A Look at the 2022 Bear Market, the FTX Incident, and Encryption Innovations from the Perspective of an Old Sucker

Recently, Cobo co-founder and CEO Shen Yu accepted an exclusive interview with a blockchain media platform in Singapore. As an "old sucker" who has experienced multiple rounds of cryptocurrency cycles, Shen Yu shared his views and in-depth thoughts on various topics including the current market, the impact of the FTX incident, DeFi innovations, and the future of DEX, and explained his reasons for maintaining curiosity about the Crypto industry.

View on the Current Bear Market Cycle

Shen Yu believes that the despair level of the Bear Market in 2022 is not as deep as in the past. The industry has developed for more than 10 years, accumulating a wealth of experience and lessons. We have basically figured out what the current blockchain technology can and cannot do. Solutions for scaling around modular blockchain and layer-two networks have also begun to emerge. Although it will take another 2-3 years for final implementation, the light of hope is already visible.

Compared to previous cycles, confidence and direction for the future of the industry are clearer. Although some individuals have suffered significant losses due to events like FTX, overall awareness of the industry's prospects is more defined than in the past.

Views on the FTX Incident

The divine fish stated that Sam is a person who is extremely focused on capital utilization and profits, not allowing funds to remain idle for long periods. In the early days, Sam transferred part of his assets from the exchange for low-risk investments. As his confidence grew, his risk appetite gradually increased, ultimately leading to uncontrollable risks.

The encryption industry is still in its early stages, with infrastructure and regulation being inadequate, leading centralized exchanges to bear too many responsibilities. For entrepreneurs, it is difficult to resist the temptations of human nature when faced with such a large scale of user assets. Similar incidents have occurred frequently in history; the essence is a human nature issue, only the scale and whether it is exposed or not are the questions.

In the future, such events may be avoided through technological means. The essence of blockchain is to allow everyone to control their assets by managing their private keys. With technological advancements and improvements in infrastructure, this issue will gradually be resolved.

Cobo's Mission

Since its inception, Cobo has focused on how to securely manage private keys, as well as related security and risk control. In the future, it will productize the experience and internal tools accumulated in DeFi asset management to provide users with access. Cobo does not want to become a centralized black box, but rather hopes to offer users a more convenient, secure, and user-friendly blockchain interaction solution.

DeFi Innovation Space

The divine fish believes that the underlying financial framework of DeFi is relatively mature, but there is still significant room for financial innovation in terms of composability. Currently, DeFi mainly includes four major modules: stablecoins, DEX, lending, and derivatives, each with varying levels of development. In the future, the core modules of DeFi may become standard protocols on the chain, allowing other applications such as NFTs and GameFi to call them directly. There is still room for innovation in cutting-edge applications and risk balancing.

The Future of Centralized Exchanges

The FTX incident marks the twilight of centralized exchanges. Many institutional users have deeply recognized the industry issues, leading to a significant transfer of assets from exchanges to on-chain wallets. In the future, a model combining decentralization and centralization may emerge to mitigate risks. Some long-tail demands may be more efficiently addressed directly in a decentralized environment.

Outlook of the Mining Industry

Shenyu believes that the ideal state of mining is for a large number of small and medium-sized mining farms to connect to the global power grid, some used for regulating the grid status, some for energy thermal exchange, and some becoming fixed-income products for traditional financial institutions. In the future, there may be a return to decentralization, and household mining profits may be higher, even allowing for additional income through connection to the power grid.

Reasons to Maintain Enthusiasm in the Industry

The divine fish stated that the Crypto industry evolves rapidly, filled with innovation and interesting things, constantly inspiring the motivation to learn. In this industry, one experiences and creates history every day, and the thinking and learning lead to rapid growth, making it difficult to leave this attractive field.