Original text: Unchained; Compiled by: Yuliya, PANews

In this year of 2024, which is full of challenges and opportunities, encryption The currency market has experienced ups and downs in its development. At the end of the year, the Chopping Block program invited four industry Dragonfly managing partners Haseeb Qureshi, Dragonfly general partner Tom Schmidt, Superstate CEO Robert Leshner, and Robot Ventures managing partner Tarun Chitra to review the key moments of the year. PANews has compiled the text of this podcast.

The biggest winner

Haseeb:

I think the biggest winner this year is HyperLiquid. This decentralized perpetual contract trading platform conducted the most successful token airdrop of the season, which can be called the 'Uniswap moment' of this cycle. Although it still has a long way to go in terms of true decentralization, its token distribution method and community response are exciting. As a VC, we really regret not being able to participate - in fact, almost all VCs tried to invest in HyperLiquid, but they were all declined. This 'perfectly born' project is truly impressive, especially in terms of product capabilities, execution and technical delivery.

Robert:

"From my perspective, the biggest winner this year is all Cryptocurrency founders and companies in the United States. We have witnessed an important turning point: from the extreme hostility and resistance we faced before, to the positive situation we are now seeing. As an American cryptocurrency founder, this transformation is very exciting. Be excited. Finally, you no longer have to worry about pursuing a career in cryptocurrency in the United States."

Tarun:

"I want to choose the entire field of DeFi (decentralized finance). Remember the previous prediction of Degen Spartan Is it a 36-month bear market? DeFi was once regarded as a problem child in the cryptocurrency world, and the valuations of public chains that have not yet been launched are often ten times that of DeFi projects. But now, DeFi is actually.Made a strong comeback. As someone who works hard in the DeFi field, it is indeed gratifying to see such development. "

Tom:

My pick might be a little surprising - it's Tether (USDT). They've had a fantastic year and are arguably one of the most profitable companies in the world. A lot of people have been waiting for Tether to fall or emerge for years Big problem, but the opposite is true, it is becoming more and more successful and more formalized. Tether not only continues to grow, but also becomes an important case in the cryptocurrency industry, especially in terms of stablecoin applications and the global dollarization trend.

The Biggest Loser

Robert:

There is no doubt that the anti-encryption camp is the biggest loser this year, including some members of both houses of Congress and some members of the executive branch. People, especially some members of the SEC and those pushing for Operation Broken Chain 2.0, mistakenly believed that suppressing the cryptocurrency industry would advance their careers, but it turns out that this is a completely failed strategy. I hope this can change. The future landscape will allow cryptocurrencies to Suppression is no longer a viable option

Tarun:

I would say this year. The biggest losers are the many second-tier layers 2. Projects and application chains. At the beginning of 2023, the market generally believed that there would be thousands of L2 projects, and each L2 technology stack would derive a large number of application chains for specific purposes. But reality has proved that this idea is completely wrong. Look at the Cosmos ecosystem. Just look at the continued turmoil. Previously, people thought that successful applications like Blur could launch their own application chains or L2s, such as Blast, but the actual effect is not ideal. On the contrary, we see that users tend to concentrate on a few top L2s. on the project.

Haseeb:

I think financial nihilism is the biggest loser this year. In the first half of this year, the view that everything in cryptocurrency is Meme coins and all technology is meaningless was once popular. But the reality is that Meme currency transaction volume The proportion of total transaction volume has dropped significantly from 20-30% in the early days to 10% or even lower now. If you think about all technologies, the market has shown more enthusiasm and confidence in real technological innovation and substantive progress. are worthless, then youA big loser indeed this year.

Tom:

I would say the biggest losers are those who gave up on crypto this year People who switch to artificial intelligence. It's a classic case of 'game over and we're back'. When asset prices fall, investors leave, developers switch careers, and market sentiment becomes extremely negative, cryptocurrencies always come back in different ways. I personally know a lot of people who have either dumped cryptocurrencies, closed their companies, or moved on to other areas of employment. It's a shame because in this field you really need a strong belief to succeed. Those who lacked this belief and turned to AI may now regret it.

The biggest surprise

Tarun:

Undoubtedly, the thing that surprised me the most this year was Pump .fun and BonkBot are two projects. I remember we discussed Pump.fun on the show in January and February this year. At that time, it was just starting out and provided users with an innovative way to create assets. I don’t think meme coins would have developed as quickly without Pump.fun. The other is BonkBot, a Telegram robot that focuses on meme currency trading. In terms of revenue, BonkBot can be called the hidden champion. Like Pump.fun, both companies achieved $100 million in revenue in their first year. The speed at which meme coin infrastructure is developing really blows my mind.

