Written by: Messari Team compiled by: Yangz, Techub News

Note: The original article is long, so reading time is recommended In about 3 hours. For the convenience of readers, Techub News has abridged and summarized it.

2024 is a year of transformation and revitalization for the cryptocurrency industry. After experiencing the turbulence of the previous cycle, the industry has made great progress in rebuilding trust, promoting innovation, and maturing the financial and technology ecosystem.

We are seeing the arrival of cryptocurrency ETFs, legitimizing the asset class and being adopted by institutions.

2024 will go down in history as a decisive year in the evolution of cryptocurrency. At the very least, a friendlier U.S. regulatory environment should clear up a lot of doubts among hesitant investors.

The U.S. election was the catalyst that pushed Bitcoin to finally break through the $100,000 mark.

The development of Solana has turned the battle between Bitcoin and Ethereum into a tripartite one. At the same time, Ethereum is also facing an identity crisis.

The success of Polymarket, Telegram mini-app and Hyperliquid shows that the industry is attracting many new users.

Memecoins dominate narrative discussions and further help attract new users. In addition to speculation, DePIN also ushered in a breakout year, with the market value of the track more than doubling and having actual uses.

This article is divided into two main parts, including "The Current Situation of the Cryptocurrency Industry" and "Segmented Tracks."

The current macro environment of the cryptocurrency industry

In the traditional market, after experiencing inflationary shocks in 2022 and 2023, investors are still worried about the return of inflation in 2024. But as inflation eases, focus turns to the weak labor market. Despite rising unemployment, Sahm's Law creator Claudia Sahm believes the U.S. economy is resilient enough and that the Fed has plenty of room to cut interest rates.

Overall, the U.S. economy remains strong, and aside from brief blips around the unwinding of yen carry trades, geopolitical conflicts, and standard election-driven hedging, the S&P has been steady for much of the year. Uptrend. At the same time, factors such as increased AI productivity and increased demand for gold reserves from global central banks are also affecting the market.

As for the cryptocurrency market, in 3. After hitting a staged top in March, Bitcoin entered consolidation. It not only responded downward to all the risks faced by the traditional market, but also faced its own special resistance, such as the Bitcoin sell-off in Germany, Mt Gox’s compensation, and the legal proceedings related to Tether. News of Ministry of Finance investigations and lawsuits filed by the US SEC against Uniswap, Kraken, Coinbase, Metamask, Robinhood and other companies (or Wells Notice), etc. Fortunately, the general election successfully brought the market out of eight months of consolidation and volatility, and the improvement of the regulatory environment also boosted market confidence.

Looking forward to 2025, the macro environment will be very beneficial. Although some positive expectations may be dashed after Trump takes office, a more friendly regulatory environment may eliminate negative risks and drive the rise of risk assets such as Bitcoin, Ethereum, and SOL. p>Supervision

2024 is a turning point for cryptocurrency, laying the foundation for the transformation and development in 2025.

In the first half of the year, the US SEC passed various enforcement actions ( In response, the cryptocurrency industry has fought back with the support of allies in Congress, advocating for clear, targeted legislation and. Seek judicial intervention to limit regulatory overreach (e.g. through FIT-21 bill, repeal of SAB-121).

In the second half of the year, the landscape changed dramatically as the Trump campaign adopted a pro-cryptocurrency stance. With Trump's victory, expectations for a more favorable regulatory environment have surged, making 2024 a decisive year for the evolution of cryptocurrency.

Specially. Trump made a series of promises to the cryptocurrency industry, including:

Establishing a Bitcoin and Cryptocurrency Advisory Committee composed of industry representatives to work on developing clear regulatory rules

End "illegal and un-American cryptocurrency crackdown"

Hold federally acquired Bitcoin as a strategic reserve asset

Hold federally acquired Bitcoin as a strategic reserve asset

p>

Defend the rights of Bitcoin mining

Remove US SEC Chairman Gensler

Oppose US CBDC

Make the United States the "Cryptocurrency Capital" of the World

Protect the right to self-custody and "transactions not subject to surveillance and control"

< p style="text-align: left;">Release Ross Ulbricht, the creator of "Silk Road"

In addition, there are several news about cryptocurrency in 2024. A new narrative, including self-hosting, support for Choke Point 2.0 Allegations of the operation, privacy and illicit finance (mixers), Bitcoin mining and energy consumption, and cryptocurrency lobbying activities.

Outlook for the U.S. Cryptocurrency Regulatory Environment in 2025:

Regulatory clarity comes from Congress, not the SEC: Trump will promote cryptocurrencies with the support of a Republican-dominated Congress The reshaping of regulations focuses on clarifying the jurisdictional boundaries of the SEC and CFTC through the "FIT-21" bill, simplifying the registration process and providing targeted disclosure requirements. This will provide a clear legal framework for digital assets and promote institutional adoption of digital assets.

Stablecoin legislation is expected to pass: With bipartisan support and Trump's push for financial innovation, the stablecoin bill is expected to be passed in 2025, and final legislation may It will draw heavily on the Payment Stablecoin Transparency Act. As for decentralized stablecoins such as DAI, their future is uncertain and may face more regulatory challenges.

