Primary Market Watch: New Trends in Derivatives, Ton, Gaming, and ZK
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Primary Market Watch: New Trends in Derivatives, Ton, Gaming, and ZK
RWA, continuous experimentation in Web2.5 gaming, the ongoing evolution of DeFi and NFTs, and fresh explorations at the intersection of AI and crypto... eventually, a few truly useful use cases will emerge.
Navigating Web3 tides with focused insightsAuthor: Lao Bai, Research Partner at ABCDE
This article focuses on recent market observations from the primary market over the past two months, mainly in the areas of derivatives, Ton, gaming, and ZK—relatively hot sectors lately. You’ve probably read plenty of 2049-style long reads by now; most are neutral with a slightly pessimistic tone—VCs and project teams are running out of cash, breakout applications remain scarce, etc. All valid points. Over the past two months, we've clearly seen fewer projects emerging in the primary market. Whereas previously we were talking to around 20 projects per week, that number has dropped to about 10. When a promising project appears, every VC is fighting for it—a true “too many wolves, too little meat” scenario. As for the secondary market? Well, no need to even go there…
Still, I want to end on an optimistic note. Let’s cover the main topics first.
1. Derivatives
Over the past few months, aside from occasional appearances from Aptos and Sui, we’ve barely seen any new spot DEX or lending projects launching on other blockchains. Nearly all new projects are focused on on-chain derivatives—mostly futures, a few options.
The biggest trend in the derivatives space is this: they’re becoming increasingly CEX-like:
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Email registration (via MPC wallet tech);
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Support for trading numerous assets;
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Off-chain high-speed order books;
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KYC support, trading rebates, VIP gold cards, etc.
Overall, the trading experience of on-chain derivatives is rapidly approaching that of centralized exchanges—speed, asset selection, you name it. Self-custodial wallets offer greater security, permissionless listing enables faster deployment of trading pairs, and retail users can act as LPs taking the opposite side of traders (several projects are already working on neutral hedging strategies to mitigate the risk of LPs losing heavily when traders profit significantly, as seen with GLP). Logically speaking, given sufficient liquidity and market makers, the overall user experience of on-chain derivatives could surpass that of CEXs within the next 1–2 years.
Of course, user behavior and habits won’t shift overnight. Binance and OKX have solid reputations and excellent derivative offerings. Without the FTX collapse, on-chain derivatives might still be getting trounced. Now, at least, we can see a potential bull run on the horizon.
By the way, what about Friend.Tech? Anyone else think this model might work better for on-chain derivatives? Imagine a top-tier on-chain derivatives platform allowing KYC’d traders (using Twitter-based KYC like FT) to issue their own shares. Each month, 10% of a trader’s profits could be automatically distributed via smart contract to all share holders. Since trader performance fluctuates—huge wins one month, heavy losses the next—the share price would swing dramatically. One month you hold shares and rake in big dividends, causing demand (and share count) to spike; the next month, losses trigger mass sell-offs. This kind of "virtual trading" without counterparties seems tailor-made for Friend.Tech's model.
There are many possible variations: introduce scarcity by initially limiting shares to the top 100 traders on the leaderboard. Boost trading volume by requiring buyers to complete $1,000+ in futures trading. Technical and economic mechanisms could address edge cases—what if a trader suddenly switches addresses or stops trading altogether? Why would traders give up part of their profits? For fame, to monetize future earnings early (issuers could tax share transactions), or simply for fun. For buyers, it offers a way to profit from good judgment with small capital, potentially earning far more than trading directly.
2. Ton
Ton has been trending recently, and many are excited about its 800 million monthly active users as a potential foundation—especially with the launch of the official Ton Space wallet this month, which feels like a milestone. But here’s my take: in the short term, Ton’s ecosystem may be slightly overhyped.
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First, the current surge in Ton activity was driven by bots, whose users are largely Web3 crypto degens rather than traditional Telegram users from Web2.
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Second, Ton’s official wallet has actually existed for a year—it was just custodial. The new Ton Space version is self-custodial. So this upgrade makes the wallet more decentralized, but it’s not a sudden “from zero to one” breakthrough as many assume.
We’ve spoken with multiple projects and foundations in the Ton ecosystem, and so far, nothing truly “exciting” has emerged. The DeFi landscape mostly consists of clones of Uniswap, Lido, etc. Will platform-level applications like WeChat-style red packets or tipping, which failed to gain traction under the old custodial model, suddenly succeed with self-custodial Ton Space? I’m skeptical.
