Bear Market Update: DeFi 2.0 has dropped by 99%, will the Solana ecosystem continue to decline? Platform tokens prove to be the most resilient amidst the fall.

Jason Choi, former partner at venture capital firm Spartan Group, analyzes the current bear market in the cryptocurrency market, noting that protocol tokens within the ATOM ecosystem seem to be more resilient to the downturn. He also points out that platform tokens appear to be a good investment target during the bear market.

The following content is compiled from Jason Choi's Twitter and is not investment advice. For the full content and discussion, please refer to the original tweet link: https://twitter.com/mrjasonchoi/status/1533157547204833280

1. Most Painful Trades: Holding DeFi Tokens

DeFi has been the most painful trade in the past year. From the perspective of decentralized exchange DEX's vertical market, DeFi has experienced the longest bear market, with an average of over 400 days since hitting its all-time high, compared to Bitcoin's 207 days.

The silver lining: prices are starting to look attractive.

2. DeFi 2.0 Drops Even Harder

DeFi 2.0 has seen the most severe drop from its all-time high in almost all cryptocurrency subsectors, with an average drop of -98.58%, where sharp rises are also accompanied by steep declines.

3. Long on Platform Tokens?

Jason Choi suggests that going long on platform tokens and shorting DEX tokens might be a good trade:

CEX tokens are among the most resilient tokens in the cryptocurrency investment field, possibly due to their "buyback, burn mechanism" further linking token value to the exchange's actual revenue.

4. About Public Chains

As L1 remains one of the most liquid and defensive assets, major protocols seem to still carry weight, with no mainstream L1 experiencing a drop of over 90% except for MINA.

5. Bearish Outlook on Solana Ecosystem

Protocol tokens in the Solana ecosystem have dropped an average of 94%. Jason Choi further points out that these tokens still have low circulation, resulting in a high FDV, and most protocols are dominated by venture capital funding, which may lead to more painful drops.

6. Resilience in the ATOM Ecosystem?

While protocol tokens in the ATOM ecosystem have also experienced drops, their prices seem to have a certain degree of resilience compared to most L1 ecosystem tokens.

Jason Choi suggests that projects should consider reducing the involvement of venture capital institutions, but the results of this recommendation have yet to be substantiated and warrant further investigation.