CBDC development will continue, but retail CBDC is not on the agenda: Trump and the Republican Party tend to rule out the possibility of retail CBDC, but the Federal Reserve will continue to develop wholesale models CBDC, for cross-border payments. Legislation may further restrict the Federal Reserve’s issuance of retail CBDC, emphasizing the protection of financial privacy.

Self-custody is protected, privacy issues remain a focus: It is expected that legislation will be passed to protect individuals’ rights to self-custody digital assets, but privacy-enhancing technologies (such as coin mixers) will continue to be controversial, and special legislation may be introduced to Balancing privacy protection and combating illegal behavior

DeFi remains unregulated: Despite growing interest and concerns about DeFi, by 2025, DeFi will remain unregulated. It will remain largely unregulated, but Congress will commission a comprehensive study of DeFi to explore its potential benefits, risks and appropriate regulatory approaches.

Trump may adjust his stance on cryptocurrencies: If cryptocurrencies conflict with maintaining U.S. dollar hegemony, Trump may change his support for cryptocurrencies, especially in the context of the economic crisis and the rise of the BRICS financial system.

2025 2020 will be a critical year for cryptocurrency reform: Trump is expected to introduce support for cryptocurrency within his first year, but he may face turmoil after the 2026 midterm elections and progress may be slowed

The future of U.S. cryptocurrency is bright, and Trump’s support will bring opportunities to the cryptocurrency industry, but there is also a risk of reversal.

The arrival of institutions

Bitcoin and Ethereum ETFs Approval of: The approval of Bitcoin and Ethereum ETFs legitimizes the asset class and makes it more accessible to retail and institutional investors. For example, the IBIT ETF reached 3 billion in its first 30 days. The scale of assets under management exceeded US$40 billion in about 200 days, setting a record for the traditional market.

Institutional participation has expanded to multiple areas: not only wealth management companies have invested client funds in cryptocurrencies, but traditional financial companies (TradFi) have also increased their participation in tokenization, stablecoins, asset issuance, etc. . For example, companies such as Sky (formerly MakerDAO) and BlackRock have launched tokenized treasury bonds; Ondo Finance has launched USDY (tokenized treasury bond fund), with an asset management scale of approximately US$440 million; Franklin Templeton (Franklin) Templeton) has also launched on-chain funds backed by short-term treasury bonds and repurchase agreements, with a cumulative asset management scale of nearly US$500 million.

Fintech and cryptocurrency. Convergence of: FinTech, Payments and PlusThe boundaries of cryptocurrencies are increasingly blurring. In 2024, PayPal launched the stablecoin PYUSD on Solana; Agora, a stablecoin startup backed by Nick Van Eck, also launched the stablecoin AUSD on multiple chains. Institutions see potential in this area to reduce costs, increase transparency or speed up inefficiencies in payments or other verticals.

Highlights of other institutional adoption:

JPMorgan expands its blockchain platform Kinexys to support Cross-border payments and tokenization

Goldman Sachs plans to spin off its digital assets to expand product range

Robinhood Launching cryptocurrency transfer service in Europe and adding tradable assets

Revolut expands its cryptocurrency platform with plans to launch MiCa-compliant stablecoins

< p style="text-align: left;">Stripe acquires stablecoin company Bridge for $1.1 billion, becoming the largest acquisition in the cryptocurrency field

Visa cooperates with Coinbase , supports Coinbase Customers make real-time deposits via debit card and pilot USDC transfers on Solana and Ethereum

Coinbase integrates Apple Pay to convert between fiat and cryptocurrencies Providing convenient services

The rise of Solana

2024 is a critical year for the rise of Solana. During the year, SOL gained approximately 120%, and its market capitalization relative to Ethereum grew from approximately 16% to 25% by the end of the year. Solana's growth is driven not just by market speculation but also by actual advances in its infrastructure and technology, including the introduction of the SPL standard, the phased rollout of Firedancer, and innovations like ZK Compression.

In addition, low-cost, high-throughput transactions combined with growing narratives drive the expansion of Solana's application ecosystem. In 2024, Solana application spending will exceed $500 million, accounting forOver the same period, more than half of all on-chain application fees were comparable to the Ethereum ecosystem. However, a closer look at the fee distribution reveals a relative lack of diversity in the Solana ecosystem, with application fees highly concentrated in two areas, including liquidity staking and trading activity. The reason behind this is related to the promotion of staking rewards and its status as the main platform for Memecoin speculation. Use cases that are very prominent on Ethereum, such as lending, yield mining, and liquidity staking, have yet to gain similar traction on Solana.

If 2024 is the year of Solana’s rise, then 2025 is likely to be the year that Solana becomes a fully realized ecology. The emergence of DePIN applications and emerging AI-driven projects signals Solana’s expanding footprint beyond finance. However, the scale of these developments is still in its early stages, and the ultimate impact on network activity remains uncertain.

Memecoin

In 2024, Memecoin dominates the cryptocurrency space. Although Memecoin accounts for less than 3% of the top 300 cryptocurrencies by market capitalization (excluding stablecoins), its trading volume has consistently accounted for 6-7% of total non-stablecoin trading volume.

