1.1 Overview of industry development

In 2020, the outbreak of the global epidemic has led to the unprecedented impact on the economies of various countries. In this case, DeFi has emerged in the market and become the annual hot spot of the blockchain industry in 2020. In 2021, the DeFi boom is still continuing, and the vertical field represented by NFT is also beginning to make efforts, which gives the cryptocurrency field more attention and participation of traditional institutions and ordinary users.

Institutional investors in traditional finance will continue to enter the market. According to BlockResearch's 2021 investor survey, more institutional investors in the traditional financial sector say they will buy bitcoin in 2021, and the data shows that some traditional companies also want to legally own bitcoin through investment institutions. In 2020, we saw institutional investors in the traditional financial sector buying bitcoin in bulk in the market, leading to large fluctuations in the price of bitcoin. There is no doubt that this trend will continue in 2021, as Bitcoin has proved that it is the most profitable investment in any market right now. And continued institutional purchases will mean that bitcoin's market value will continue to grow.

With the launch of the Ethereum smart contract, the concept of DeFi, or the conceptof distributed finance, emerged in 2018. The significance of DeFi is that it has the ability to build financial scenarios through contracts. Through smart contracts, people can complete financial services without the participation of intermediaries, such as lending, stablectoin, token trading, derivatives trading, insurance, forecasting and so on. It presents a different financial service characteristics from before. For example, it has an immutable and transparent ledger, a non-human controlled contract, even the developer of the contract, the developer of the agreement, can not control the operation of the contract, this is a new financial ecology, there are many possibilities.

The DeFi market will continue to grow in 2024, with the entire cryptocurrency market exceeding $270 billion, 95% of which is accounted by Ethereum's DeFi ecosystem. At the beginning of the RPC, many investors disliked the DEFI market and compared it with the short-lived IC of 2017. Compared, and believe that the future of DEFI will face a collapse, however, there are still 1.7 billion people on the earth cannot use the traditional financial institutions continue to promote the development of the industry, DEFI is not speculation, is a real financial behavior, in 2021, DeFi will become a more mature financial market, may even become a part of the central financial. In addition, NFT is also trying out the possibilities in various fields.

The concept of NFT has since originated as a popular application CryptoKitties (Cryptographic cat), the NFT is Non-FungibleToken, meaning non-homogeneous tokens, is mainly issued by the ERC-721 standard. Simply understood, each NFT is a unique digital currency asset that can be circulated, traded and purchased. It has different values and attributes and is not interchangeable.

The process of generating an NFT is not complicated. At present, support pictures, audio, video, game items and other forms, file content is included in its metadata to generate a unique Token. In all forms, they are divided into art, collectibles, games, universe, sports and infrastructure. The difference is that content posted on social media on the Internet may be deleted or banned by the operating company or for other reasons. The NFT content posted on the blockchain can be permanently saved and is unique. NFT inherits the characteristics of blockchain, giving digital content uniqueness, immutable and persistence.

From perspective of the development process of NFT, it can be seen that the rise of NFT has given greater support to the industry. In addition, the popularity of DeFi and NFT also makes DAO, which has been quietly contributing the core value to the industry, supported by users.

With the development of information technology and the increasing complexity of theorganization itself, the employment relationship and management mode of traditional organizations are difficult to adapt to the complex and changeable environment and the requirements of the new generation of individuals for the organization. Decentralized autonomousorganization (decentralizedau-tonomousorganization, DAO) will decentralization, autonomy, autonomy and token economic incentives, the elements of the system as assets, make monetary capital, human capital and other elements capital full fusion, to better stimulate the organization efficiency and realize the value circulation, to solve the existing organization management problem provides a good idea.

The full name of DAO in blockchain is "Distributed Autonomous Organization" (DistributedAutonomousOrganization), which is a form of organizational structure based on blockchain. It can operate independently without intervention and management through some open and fair rules. These rules often come in the form of open source software, where anyone can buy a stake in the organization or by providing services. In a way, DAO is like a fully automatic robot. When all its programs are successful, it can start running according to the original rules. In the process of operation, it can also constantly maintain and upgrade according to the actual situation, and adapt to the surrounding environment through the continuous self-improvement mechanism.

The shape of a DAO varies widely, and it can be a digital currency, a system or an institution, or even a driverless car. Their valuable services to their customers can be currency transfers (such as Bitcoin), application platforms (such as ethereum), domain name management systems (such as domain name coins), or any other business model that is clearly more like a stock of a particular institution than a single currency. Each DAO has its own terms and conditions. Users will always have the right to view their own, disposable, DAO shares in the form of digital currency, and may be rewarded.