Original Authors: LD Capital, Duoduo

In September 2022, Ethereum transitioned from POW to POS, leading miners and communities to seek new POW tokens, giving rise to some new POW projects. After more than a year of development, in November 2023, the price of the new POW project Kaspa surged, with a market value exceeding 3 billion USD, entering the top thirty. With the impetus from Kaspa, the overall new POW tokens saw good price increases.

This report briefly analyzes the reasons for the rise of POW projects, takes stock of POW new projects with a market value exceeding 40 million, and discusses the current issues.

I. Reasons for the Rise of New POW Projects

First, with Ethereum's transition to POS in September 2022, a large amount of idle computing power emerged. This computing power sought new POW projects. Kaspa was launched during this period and quickly gained the support of this computing power. Some old POW token miners observed the new trend and gradually invested their computing power into new POW projects.

Second, there are some investors who prefer the POW model, believing that this model is the orthodox blockchain model, and they become early participants in the POW project community. The main participants are from Europe and the United States, and many Twitter bloggers have participated in early POW projects.

Third, new POW projects have lower market values, making them more friendly to newcomers entering this market. Newcomers are willing to buy a low-market-value project and wait for the overall market to improve. In contrast, old POW projects like BCH and LTC have higher market values and many trapped positions. As for Ethereum-based projects, due to a large number of VCs previously involved, their valuations are high, with newly listed tokens having market values in the hundreds of millions of USD, accompanied by long-term releases and selling pressure. Newcomers have less willingness to enter these projects.

Fourth, these projects combine new trends in their narratives. In addition to high performance and smart contract operation platforms, most are combined with concepts such as artificial intelligence and the Internet of Things, proposing the concept of "useful proof of work" to attract attention and funding.

Fifth, Kaspa was initially driven by miners and the community. By February 2023, it had gained significant attention in the POW project, and in March 2023, mining machine manufacturers introduced professional mining machines to increase mining power. With the entry of mining machine manufacturers, mining power surged, leading to a drop in KAS prices, but it later entered a sustained uptrend, eventually rising to the top thirty in market value.

With the success of KAS, it opened up the market value imagination space for new POW tokens, and fundamentally sound projects all saw good price increases in November.

II. Brief Introduction of New POW Projects

When POW projects are initially launched, their market values are usually only a few hundred thousand USD. After early community development, tokens are listed on small exchanges like Xeggex (referred to as "Egg Exchange" by the community). Egg Exchange has a large number of POW tokens with market values ranging from hundreds of thousands to millions. Early players mine here.

Once a POW project's market value reaches 5-10 million USD, it may enter second-tier exchanges like MEXC or Gate.io. After listing on second-tier exchanges, market values can grow to between 10 and 50 million USD. Larger market values require more funding and fundamental support.

Based on market value, KAS and TAO are in the top tier, with market values exceeding 1 billion USD and ranking within the top 50. In the second tier, with market values of over 100 million USD, there is only one project, QUBIC. This project has not yet been listed on any second-tier exchanges, and its actual trading volume is very low, so its price may be artificially inflated. The third tier consists of projects with market values between 10 million and 100 million USD. At the bottom are a large number of tokens with market values below 10 million USD.

The table below provides a brief summary of POW tokens with market values exceeding 40 million USD.

Source: LD Capital

III. Development Issues of New POW Projects

First, most projects are equivalent to L1 projects and are currently in the early development stage, having only built the architecture for mining and token issuance. As for business and ecology, most are still in the expansion stage. For example, KAS's smart contract platform is currently under development. ZEPH is a stablecoin, but its stablecoin currently has no use case. ATOR is a privacy routing network, but due to a rupture in cooperation with the Tor network, it needs to rebuild its user base.

Second, early-stage POW tokens with certain fundamentals and market values between 40 million and 100 million USD have generally experienced 5-10 times price increases. Short-term development expectations have already been factored in, and community funding strength has been depleted, leading to a period of consolidation. Tokens with market values below 10 million USD have not yet been listed on second-tier exchanges, with very low trading volumes, making them susceptible to manipulation and short-term price volatility.

Third, POW tokens also face token releases, with most tokens possibly releasing 30-40% of their supply in the first two years. These tokens are mainly held by large miners, and if they sell, the project's tokens will face significant declines.

Fourth, projects that specifically combine with AI businesses are more likely to attract funding. TAO and CLORE both combine the concepts of POW and AI. TAO is part of the AI algorithm model market, where developers from around the world provide AI algorithm models, forming an AI algorithm model market; users choose the algorithm models they need. The higher the rating and usage of a model, the more incentives the developer will receive. CLORE is an AI computing power leasing platform, equipped with nearly 6,000 high-end NVIDIA GPU chips available for rent for mining, rendering, AI training, etc. Providers of high-performance chips for the network will receive CLORE token incentives.

IV. Conclusion

It is evident that the revival of POW projects is the result of concerted efforts from multiple parties. Essentially, miners seek new POW projects, communities seek projects with low market values and good narratives, and mining machine manufacturers seek projects that can gain community support. At the same time, the rise of AI has elevated computing power to the level of basic infrastructure in the data era, and POW projects inherently possess computing power, making them easily combinable with AI, resulting in a secondary narrative overlay.

However, there are a large number of mixed-quality POW projects, requiring investigation and understanding of project narratives, business, teams, and communities, as well as consideration of their probability of sustainable development and obtaining large-scale funding support.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。