Memecoin’s rise isn’t driven solely by trends or user-friendly interfaces. They are nourished in a trading environment with excess capital and ample block space. As the broader cryptocurrency market appreciates in 2024, many traders find themselves with excess capital and limited high-quality investment opportunities. This prompted them to turn to Memecoin. Especially in high-throughput blockchains like Solana and Base, low transaction costs and high scalability provide an ideal environment for these speculative assets. Additionally, Memecoin trading platforms such as Pump.fun, Moonshot, and apps such as Telegram bots have simplified the trading process and attracted a new wave of retail investors.

Looking ahead to 2025, Memecoin is driven by key factors such as scalable blockchain infrastructure, low transaction costs, and the continued development of user-friendly platforms. Continued growth is expected. Additionally, Memecoin’s role as an outlet for speculation has the potential to draw attention away from more traditional speculative markets such as sports betting. While Memecoins may not account for the lion’s share of cryptocurrency market capitalization, their speculative and social appeal will ensure they have strong staying power.sustainability, especially in the context of increasing macroeconomic uncertainty.

Financing

At the time of writing in early December, cryptocurrency financing (measured by number of transactions) has been on an upward trend since 2023. But funding for startups and protocols was down about 20% year over year in terms of total funding, largely due to unusual circumstances in the first quarter of 2023. However, there are still some large financings in different verticals this year. Here are the key funding highlights for 2024:

Large funding projects:

Monad Labs: Raises $225M

Story Protocol (backed by a16z): Raises $80M in Series B

Sentient (artificial intelligence field): raised $85 million

Berachain and EigenLabs: raised $100 million each

Farcaster: Raises $150 million

Freechat: Raises $80 million

AI and DePIN Outstanding performance in financing:

Total financing in the field of artificial intelligence increased by approximately 100%, especially in accelerator programs such as a16z Crypto Startup Accelerator (CSX) and Polychain Beacon Fund

The total amount of financing in the DePIN field increased by about 300%

Venture capital institutions are investing in AI and cryptocurrency Fusion, AI Expressed strong interest in autonomous agents and the potential of AI in the gaming field

Other financing hot spots:

DeSci (Decentralized Science): BIO Protocol andAminoChain receives financing

Game Protocol: Asia-Pacific venture capital firms increase investment in gaming protocols based on TON blockchain

NFT and Metaverse projects: Financing rounds and financing amounts have decreased, compared with 2021 and 2022

Social field: Despite the uncertainty, Farcaster, DeSo and Projects like BlueSky still attract attention and funding.

User

a16z reported this year that monthly active addresses for cryptocurrencies have reached 220 million, a record high. But in reality, no one knows how many real users are actually adopting cryptocurrencies because there is no 1:1 relationship between active addresses and users. By filtering out some of the noise, a16z estimates that of those 220 million active addresses, somewhere between 30 million and 60 million are actual monthly cryptocurrency users.

While we will not attempt to speculate on user numbers, we believe that 2024 has provided substantial evidence that cryptocurrencies as a whole have new users. Below, we will provide some successful user-driven applications and ecosystems this year.

Phantom Wallet: As the most popular wallet in the Solana ecosystem, Phantom has achieved significant success due to its mobile-friendly user experience. It performed extremely well in the App Store, even surpassing giants such as WhatsApp and Instagram, and ranked among the top ten free apps on iOS. We believe that Memecoin has largely replaced NFTs in this cycle, and mobile apps like Phantom and Moonshot provide users with a seamless way to trade Memecoin on the go. The ranking of these apps in the app stores will continue to provide insights into how quickly users are flocking to cryptocurrencies.

Popularization of Stablecoins: In 2024, there will be a wave of stablecoin adoption among retail users and small businesses around the world. Emerging markets such as southern Africa, Latin America and Eastern Europe are bypassing traditional banking systems and embracing stablecoins, driven by limited banking infrastructure and growing mobile device penetration. Companies like Yellow Card, Bitso, and Kuna are doing this by providing seamlessFixed currency exchanges, payment APIs, and financial services tailored to local needs are leading this shift.

The combination of Telegram mini-program and GameFi: Tap-to-earn mini-games on TON, especially Notcoin and Hamster Kombat, have become viruses in the cryptocurrency industry marketing phenomenon. Notcoin has attracted more than 40 million users in a short period of time, becoming one of the most widely held tokens in cryptocurrency and has reached a valuation of nearly $1 billion. Hamster Kombat has attracted about 200 million users.

Polymarket: A real cryptocurrency application case: In 2024, the US presidential election further promoted Polymarket's growth, with nearly 1 million new registered users on the platform, highlighting its role as The rise of groundbreaking cryptocurrency use cases. Polymarket has not only achieved significant growth in transaction volume, but its market forecasting capabilities have also surpassed traditional opinion polls and become an emerging tool for predicting events. During the election, Polymarket’s mobile app became the second most downloaded iOS news app, surpassing traditional outlets like The New York Times and CNN.