Tom:

The surprise I want to share has two aspects. First there was the launch of World Liberty Financial, it was truly incredible to see a presidential candidate being associated with a DeFi token and Trump holding the wallet. But even more surprising was its sales performance. It stands to reason that ordinary meme coins or NFTs can be sold out in a short period of time, but this DeFi token related to the president has only sold 25%, and sales continue to decline. Both of these points were far beyond my expectations.

In addition, I would like to add something to the point mentioned by Tarun. I predicted as early as early 2024 that the application layer would generate a lot of revenue. For example, Photon, Banana Gun and even Uniswap, the revenue of these applications has reached hundreds of millions of dollars, exceeding most DeFi protocols. While I didn’t predict meme coin infrastructure specifically,The app has indeed performed well, surpassing many protocols in terms of revenue and profitability.

Haseeb:

My two biggest surprises are: First, "Tap to earn "The rise of the (click-to-earn) model is surprising, although there is almost no news now. For example, the game Hamster Combat even attracted the attention of the military in Iran. Second, there have been no major cryptocurrency security incidents (L1/DeFi) this year, indicating a significant improvement in industry security. Although TVL (Total Locked Volume) has recovered significantly, we are not seeing the huge losses seen in previous years, which is a positive sign.

Robert:

What I would like to add are changes at the infrastructure level. The rise of Solana and Base as meme coin infrastructure has been surprising. Due to their low transaction fees and convenient token issuance mechanism, these two platforms have performed well in terms of new user activity, and their adoption speed and scale have exceeded expectations.

The best new mechanism

Tom:

I think it must be Pump’s binding curve and LP locking mechanism. I'm excited to be the first to speak because I have a feeling this will be a popular choice.

Robert: I think the best mechanism is the "revenue amplification" model, which can be seen in many stablecoin projects such as Ethena and Usual. Its core is to allocate the income generated by a certain underlying asset (which can be any asset such as arbitrage trading, treasury bonds, etc.) to only a part of the users, thereby significantly amplifying the rate of return. For example, if the annualized rate of return of the underlying strategy is 5%, when only a quarter of the users participate in the allocation, the actual rate of return obtained by these users will be magnified to 20%. This mechanism has played an important role in the development of Ethena, and I believe we will see more projects adopt similar mechanisms in the coming months.

Tarun:

From my perspective, there are two mechanics that stand out this year Innovation. The first is the liquidity guidance mechanism of meme coins; the second is innovations related to basis trading, especially Market Maker Lending Pools. This kind of lending pool can be traced back toThe GLP pool launched by GMX at the end of 2021 has now developed the Jupiter JLP pool on Solana and HyperLiquid's HLP pool.

The innovation of this mechanism is that it solves a key problem of decentralized exchanges: in centralized exchanges, exchanges can directly market to market makers. Providers provide mortgage loans, and decentralized exchanges previously lacked similar mechanisms. Through these lending pools, users seeking income can deposit assets into the pool, and perpetual contract traders can borrow these assets for market making and pay fees to depositing users. This has greatly improved the capital efficiency of decentralized perpetual contract trading, and is also one of the important reasons why the current decentralized perpetual contract trading volume has reached a record high.

It is worth mentioning that the rapid development of projects like HyperLiquid largely benefits from this lending pool mechanism. At present, the size of Jupiter's JLP pool has reached US$1.5 billion, and these infrastructures provide important support for on-chain basis trading. While decentralized perpetual contract trading may never fully match the capital efficiency of centralized exchanges, this mechanism does significantly narrow the gap.

Haseeb:

This is indeed an important innovation. So in terms of how exactly these lending pools operate, such as JLP or HLP, are there specific third parties operating them?

Tarun:

This depends on the specific project. Liquidity provision like GMX is programmatic, with target weights determined by governance or multi-sig. HyperLiquid's HLP is a strategy directly managed by the project team. JLP and GLP are similar to AMMs (automated market makers), and anyone can perform arbitrage operations. The key is that this mechanism effectively connects LP users who want to gain profits and traders who need funds for market making.