That said, with 800 million MAUs on Telegram, Ton remains a blockchain worth watching closely. Its technical architecture resembles ICP—not Ethereum’s fully decentralized global consensus where all nodes compute everything, but rather a semi-centralized, performance-optimized “local consensus” prioritizing speed and UX. Given this, we believe Ton’s growth won’t come from replicating traditional DeFi stacks like DEXs and lending protocols, but through payments, bots, social apps, and games. If you’re building in these areas on Ton, feel free to reach out.
3. Gaming
The blockchain gaming space is currently divided into two camps.
One is Web2.5; the other is fully on-chain games.
Web2.5 games are evolving to resemble traditional Web2 titles. The crude, low-playability generation of GameFi like Axie Infinity has vanished. New Web2.5 games now rival mainstream Web2 games in gameplay quality, with Web3 elements fading into the background—they primarily target Web2 gamers. Only after players enjoy the game and become curious about in-game items do wallets, NFTs, and tokenomics enter the picture.
So today’s new Web2.5 games aren’t trying to balance “play” and “earn”—they’re focused on delivering an exceptional, near-Web2 (or even AAA-grade) gameplay experience, sprinkling in Web3 features as differentiators. Many launch directly on mobile rather than PC. Teams often feature all-star lineups: ex-Tencent TiMi, NetEase, miHoYo veterans plus 1–2 crypto OGs. Recently, I even met the founder of a legendary game IP (not the MMORPG “Legend”) who’s now on his “nth” Web3 startup. While it’s unclear whether the Web2.5 path will succeed, it’s undeniable that more top talent and capital are flooding into this space.
As for fully on-chain games, the question isn’t whether they’ll work—it’s almost certain they will—but how long it will take. Our team recently tested several on-chain games and concluded: “interesting, but unsatisfying; easy to pick up, but not truly fun.” Fully on-chain games may still need another full market cycle before they’re genuinely “fun”.
4. ZK
ZK hype is no longer centered on zk-Rollups, but on two emerging application types.
One is the coprocessor concept, exemplified by Axiom—also known as storage proofs—with competitors including Lagrange, HyperOracle, and Herodotus. To explain coprocessors simply, I love Celer’s Dr. Mo Dong’s analogy: “giving smart contracts the power of Dune Analytics” (side note: Celer is entering this space too).
The other category involves general-purpose ZK computation and verification, targeting not only Web3 users but also Web2 audiences. Architectures vary: WASM-based, LLVM-based, Mips-based, and Risc0 (RISC-V based). Proof systems like Plonky2, Plonky3, Nova, and SuperNova are all in play. These projects currently face a lack of clear use cases, but from a long-term, first-principles perspective—especially regarding blockchain’s core value of “trustlessness”—general-purpose ZK computing holds great promise. If the internet’s first principle is “eliminating spatial distance,” then blockchain’s is “removing trust.” Bitcoin and Ethereum eliminate trust in on-chain computation via full-node validation. General-purpose ZK can extend this to off-chain computations—verifying any traditional computing process on-chain. What new computing paradigms or applications will emerge once this matures? We don’t know yet. It’s a journey of discovery.
5. Final Thoughts
Let me end on an optimistic note. Yes, both primary and secondary markets are icy right now, but the industry’s vitality remains strong.
Technologically, beyond mature blockchain infrastructures, we now have ZK—advancing and aligning perfectly with blockchain’s foundational principle of “trustlessness.” ZK tech is evolving rapidly, advancing at a pace comparable to AI.
From an application standpoint, we have fully on-chain games—a path that will eventually succeed, given time. Ongoing experiments in RWA, Web2.5 gaming, continuous evolution of DeFi and NFTs, novel explorations in AI + Crypto, and payment potential in emerging markets—all suggest that a few truly useful applications will eventually emerge.
Talent-wise, blockchain founders include an unusually high proportion of top-tier university graduates. Roughly half the project founders I speak with are from Harvard, Yale, Oxford, or Cambridge. In China, it’s almost exclusively Tsinghua and Peking University alumni, occasionally Zhejiang or Xiamen University. In short, the world’s brightest young minds are either building AI or Web3. That legendary game IP founder jumping into Web3 again? Pessimists might say he’s fleeing cutthroat Web2 competition. But I see it optimistically: Web3 is still a “Wild West,” a frontier where talented individuals can truly unleash their potential.
So why be pessimistic? Just build!
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Lao Bai