Base and Hyperliquid accelerate the transformation from CEX to DEX: In 2024, the two applications Base and Hyperliquid will play a key role in accelerating the migration of users from traditional CEX to DEX. effect. Base reduces friction for new users with free Coinbase-to-Base deposits and withdrawals, driving significant growth in on-chain activity. At the same time, Hyperliquid provides perpetual product traders with a high-performance trading experience similar to Binance, making up for the shortcomings of DEX in user experience, driving the trading volume of derivatives DEX to reach new historical highs.

User growth in the cryptocurrency ecosystem will begin to shift from sporadic, fluctuating patterns to a more predictable and scalable growth trajectory in 2024. New users are discovering the natural appeal of cryptocurrencies through various applications, and the success of the above platforms is a sign that the cryptocurrency industry is developing in a more mature direction.

DePIN’s breakthrough

In 2024, the DePIN field ushered in a significant breakthrough, with the market value increasing by 132% year-on-year, exceeding US$40 billion. Here are the main developments and highlights in this area:

Surge in financing: In 2024, the amount of financing received by the DePIN project increased by 326.45% compared to 2023. Funding totaled more than $266 million in computing, energy and data collection startups, demonstrating strong investor interest in this area.

Real-world traction:

Helium Mobile: successfully attracted more than 120,000 in the first year of launch user.

Glow: 70 solar farms deployed in California and India.

GEODNET: Established the world's largest RTK network, with more than 11,000 nodes.

Mainstream cooperation: Multiple DePIN projects cooperate with large enterprises, such as Helium Mobile and GEODNET partners with the U.S. Department of Agriculture to provide high-precision agricultural services.

2025 DePIN field forecast

Revenue breakthrough: In 2025, DePIN field revenue is expected to exceed $150 million. Despite limited demand-side revenue growth, several protocols have shown strong growth potential, with companies such as GLOW and Helium both exceeding $10 million in annual revenue.

Energy and wireless sub-tracks lead the way: The energy (DeGEN) and wireless (DeWi) industries are expected to become the two fastest-growing sub-industries in the DePIN field in 2025 . Several startups such as DAWN, Glow, XNET, etc. are ready to launch mainnet or officially exit the beta stage, providing growth potential in 2025.

Helium becomes the leader in the DePIN field: With the advancement of the Carrier Offload plan and the continued growth of Helium Mobile, Helium is expected to become the project with the largest market value in the DePIN field.

Cooperation and integration: with DePINOnce the practicability is verified, we will become more actively involved in this field. In 2024, the USDA has partnered with GEODNET to provide high-precision services to farms. And incoming AI and cryptocurrency czar David Sacks, an investor in Solana, Helium, Render, and Hivemapper, has shown his knowledge and interest in DePIN.

The rise of Solana competitors: While Solana is the main base for DePIN projects in 2024, other blockchains specifically tailored for DePIN such as Peaq and IoTeX is also increasing its efforts to attract DePIN projects. In addition, it is expected that in 2025, emerging chains such as Base that prioritize user experience, access to liquidity, and DevX will become the main building platforms for DePIN projects, further promoting the growth of DePIN.

Segmentation of the track Bitcoin Bitcoin assets

For Bitcoin, 2024 will be a year recorded in history. This was a year in which Bitcoin hit multiple all-time highs, entered the balance sheets of the largest U.S. asset managers, and became a focus of the 2024 election. Main highlights:

Bitcoin ETF approval: The approval of Bitcoin ETF is the biggest highlight in 2024. In 12 months, only April saw a net asset outflow.

Corporate adoption increases: Michael Saylor and MicroStrategy continue to dollar-cost average their holdings of Bitcoin and plan to raise $42 billion over the next three years to buy newer Many Bitcoins. Other public companies such as Marathon Digital Holdings, Riot Platforms, and Semler Scientific have also begun accumulating Bitcoin reserves, indicating that corporate adoption of Bitcoin is growing.

Bitcoin block reward halving: 2024 is also the year when the Bitcoin block reward is halved. As a landmark event that occurs every 4 years, as miner rewards decrease, so does the number of natural sellers of Bitcoin.

2025 Forecast

ETF inflows increase: Bitcoin ETF inflows at 20Year 25 continues to increase, especially as Grayscale’s GBTC turns to positive net inflows. Over time, institutions are likely to slowly become the main driver of Bitcoin’s daily price movements and help Bitcoin mature.

World's leading store of value: The approval of a Bitcoin ETF is likely to put Bitcoin into the early to mid-stage stages of becoming the world's leading store of value. In November, Bitcoin overtook silver to become the world’s eighth-largest asset.

Trump changes: Although Trump has shown a positive attitude toward cryptocurrencies and Bitcoin, whether he will ultimately fulfill his claims remains to be considered. We believe the likelihood of a strategic Bitcoin reserve is low, but if it can deliver on its promise, it could further fuel Bitcoin's growth and prosperity.

Bitcoin network

Inscriptions and runes: At the end of 2022, Casey Rodarmor inscribed text on the Bitcoin mainnet for the first time, and the resulting Bitcoin inscription was born. Gained industry attention during the year. By April 2024, Casey launched a follow-up protocol called Runes, which represents Bitcoin’s new non-fungible token standard, similar to ERC-20 on Ethereum.