Best Meme

Haseeb:

I vote for Justin Sun’s birthday photo. You may recall that this entrepreneur, who has gained a lot of attention in our industry and is said to be well-liked by his employees, posted a photo on his birthday. This photo is obviously generated by AI, because he actually has 14 fingers in the photo. This might be the most embarrassing moment for one of the crypto industry’s most successful entrepreneurs, but it’sThis meme really impressed me and I think I will remember it for a long time.

Robert:

Although this may not be strictly speaking a typical meme, I The best meme goes to Pudgy Penguins. Maybe it’s because they just launched the PUNGU token, which opened with a fully diluted valuation of $5 billion. Although I do not hold any Pudgy Penguins or PENGU tokens, I have to acknowledge their achievements: continuing to build in a bear market, turning an ordinary meme into a huge success through continuous promotion and in-depth operation. Now they have launched penguin dolls, meme coins and other peripheral products, and the community is also booming.

Tarun:

I want to choose Bonk. Mainly because BonkBot is a genius marketing method that helped Bonk grow from near zero to billions of dollars in market capitalization in one year. If you want to say that the most successful "blue chip" meme coin in the Solana ecosystem is Bonk.

Tom:

This choice is really difficult, but I want to nominate Hugo Martingale, this The Polymarket intern Twitter account is run very well. Their content is novel and interesting, and they often have witty remarks in the comment area. They are a very high-quality account.

Haseeb:

I'm glad to see that not everyone is opting for meme coins. To be honest, we may have discussed too many meme currency topics this year, and I hope there will be less meme currency related topics next year.

Best/Worst Transformation

Robert:

I'm going to "Best Transformation" The two awards for "Best Recovery Story" were combined and awarded to MicroStrategy. While their decision to transform from a mediocre business intelligence software company into a Bitcoin leveraged ETF was made five years ago, 2024 is the year this transformation will truly be recognized by the market. Not only did they break through the all-time highs set during the dot-com bubble,Dot has also created an amazing business model: by issuing convertible bonds, obtaining funds at a higher premium than Bitcoin, and then continuing to purchase Bitcoin, forming a sustainable capital circulation mechanism.

Tarun:

I would like to nominate the Babylon protocol. Although their transformation technically begins in 2023, it will not be fully realized until 2024. Babylon initially only provided Bitcoin timestamping services for the Cosmos chain. Later, they developed "remote pledge" technology, allowing users to use Bitcoin as collateral for pledge. Now their TVL (total value locked) has reached $6 billion. Moving from a single timestamp service to a business of this scale is one of the most successful business model transformations I have ever seen.

Tom:

I would like to nominate the "worst transformation" of the Democratic Party. From Trump’s incident at Mar-a-Lago, to Biden’s executive statement on digital assets, to Kamala’s vague stance on cryptocurrency investment, the whole process seemed very confusing. In contrast, Trump adopted a simple and direct strategy, saying what people wanted to hear and doing what people wanted, such as "releasing Ross" and so on. The Democrats' performance on this issue is about as disappointing as taking a shot two inches in front of the goal and missing it completely.

Haseeb:

The best transformation I chose is the transformation of the NFT community into meme coins . For example, Miladys launched CULT tokens, and Pudgy Penguins launched PENGU. The market value of these meme coins even exceeded the original NFT project. Interestingly, this transformation has not attracted opposition from the community, and no one has accused them of turning away from NFTs. While these tokens appear to have little practical use, this transformation strategy has been surprisingly successful. This may be related to the choice of public chain. Many high-quality NFT projects are on Ethereum, while more meme coins are developed on Solana. This natural friction may explain why this transformation came relatively late.

Tom:

Interestingly, we find that in the cryptocurrency space, sometimes simplicity Vibe coin) are more popular than tokens that attempt to create serious value. This seems to prove a truth: when issuing new tokens, there is no need to overcomplicate it, and people prefer to have multiple simple tokens rather than one complex conversion mechanism.

The most disappointing project

Tom:

I think it was MakerDAO renamed to Sky Rebranding plan. The most obvious evidence of this failure is that even after the reinvention, people still called it Maker instead of Sky. While DAI is still huge compared to USDS, it is said that they are considering undoing this rebranding, which is obviously an unnecessary and ineffective decision.

Haseeb:

I choose the Bitcoin L2 project as the biggest failure. At the beginning of the year, the market had high hopes for Bitcoin L2, which was expected to reach a TVL of billions of dollars, believing that the Bitcoin ecosystem would embrace DeFi. But the reality is that even if multiple projects come online, they have all become "ghost towns." There is almost no discussion about these projects, and it is rare to hear founders express plans to launch projects on Bitcoin L2.

