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# System prepended metadata

title: 'Crypto Market and Infrastructure: Status quo & Quo vadis'

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(Note: These notes go with the slides here: https://docs.google.com/presentation/d/18Prdq6g9vCk88UvDeDzJjbB1GQ7Mys-ajV54y1YG3WU/edit#slide=id.g22b13a3a611_0_182)

### Intro slides

Founder of Li.Fi
Philipp Zentner

"Multi-Chain Liquidity Middleware"

### What's the Data saying?

Assets <500 mn not touchable, compared to S&P 500
We only have 75 - 76 on crypto with that market cap
[That's still over 35 billion]

ZkEVM

Multi chain thesis
Value flows changing
Gas price changes

### Wen TradFi

Trad fi is not coming in to crypto due to speed of execution; market makers are used to treading at nanoseconds scale vs. seconds or even minutes
Speed of excecution solved by: L2, L3, zk-tech 
[optimistic rollup is centralized]
Liquidity Depth is Chicken Egg problem (this will come in from TradFi; possibly via trading pairs of ETH and BTC)
MEV: Mempool-Innovation & Intent based systems
MEV helps foster decentralization by encouraging ppl to host their own nodes
Cowswap DEX aggregator - batched transactions, vs. intent-based systems
Intent-based system synonymous with limit order
But the system we use now is preference based: We use Uniswap

Depending on if sophisticated market makers develop
Will we see market makers adopt complex multi chain transactions

Trading of real world assets

Market will heavily fragment and head in these directions and DeFi will be very exciting

Flashbots - most prominent MEV research organization (SUAVE - https://writings.flashbots.net/the-future-of-mev-is-suave/)

### App Infrastructure cycles

What comes first? The app or the infrastructure to power that App?
Broadcast internet happened before YouTube, but it failed due to lack of appropriately robust infrastructure
Then infrastructure innovated and drove demand for YouTube
Further example: When the light bulb was invented, there was no electrical grid

Orderbook DEXs started, but failed 

TradFi wants an orderbook system

Centralized backends are in demand again

our API is so computationally heavy, it cannot be done on chain

CI/CD and tooling as well as scaling is simply not there, so we need to live with a centralized API for now

Eigenlayer: ETH changed from POW to POS

So many server requests, we are positioned to survive this app-infrastructure cycle

### How about UX today?

Oderbook/limit order: Cowswap, 1inch

Many order book DEXes launching on L2s

UX has changed a lot over the past two years(!)

### Account Abstraction

EIP 4337 - CA is starting to replace EOAs
https://eips.ethereum.org/EIPS/eip-4337

Users don't have to understand the blockchain anymore
Security, Atomicity, Automations

Ethereum is always catching up because they are behind due to how they make changes; others are now more ahead

### Bridge Ecosystem Snapshot 

100s of bridges
Liquidity fragmentation - locked capital across bridges, wrapped bridge assets
Developer Overhead
Single Point of Failure - access to two liquidity pools
Bad User Experience

See: Bridge routes community worksheet

Trust assumptions need to be reduced

AMBs raised so much money because they have the ability to be responsible for whole ecosystems and assets and the switching costs are so high, this drives up their valuations

LayerZero and Axelars have very different trust assumptions

Bridging NFTs creates secondary markets

Interoperability Trilemma:
Trustlessness
Extensibility
Generalizability

### Why Bridge Aggregation

Connext and Hop are the most ethical 

Jumper.exchange will give you a bunch of routes

Exhaustive risk framework toolkit in collaboration with ConsenSys

### LI.FI Security Standards 

(no notes, see slides)

### Why Aggregation Inherently Mitigates Bridge Risk

(No notes; see slides)