Bitcoin’s programmability: Although the original design of Bitcoin’s base layer was to pursue security and decentralization, with the launch of BitVM, the Bitcoin network The programmability has been significantly enhanced. BitVM implements off-chain computing and on-chain verification mechanisms, enabling Bitcoin to support applications such as decentralized finance (DeFi), cross-chain bridges, and smart contracts. Following BitVM, the development of "Bitcoin L2" is also a major key to the Bitcoin network in 2024. There are currently more than 40 related projects in the test network or main network. CORE, Bitlayer, Rootstock, and Merlin Chain lead the programmable layer in terms of TVL, but it remains to be seen whether they will develop into mature ecosystems.

Bitcoin Staking: Launched in Q3 2024, Babylon is Bitcoin’s first staking protocol, allowing Bitcoin holders to pledge their assets to Other networks to stay safe and earn rewards. Similar to Ethereum’s EigenLayer, Babylon leverages Bitcoin’s massive economic security to enable shared security across the entire PoS network. Unlike current forms of staking, Bitcoin remains on its mainnet and holders can do so without giving up control of their BitcoinsDelegate others to provide security.

2025 Forecast

From static chain to diversified ecology: Bitcoin in 2024 The network has gradually transformed from a static chain mainly used to store and trade BTC to a diversified ecosystem. The Bitcoin network is undergoing an identity shift, and while development seems set to continue moving forward, the actual demand for these new categories is uncertain.

Rune and Glyph may be about to take off: We think it is highly likely that as Solana and Memecoin on Ethereum continue to gain momentum, attention will eventually Turning to the runes and inscriptions on Bitcoin. And Magic Eden has enhanced support for inscription and rune trading. We predict that if the Bitcoin ecosystem takes off, Magic Eden will be a worthy winner.

Bitcoin's addressable market still has a lot of room to grow: Bitcoin's programmability and Bitcoin staking are still in their infancy, and early TVL growth Not enough to show real demand. In 2024, consumers will mostly favor the performance of networks like Solana and Base, with less emphasis on decentralization and security. If this trend continues, Bitcoin developers will face an uphill battle. Still, there’s plenty of room for upside in Bitcoin’s addressable market. We note that even single-digit penetration of Bitcoin network utility could result in over $30 billion in value inflows. We just need more evidence that this is what users want.

Ethereum

The overall performance is not as good as its competitors: In 2024, the overall performance of Ethereum is not as good as mainstream crypto assets such as Bitcoin and Solana. Ethereum supply will swell throughout 2024 due to low activity on the network.

The initial performance of Ethereum ETF was unsatisfactory: In July, the Ethereum spot ETF was approved. However, the Ethereum ETF pales in comparison to the Bitcoin ETF and has only recently begun to show traffic growth.

The leadership of smart contract platforms is challenged by Solana: In 2024, Ethereum will not be as good as Solana in many key areas, including transaction fees and DEX transaction volume. . Despite the growth in Ethereum L2 activity, prominent investors have questioned whether this growth is accretive or ultimately value-extracting.

The contradiction between the continued growth of L2 and the decrease in mainnet activity: By the end of 2024, Ethereum Rollups will expand Ethereum’s throughput capacity by 15 times, with cumulative throughput per second Volume is approximately 200 transactions. In addition, the growth of Base and the news that others such as Kraken, World (Worldcoin) and Uniswap are building L2 on Ethereum have sent positive signals. However, the growth of L2 also means a decrease in activity on the Ethereum mainnet. Even more worrying is Ethereum’s inability to effectively monetize its data availability service. Blob fees remain at a minimum of 1 wei for a long time. At the same time, the mismatch between growing L2 profitability and non-existent DA fees became the core argument behind the idea that L2 is extractive. L2 also creates fragmentation that worsens the user and developer experience. Several workarounds have been implemented and more solutions have been proposed. But monolithic and neutral chain abstraction solutions, such as Particle Network and Polygon’s AggLayer, are still in the early stages of implementation.

Ethereum is no longer the main venue for crypto speculation: 8 more tokens launched on Solana than Ethereum in 2024 thanks to success of Pump Fun times. Beyond Memecoin, other Ethereum-native narratives haven’t delivered on their promise in 2024: EigenLayer AVS has yet to find product market fit; Friend.tech doesn’t bring the future of SocialFi; and even Farcaster and Lens have seen a decline in attention.

Although some investors look down on speculation, in the field of cryptocurrency, speculation can drive innovation. DeFi speculation in 2020 created the DeFi sector and exposed Ethereum’s limitations at the base layer. Speculation can also attract more users and builders, generating long-term value. If there was a greater share of speculation on Ethereum or its L2, it would lead to more revenue, better sentiment, and potentially higher growth.

2025 Predictions

Ethereum’s dual role: Ethereum is the backbone of cryptocurrencies. It competes with Bitcoin in terms of currency and with other emerging blockchains in terms of decentralized innovation. Critics believe that Ethereum does both poorly, while believers believe that Ethereum does both well enough. We believe that Ethereum does not have a marketing problem, nor does itWhat is called a "North Star" is needed. However, there are some low- or no-cost improvements that can be made to Ethereum to better serve users.

