Diamond Hands and Public Chain Project Analysis from the Perspective of Amber Group Analysts - Part One

Amber Group analyst Lao Bai @Wuhuoqiu shared on Twitter his insights on the Diamond Hand project and ongoing updates on potential public chain projects. Lao Bai's views from mid-December to present are as follows: Disclaimer: Not investment advice, for informational purposes only

Note: Diamond Hand refers to holding long-term without fear of volatility and risk

Non-BTC/ETH Diamond Hands Series

Lao Bai's Statement

1. Diamond hands, for me personally, does not mean buying at the current price without regard and holding until death. It is more likely to buy on dips over the next 1-2 years or even longer periods, and sell some positions on highs, while keeping a core position, lightly scalping, and so on.
2. Due to personal cognitive limitations, it may not always be correct.
3. Not investment advice, for reference only.

Chainlink LINK Post on 12/13

Lao Bai believes that if it were last year or the first half of this year, the choice might have been BNB or UNI. Because the leading position of centralized exchanges (CEX) and decentralized exchanges (DEX) in the industry is unquestionable. However, at the end of 2021, Lao Bai's top choice switched to LINK. The main reason is that BNB already has a high market value with limited upside potential; UNI has not yet found the ability to add value and its coin price remains low. While DEX/CEX are important, they are not the only options, but Chainlink cannot be replaced, just like in the Web 2 era, where you cannot be without Google.

He believes that even though Chainlink has experienced a diamond hands breakout before, with the coin price significantly growing, it has also experienced a substantial decline compared to ETH, falling 10 times from its peak, creating another opportunity.

Lao Bai thinks that Chainlink's fundamentals are still very robust, with many projects lining up to integrate. Recently, due to security incidents on Solana, where Mango Market had price errors due to using other oracles, leading to abnormal liquidation, and Anchor Protocol faced similar issues due to oracle failures, they immediately proposed switching to Chainlink. Such security incidents will continue to strengthen Chainlink.

The release of Chainlink's Whitepaper 2.0 this year is another highlight that Lao Bai is optimistic about. The following points are what he believes are the highlights of Chainlink's aggressive business expansion:

• VRF Random Numbers: Generating verifiable random numbers using on-chain cryptographic proof mechanisms, which will be increasingly needed for projects like Gamfi, NFTs, for rare attribute NFTs. For example, Axie Infinity uses Chainlink's VRF service.
• Off-chain computation: This is a blockchain scalability solution that some projects are exploring, such as CTSI, Truebit, and more. He believes that besides sharding and rollups, off-chain computation is likely to be the third option for blockchain scalability, with Chainlink being the best choice.
• Automatic maintenance of smart contract-triggered liquidations with Keepers service similar to KP3R: Already online; DID service decentralized identity is also planned in the whitepaper. Lao Bai states that Chainlink is naturally suited for cross-chain operations, and their cross-chain service CCIP is also a strong business venture.

He adds that currently, Chainlink's direct competitor in cross-chain operations is Cosmos's IBC protocol. However, IBC had issues with Ethereum's EVM compatibility in the past, only suitable for chains developed using Cosmos SDK, leaning towards in-chain ecosystems. Now, with the emergence of LayerZero, as a complementary project to IBC, it helps deploy IBC on EVM blockchains.

He is looking forward to the competition between CCIP and IBC+LayerZero.

ArweaveAR Post on 12/16

When it comes to decentralized storage projects, people often compare FilecoinFIL and ArweaveAR. Lao Bai points out that while Filecoin was still storing a lot of junk data, AR had quietly collaborated with multiple blockchains and dApps. After the NFT boom, many NFT files were also stored on Arweave.

Lao Bai summarizes the technical and conceptual fundamentals of Arweave:

• Technical – Compared to Filecoin's extremely complex Proof of Replication PoRe+ and Proof of Space-Time POTS, AR's Proof of Access PoA is a simple and elegant solution. Miners storing scarce block regions significantly increase the chances of POW block generation. This probability-driven incentive ensures high data replicability, making the possibility of a block being discarded by the network almost zero.
• Conceptual – Just as CPUs follow Moore's Law, storage costs also decrease annually, leading to the counterintuitive "pay once, store forever" model based on mathematical formulas. Developers and project owners would prefer to pay once for storage rather than continuously pay.

Furthermore, Lao Bai believes that in addition to being a decentralized cloud storage for NFTs and other documents, Arweave's future includes "chain state storage" and "development based on AR as the underlying technology."

"Chain State Storage" – Lao Bai explains, "This is mainly done by the Arweave-based project Kyve, which has cooperated with many public chains like Near to store historical blockchain state snapshots on Arweave. This has many advantages, such as exponentially increasing the sync speed when new nodes join and providing blockchain data query interfaces during synchronization. When you need to query historical blockchain states, take Ethereum for example, while full nodes have all transaction data, they only retain recent block states (e.g., what tokens an address has at a certain block height). On Ethereum, if you want to query historical block states, you need to rely on archival nodes (data 10TB+)."

He adds that Ethereum has few archival nodes and slow speeds. Therefore, besides core projects like Etherscan, few would invest in building an archival node. This is where Arweave can play a crucial role, as with the increasing block data, more chains will continuously store state snapshots on Arweave through projects similar to Kyve.

"Development based on AR as the underlying technology" – Lao Bai mentions that Arweave not only provides storage but also offers a smart contract platform. Currently, there are DEXs similar to Uniswap built on Arweave, and perhaps in the future, there will be more dApps of this nature based on decentralized storage.

Lao Bai believes that true Web 3.0 will not only store transactions and final account balances; the infrastructure in recent years has been computation-driven, but it may gradually shift towards storage to meet the ever-expanding or infinite state requirements.

For more details, he recommends reading: "Arweave's potential is to revive the Library of Alexandria, not to replace Filecoin"

Render Token RNDR Post on 12/17

Lao Bai emphasizes that the following points are based on arguments from his friend:

• Render Token's founder Jules Urbach is a long-term thinker. Before Satoshi Nakamoto released the Bitcoin whitepaper in 2009, he had been writing online about his ideas for a distributed rendering network, gradually turning his ideas into reality. In 2009, Jules Urbach's team established OTOY, making him an expert in the field, leading to his company becoming a top rendering company in 2016. Starting from 2017, they combined blockchain technology to create RNDR, which has now become a leader in the field.
• Google shut down its Zync Render cloud rendering platform in the past two years and joined Jules's RNDR rendering network. Microsoft also joined RNDR last year, and big companies like Unity, HBO, Disney are partners.
• The metaverse is expected to have the highest computational requirements in human history in the next 5-10 years, and RNDR network was created from the beginning to meet these demands. Next month, RNDR will release its latest roadmap and token economics. According to current data, RNDR's ambition is to become an all-in-one platform for NFTs and 3D content creation, trading, and verification.
• In the future metaverse, holographic displays are essential, and RNDR has accumulated enough technology and experience in holographic displays. Therefore, there is a high probability of dominating this field.

The next part will analyze public chain projects.