Last week was an exciting week for crypto speculators. Cryptocurrency prices such as Bitcoin (BTC) and Ethereum (ETH) have risen by double digits. But looking at the long-term price chart, the situation becomes clearer. not so good.
A year ago, the inboxes of crypto journalists were flooded with funding announcement emails from DeFi start-ups and NFT projects. Each new story, from algorithmic stablecoins to yield farming platforms to land sales in the metaverse, was attracting hundreds of millions of dollars from venture capitalists.
Now, with fewer emails in our inboxes, it seems that new buzzwords alone can no longer drive a successful $10 million seed round.
But it’s not completely motionless. Some teams are attracting investors and crypto-related Twitter accounts even in the midst of the market downturn. Those teams generally seem to focus on more technical and infrastructure-focused efforts than past speculative lending platforms and glorious Web3 projects.
Let’s take a look at some of the key areas of technology investment on the Ethereum blockchain.
Zero knowledge and scaling
Zero-knowledge (ZK) technology continues to be one of the hottest sectors for investors. The technology is complex, but the concept itself is simple. Zero-knowledge proofs use advanced cryptographic techniques to make it possible to prove that something is real without conveying any other knowledge.
Zero-knowledge proofs are widely used in blockchain privacy, security, and scaling, but they also have applications beyond crypto assets.
Teams developing zero-knowledge technology for Ethereum Bloomberg include Scroll, Matter Labs, and Polygon, each a ZK roll to scale Ethereum using zero-knowledge proofs. up is being developed. ZK Rollup is expected to eventually become the primary way for people to access the Ethereum blockchain.
With the Ethereum blockchain moving to Proof of Stake (PoS), cryptocurrency miners, also known as “stakers,” can stake their own cryptocurrencies to help secure the network. A crypto asset validator who receives a reward in return has appeared.
One staking-focused company that continues to attract interest even as the cryptocurrency market is sluggish is EigenLayer.
Billed as a “universal marketplace for decentralized trust,” EigenLayer allows tokens locked up for Ethereum validation to be “re-staked.”
Similarly, Obol Labs recently announced that it has raised $12.5 million in Series A funding round to develop its decentralized validator technology (DVT). Obol Labs says its technology will allow validators to work more securely and in line with the idea of decentralizing crypto assets.
MEV (maximum extractable value)
MEV (Maximal Extractable Value) is a type of profit that can be earned by analyzing the Ethereum blockchain’s waiting pool of transactions (mempool) to find profitable transactions.
Initially thought to be detrimental to the ecosystem as those trying to optimize the MEV often used strategies that eclipsed other traders’ profits, companies such as Flashbots , working to spread the benefits of MEV to more participants.
As MEV acquisitions have become more equitable, they have continued to grow into a lucrative sector, and MEV-focused companies still attract attention and funding regardless of market conditions.
Flashbots have become popular since September when the Ethereum blockchain went PoS.
Today, 94% of blocks added to the blockchain come from Flashbots middleware MEV-Boost, which delivers MEV-optimized blocks to validators. Two months ago, Flashbots announced that it was developing a new blockchain, SUAVE, that would operate alongside other networks to provide a decentralized MEV marketplace.
｜Translation and editing: Akiko Yamaguchi, Takayuki Masuda
｜Original: What Ethereum Tech Trends Are Weathering the Bear Market?