L2 is better than L1: Ethereum’s upgrade roadmap is effective, especially in the expansion of L2. The theoretical capacity of high-throughput L2 such as MegaETH far exceeds that of any L1, and L2 has greater flexibility and expression space in design.

Fees are not a key driver: While fees play an important role in network economics, they are not the primary value driver for L1s such as Bitcoin, Ethereum, and Solana. Current fees are mostly driven by speculation, and the sustainability of this model remains to be seen. We believe that low fees are good as long as the network economy is sustainable.

Ethereum is almost perfect and has many paths to success. A very large Rollup, an interconnected Rollup-based network, and high fee consumption, these loose fundamentals can make Ethereum once again become the "home" of cryptocurrency natives and new entrants. Capturing market share among natives is likely to generate institutional interest, creating a positive growth flywheel.

Solana

Solana's technical progress is somewhat repetitive with the above. This section mainly focuses on Solana's ecological progress

In the past 12 months, we have clearly seen that Solana's "comeback" is not a simple return after the collapse of FTX. What was once a competition between Bitcoin and Ethereum has now evolved into a situation where the three giants are competing against each other. Looking ahead to 2025, the Firedancer program will be fully implemented to significantly increase the diversity of the network’s customers. In addition, the first Solana L2 is also expected to launch in 2025.

Solana in 2024 is reminiscent of the early Ethereum era. This year, Solana ecosystem users have made a lot of money. Projects such as Jupiter, Tensor, Kamino, Drift, and Parcl have airdropped more than $1 billion to their communities. This huge wealth effect rippled across the entire ecosystem, driving a surge in DeFi participation and pushing TVL from $1.5 billion at the beginning of the year to more than $9 billion at the time of writing. In addition, as lending platforms integrate new stablecoins and the development of on-chain derivatives, DeFi core infrastructure alsoSynchronized maturity. Stablecoin issuance has also skyrocketed, climbing from $1.8 billion to nearly $5 billion, further enriching the network’s liquidity base. Beyond DeFi, consumer-centric innovation broadens the design space for on-chain applications, from embedded wallets and Blink-powered URLs to upcoming mobile devices.

In addition, Solana has also become the focus in the DePIN field and the Memecoin craze.

2025 Trends

Beyond speculation and ecological expansion: In the third quarter of 2024 alone, the Solana ecosystem received US$173 million in financing, the second time since 2022 Strongest quarter ever. In 2025, we expect that the Solana ecosystem will see applications beyond speculation. In addition, although it is still early for network expansion, the emerging Solana L2 ecosystem is worthy of attention.

The convergence of AI and cryptocurrency: One of the most important emerging trends in the second half of 2024 is the convergence of artificial intelligence and the cryptocurrency ecosystem, especially AI agents. It is important to point out that some of the leading AI agent applications are built on Solana, such as ai16z.

Growth of interest in TradFi: Shortly after the U.S. presidential election, VanEck, Bitwise, and 21Shares all submitted SOL spot ETF applications, indicating the growing market demand for SOL asset ETFs. increase.

Intensifying competition: While Solana has established a sizable lead in high-throughput, general-purpose smart contracts, competitors are also gaining momentum. Sui and Aptos have performed strongly over the past few years, and a new batch of L1s are expected to join the fray next year, such as Monad, Berachain, and Sonic.

Other L1 and infrastructure high-performance general-purpose L1

The newcomers in the last cycle, Sui and Aptos, both have TVL of more than 1 billion US dollars this year, indicating that developers and users are interested in There is growing confidence in exploring high-performance alternatives to the Ethereum Virtual Machine (EVM).

TON emerged from relative obscurity. While activity has dropped significantly since the summer, TON is arguably the most popular among all mainstreamThe company with the largest distribution funnel in L1 has a mini-app integrated directly into Telegram.

Tron remains a strong player in the payments space, with its stablecoin having a circulating supply of nearly $60 billion.

Modular building blocks: Celestia and data availability layer

All requirements for data availability (DA) on Celestia come from Ethereum Rollup, which is designed to reduce transaction costs. This has led to the view that the external data availability layer is simply Ethereum’s “alt-DA”. Combined with the distribution of nearly $1 billion in unlocked funds to contributors and early backers, it looks like, on paper, a down year for Celestia.

However, significant research breakthroughs and continued engineering progress solidify Celestia's technology roadmap, clarifying the implementation of large-scale, lightweight verification and called Lazybridging The path of new interoperability standards has the potential to unify the currently fragmented Rollup ecosystem.

We believe that cross-chain interoperability initiatives, such as Celestia’s Lazybridging proposal and Avail’s Nexus ZK proof verification layer, have the potential to be implemented as modules in the second half of 2025. L1 Build meaningful network effects. Celestia, in particular, is about to become its own ecosystem. Next year, a lineup of projects such as Astria, Forma, Hashflow’s xOS, SpiceNet, and Prism will bring healthy DeFi, infrastructure, and consumer applications to the Celestia ecosystem.

A new generation of L2

applications are phasing out L1 and choosing to launch their own L2: stablecoin protocol Frax launches Fraxtal; Uniswap launches Unichain. Both are built on the Optimism technology stack, and the likes of Sony and Kraken have also announced their participation in the Superchain initiative. Furthermore, this trend is not limited to the Ethereum ecosystem. Solana-based platforms such as Zeta Markets and Grass are also exploring L2 prospects.

