibilities of using blockchain technology to revolutionize the video gaming industry. 

However, the term “GameFi” was first used to describe this new trend by Yearn.finance founder 

. Since then, the term has been widely used to refer to video games embedded with blockchain-powered decentralized financial elements. These projects take advantage of the popularity of video games, combined with unique features of cryptocurrencies, to make GameFi a fascinating space.

Different GameFi projects typically have a few commonalities. In-game items such as avatars, land, costumes, weapons, gold, tokens and pets are represented as NFTs—non-fungible digital tokens that prove ownership of these digital objects. Game players acquire these items through game play, and can trade them on NFT marketplaces for profit or exchange them for cryptocurrencies — which can in turn be exchanged for fiat money.

Early GameFi titles used the Bitcoin blockchain, but the cost of transactions and the lack of speed prompted the adoption of the smart contract-enabled blockchain network, Ethereum.

Crypto game developers widely used Ethereum, and it’s still popular, but it has performance issues as well, due to limited block space. This vulnerability was highlighted when the viral popularity of CryptoKitties congested the Ethereum network in late 2017, causing Ethereum’s fees to skyrocket. 

Because of block space limitations on the Ethereum blockchain, transactions requiring faster settlement times incentivize miners to add these ahead of others through the included fee model. As demand outstrips the block space available, the transaction costs spike, pricing some users out. 

Of course, a game that requires exorbitant fees for in-game transactions will have difficulty gaining a significant user base. Faced with this problem, some crypto game developers moved from Ethereum’s base layer to faster networks. These large capacity networks include Solana, Polkadot, Polygon, Wax and 

GameFi projects have many levels to progress through. Players can increase earnings by dedicating time to improving their characters, monetizing their land assets by developing structures that other players pay to visit, or battling other players in tournaments. 

All data are stored on the decentralized public blockchain, which keeps track of what everyone owns. This means that players, not the game developers, own all of the assets. 

As a player, any in-game asset you acquire is yours for keeps, even if a server is turned off or the gaming company suffers technical downtime. This makes crypto gaming a source of actual income for players even as they’re being entertained. Some gamers even make a full-time income.

 concepts like staking, liquidity mining and yield farming are gaining a foothold in GameFi projects. These are all additional ways players can earn in-game passive income. Players can stake their in-game assets to earn annual interest and other rewards, which they can use to unlock new levels or to buy additional in-game items. At the same time, players can take out loans by collateralizing their game assets. 

Unlike traditional game development, which is centralized, GameFi projects may involve users in decision-making. Some games let players decide future game updates by giving stakeholder voting power to members of the GameFi 

 (Decentralized Autonomous Organization).

A DAO allows token holders to propose project updates and vote on them, making GameFi truly participatory. These proposals usually have a financial impact, such as members of the DAO voting to increase the reward for a particular in-game action.

What Is GameFi: Gamifying Your Crypto Earning Experience

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