Altcoin Rotation: DEXs and Buybacks in Focus

The altcoin market is inevitably heavily influenced by Bitcoin's price. If Bitcoin's price falls, there is always a risk that altcoins will also decline simultaneously.

When the narrative (story or expectation) of a specific altcoin weakens, its price tends to fall rapidly. It is analyzed that if the current lack of clarity in the Bitcoin spot ETF approval and related market continues, it could negatively impact the entire altcoin market. This is similar to the ripple effect in the stock market, where a decline in large stocks like SK Hynix affects the stock prices of related materials, components, and equipment (Soo-Boo-Jang) companies.

Backpack exchange, based on Solana, also emerged through stock tokenization, and cases of 급등하는 value of intermediary platforms like Raydium were observed.

It has been clearly confirmed that when new blockchain chains emerge and various assets are tokenized within them, the platforms mediating these transactions reap immense benefits.

The global trading volume of tokenized stocks has increased more than 30 times year-on-year. In this trend, Coinbase, a major cryptocurrency exchange, is pursuing a strategy to actively enter the stock tokenization market using its own Layer 2 blockchain, 'Base' chain.

From the moment Coinbase officially begins stock tokenization, key decentralized exchanges within the Base chain, Aerodrome and Uniswap, are expected to be the biggest beneficiaries.

This supports the hypothesis that Coinbase's 'All-in-one App' strategy will drive the tokenized stock market and induce broad ecosystem growth.

Currently, technology for borrowing stablecoins with stock as collateral is becoming visible, and lending platforms such as Morpho and Aave are expected to receive secondary benefits from this.

Furthermore, new financial products are becoming possible, such as separating dividend stock value and trading it at a discounted price through platforms like Pendle.

This is predicted to form a new blockchain-based financial structuring trend, starting with asset trading, moving to collateralized lending, and ultimately leading to various derivatives.

This amounts to an average daily transaction volume of approximately 2.6 trillion won, comparable to the trading volume of Upbit, a domestic cryptocurrency exchange.

Uniswap uses the profits generated from such massive trading volumes for token burning, which positively impacts token value appreciation.

Like the case where Solana rapidly emerged as the next player after the success of the Robinhood chain, the narrative of the cryptocurrency market constantly changes. Coinbase's Base chain is suggested as a potential successor to Solana.

Investors should continuously track these shifts in market narrative and practice connecting ideas to find the next leading asset.

However, its success will depend on market reactions after its launch.

In the past, Robinhood also initially gained attention as a memecoin before its value increased with the growth of the stock tokenization market.

As Circle's asset size grows, its stock price will naturally have to rise.

Circle was valued at $2.5 billion in its last investment round, but there are also concerns among retail investors regarding the shares pre-empted by institutional investors.

'Native' entrepreneurs, who have a high understanding of digital assets, possess a sense that they must distribute a certain amount of profit to consumers for a project's survival. They tend to share the profit structure with investors.

In contrast, entrepreneurs accustomed to traditional business models tend to approach the crypto market as merely a source of profit, like harvesting crops. Critics point out that this approach prioritizes corporate logic and can harm general investors.

Just as existing securities firms generate large profits from stock-backed loans in addition to trading fees, cryptocurrency exchanges are adopting similar business models. Major exchanges like Coinbase are implementing this model on a blockchain basis.

Platforms for lending stablecoins against Bitcoin or Ethereum are already active, and this is expected to become a new key revenue source for the crypto market.

If stock tokens are also included as collateral assets, the growth rate of the overall collateralized lending market is predicted to accelerate even further.

Furthermore, stock tokenization enhances trading convenience, transparency, and security, acting as an attractive incentive for investors.

Due to low labor costs, such as employee hiring, lending rates can be formed at less than 5%, which is a very favorable condition compared to traditional financial products.

Of course, it must be acknowledged that blockchain-based finance carries a relatively higher risk compared to traditional finance.

The presence of a buyback mechanism becomes a core criterion for selecting projects to protect investors and defend token prices.

Buybacks play a role in maintaining or increasing token value by reducing supply, serving as a crucial factor in providing confidence to investors.

The buyback mechanism works similarly to how iPhones are chosen by consumers due to their good resale value retention. A system that defends against product value depreciation is a key factor in gaining consumer trust.

If buybacks become the standard in the virtual asset market, it is expected to significantly contribute to mitigating drastic price fluctuations and enhancing overall market reliability.

If virtual assets are classified as securities, the current buyback structure could face legal risks.

Under the Trump administration, it is relatively likely to be maintained, but uncertainty could increase under subsequent administrations. Since there have been cases where projects that conducted dividend payouts or share buybacks were prosecuted by the SEC, continuous monitoring of changes in the regulatory environment is necessary.