In addition, Celebrity Coins were also a major failure. There was a time when people thought celebrity tokens would be better than regular meme coins because they were endorsed by celebrities. For example, MOTHER falls into this category. But these are essentially social tokens, and they have performed extremely poorly over time. The market initially believed that this would become a huge opportunity, but now it seems that this expectation has completely failed.

Robert:

I would like to nominate Friend.tech and the social finance it drives Fi) The fall of the craze. Earlier this year, Friend.tech was once considered the hottest entrepreneurial project in the encryption field, but its development cycle was extremely short-lived. From the initial idea to being highly sought after, to the launch of V2 version and Friend token, it finally fell silent quickly. Now that the value of the product and token is almost zero, this may be one of the rare projects that truly self-destructs. While projects like Farcaster are still developing, the development of the entire cryptosocial space faces significant challenges.

The best counterattack story of 2024

Tom:

I would like to nominate Coinbase. Coinbase often becomes the market's "punching bag" when cryptocurrency prices fall. They are laying off thousands of people in 2023, and many think they may go out of business. But with the launch of Bitcoin ETF, Coinbase has gained new development opportunities as the custodian of ETF. Their overseas business, although not particularly prominent, is growing steadily. Additionally, they obtained a stay of execution in their lawsuit with the SEC, arguably setting up a series of important victories in 2024. It is worth noting that this is the second consecutive year that Coinbase has been named the best recovery story, and this "double recovery" is indeed impressive.

Haseeb:

I would like to nominate Magic Eden. They were once considered a "second-tier" NFT trading platform after OpenSea and Blur. But by entering the Bitcoin ecosystem, especially in terms of BRC-20 tokens and Ordinals, they have achieved amazing transaction volumes. The performance in the Solana ecosystem is also quite good. Recently they also launched a platform token, which can be said to have achieved a perfect transformation.

Robert:

In addition to MicroStrategy mentioned before, I would also like to nominate the entire Bitcoin ETF ecosystem. After years of rejection and failure, this year finally came my breakthrough. Thanks to Grayscale suing the SEC and winning, the success of the Bitcoin ETF paved the way for the Ethereum ETF. The performance of these ETF products is quite outstanding and can be called a model of resurrection from "death". While some might argue that this is more of a "winner" than a "recovery" story, institutions like BlackRock have certainly shown strength in the process.

Tarun:

I choose the Move ecosystem as the best recovery story. Sui's market capitalization has reached US$50 billion, Movement's start-up capital has exceeded US$5 billion, and many DeFi protocols have also been launched on these public chains. In the third and fourth quarter of 2023, when Solana is gaining a lot of attention, the Move ecosystem seems to be ignored. But now they are clearly enjoying a strong recovery through improved user experience and optimization of other features.

Moderator: From these cases we can see that in the cryptocurrency market, even projects that have experienced troughs can, as long as they have the correct strategic positioning and execution, it is possible to achieve a strong recovery. It also reflects the industry’s resilience and ability to innovate.

2025 Predictions

Haseeb:

I have three predictions. First, Bitcoin will hit $150,000 before a correction; second, DeFi tokens will usher in explosive growth; third, AI-related token prices will rise sharply, but the practical applications of the underlying protocols may be relatively limited.

Robert:

I am more optimistic about Bitcoin and predict it will reach $180,000 , but there will not be a sharp decline. Secondly, I think the United States will introduce specific legislation for cryptocurrency for the first time, which will be an important milestone for the industry. Finally, I predict there will be an AI crypto scam event that attracts media attention.

Tarun:

My predictions mainly focus on three aspects. First of all, there will be a wave of integration in the application chain and L2 track, and we may see multiple merger cases, mainly due to high operating costs and concentration of transaction volume. Secondly, the total market value of AI agent-related tokens will increase at least five times, significantly increasing from the current US$10 billion. Finally, Solana’s inflation rate will be reduced by at least 25%.

Tom:

I also have three predictions. First, money games like Farcaster or Button will go mainstream and gain virality on platforms like TikTok. Second, there will be new crypto-asset ETFs approved, but they may be relatively traditional currencies such as XRP or Litecoin, rather than the emerging assets that the crypto community is looking forward to. Third, we may see a major application-level security incident, possibly stemming from a supply chain attack or a library vulnerability.