Next-generation virtual machines: As non-EVM-based L1 virtual machines have proven their feasibility, it is not enough for L2 virtual machines to follow a similar pathStrange. Highlights this year are Eclipse and Movement. While both are still in their infancy, over the coming year, advances like these will intensify efforts to convince developers to abandon the EVM and embrace the new paradigm.

L2 design space continues to expand

This year, Optimistic EVM L2 (such as Base, Arbitrum, and OP Mainnet) continue to dominate by most metrics, leading in adoption and stay ahead of the curve in terms of activity. ZK Rollup, led by StarkNet and zkSync, lags behind in terms of adoption, but has also achieved important interim results.

Next-generation L2 faces fierce competition and needs differentiated value propositions to break through. This has given rise to new L2 designs, such as MegaETH, which adopt a centralized sequencer design without reservation, with the goal of achieving 100,000+ TPS and millisecond block confirmation times. In contrast, Ethereum-based Rollup (such as Taiko) focuses on making Rollup closer to L1.

In 2025, all eyes will be on Unichain, and if Unichain succeeds, it will create a wave of protocols that will abandon their L1 , build L2 for specific applications or specific fields to increase value accumulation and create more income for token holders.

We also expect that alternative virtual machines (primarily Solana and Move VM) will continue to gain traction. However, it's too early to determine which L2 architecture will ultimately win out in the long run.

Avalanche, Cosmos and application chains

For a long time, independent application chains have been regarded as a "dream" for researchers and developers, and it is difficult to achieve lasting success. . However, Avalanche has gone against the trend and steadily developed into one of the most powerful multi-chain ecosystems.

It is worth noting that the two L1s in the Avalanche ecosystem, DeFi Kingdoms and Dexalot, exceeded the total gas usage and transaction costs as early as September. C-chain. However, C-chain remains healthy, with TVL exceeding $1.5 billion and stablecoin supply exceeding $2 billion, according to DeFiLlama data, both of which rank in the top ten of all L1s.

On the other hand, Cosmos has not performed well this year, and ATOM's value accumulation mechanism is also highly questionable. However, there are also some positive developments in Cosmo. For example, the cumulative issuance of USD cards by Noble, the Cosmos stablecoin issuance platform, has exceeded US$1.5 billion.

Looking forward to 2025, the Avalanche9000 upgrade will bring significant performance improvements to any L1 in the Avalanche ecosystem. Combined with Avalanche's BD capabilities in the institutional and gaming fields, this It's going to be another strong year.

As for Cosmos, the future remains unclear. We believe that most problems in the Cosmos ecosystem stem from historically troubled decision-making and failed coordination. However, this may change after the Interchain Foundation (ICF) acquired Skip Protocol.

Other Infrastructure Trends

Interoperability: As the number of L1s and L2s continues to increase, interoperability will be key. Optimism’s Superchain is positioned as the largest “Rollup cluster” on Ethereum, with Coinbase, Kraken, Sony, Uniswap and others launching L2 on its network. Additionally, intent protocols like Across will play a key role in the interoperability space next year. And Espresso and other shared sorting infrastructure is another way to improve composability between L2s.

Chain abstraction: Chain abstraction will become one of the most noteworthy trends in the next year.

Zero-knowledge technology: ZK technology is advancing at an alarming rate. We are excited about many developments in this space, including Succinct’s decentralized proof network and RISC Zero’s unbounded protocols. The mature ZK technology stack will revolutionize scalability, privacy, interoperability, Bitcoin programmability, and even expand beyond blockchain applications.

Some predictions for the infrastructure field next year in 2025:

The year ZK breaks out: ZK technology is on the verge of exponential growth. In 2025, it is expected that almost all infrastructure protocols will adopt ZK technology as the cost of proof decreases and performance continues to improve.

Mature modular ecology: high-performance, universal smart contract chains have dominated this year’s reports. But in hindsight, this may prove to be an overcorrection as the cross-chain user experience improves and application ecosystems such as Celestia, EigenDA, Avail and others begin to find their footing. While there is an element of infrastructure fatigue, especially with more complex modular protocols, the technology is clearly gaining more and more traction. The lines between applications and infrastructure will become increasingly blurred, and modular protocols will benefit from this trend.

High-performance general-purpose chain competition intensifies: The next batch of high-throughput general-purpose smart contract chains, led so far by Solana, is led by Aptos and Sui The momentum is good. However, with new L1s like Monad and Sonic coming online, the competition will be real. It’s too early to tell, and L2 players such as MegaETH, Eclipse, and Movement will also compete for market share in this space.

DeFiDEX and trading

In 2024, the trading volume of spot DEX exchanges will increase slightly relative to the share of CEX, from about 9.4% in January to 9.4% in November About 11.4%, peaking at about 13.9% in October. Derivatives DEX’s share relative to CEX increased from about 2.7% in January to about 3.7% in November, peaking at about 5.2% in February.

Spot trading: From January to November 2024, the total trading volume of spot DEX increased by 171% year-on-year. Over time, some of the newer DEXs gained market share, while the market share of Uniswap, Pancakeswap, Curve, and other existing exchanges suffered. The surge in Solana trading activity has fueled the growth of Raydium, which now leads the market with around 30% spot volume share. The relative status of other Solana DEXs such as Orca’s Whirlpool, Lifinity, and Meteora has also increased. In addition, Uniswap’s trading volume share in the Base and Optimism marketsThe lead was taken by the Aerodrome and Velodrome.

Derivatives trading: From January to November 2024, the total trading volume of derivatives DEX increased by 328% year-on-year, indicating that as market conditions improve, Speculation has resumed. Like spot DEXs, new perpetual DEXs are also gaining share in competition with dYdX. Hyperliquid was the clear winner in 2024, ending the year with around 40% dominance in the derivatives space. Additionally, the market share of perp DEXs on Solana such as Jupiter and Drift Protocol also increased in 2024.

Prediction markets and trading robots

This year, Polymarket serves as a new cryptocurrency exchange It was a huge success, with monthly trading volume exceeding $2 billion during the October and November elections. Additionally, DEX trading bots such as Trojan, Bonkbot, and Maestro emerged in 2024 and quickly became the preferred method for on-chain trading for many users. Currently, the average daily trading volume of these bots exceeds $180 million.

2025 Trend Forecast

DEX transaction volume on Base and Solana will continue to grow: The two blockchains with the fastest growing transaction volume in 2024 are Solana and Base. Solana’s trading volume is mainly focused on Memecoin, while Base’s trading volume is mainly concentrated on spot ETH and Coinbase’s cbBTC. We believe that the success of these two chains is largely due to low transaction costs and user-centered product routes. We believe that Solana and Base DEX’s share will continue to grow in 2025 relative to other on-chain DEXs.

Vertical integration and composability: 2024 brings us a choice between vertical integration and composability. On the one hand, protocols like Hyperliquid and Uniswap have transitioned to having their own infrastructure; on the other hand, VCs like Multicoin support Solana native applications like Drift. There are merits to both viewsAt the same time, we believe both approaches offer good paths forward as high-value traders focused on execution gravitate towards vertically integrated protocols, while more less mature on-chain players opt for composability.

Post-election prediction market: This year, Polymarket has found product-market fit as an on-chain trading venue for atypical trading markets (such as and pop culture) point. Still, open interest on the platform has shrunk dramatically as the 2024 presidential election wraps up. We predict that trading volumes may be down compared to pre-election trading months, but that Polymarket can continue to be successful in its core competencies as the election catalyzes usage and mindshare of its product. In addition, new and existing prediction markets across chains will gain attention.

The Return of RWA

Since the start of 2023, the total value locked (TVL) of RWA has increased from US$2 billion to US$9 billion, mainly composed of tokenized Treasury bonds Driven by (major financial institutions such as BlackRock and Franklin Templeton launching tokenized Treasury bond products). Despite their limitations, tokenized Treasuries have played a key role in bridging traditional finance and cryptocurrencies in a high interest rate environment. However, this reliance on favorable macro conditions raises questions about the industry's ability to remain resilient after interest rates normalize.

Looking ahead to 2025, tokenized Treasuries are expected to face headwinds as interest rates fall, while growth grows as on-chain yields become more competitive There may be a slowdown. However, RWA has significant opportunities to expand its reach and attract new capital in several areas, including idle on-chain capital, exchange collateral, exporting on-chain yields, and higher-yielding products such as tokenized private credit.

Points and revenue strategy

In 2024, protocols that have not issued tokens will choose to launch points programs, and famous protocols including EigenLayer, Ethena, and most recently Hyperliquid have adopted this strategy. In addition, the points market, led by the Solana Ecosystem Whales Market, has also received widespread attention, allowing users to monetize points and pre-allocations.

In addition to points, Pendle has become an important player in interest rate derivatives by relying on its integration with Liquidity Rehyping Tokens (LRT) and its connection with the EigenLayer restaking points program. Platform that facilitates EigenLaye by allowing users to decouple principal and earnings from liquid re-staking tokens and LRTThe trading of r points creates a secondary market for these speculative incentives. EigenLayer, through partnerships with protocols such as ether.fi and Kelp DAO, allows Pendle users to trade EigenLayer’s expected airdrop value in Yield Tokens (YTs). Within three weeks of launching its LRT-based pool, Pendle had generated $200 million in TVL from these integrations, accounting for 40% of its total TVL by the end of the year.

We expect that in 2025 the points program will remain at the core of the protocol designed to guide user adoption through token distribution. But future points programs may be tweaked to align incentives with desired user behavior.

AI x Crypto

The integration of AI and cryptocurrency is undoubtedly one of the hottest new topics in 2024. In 2024, investment in this sector will exceed $1 billion. On the public market, the total market capitalization of AI-related protocols grew from approximately $5 billion in October 2023 to more than $60 billion in early December. As for the specific tracks, they can be divided into decentralized model training (such as Bittensor), AI agent tools and services (such as Autonolas and Wayfinder), and recent new trends, AI agent KOL (such as Terminal of Truths, Zerebro, Luna, Ai16z wait).

Looking forward to 2025, we expect that Bittensor will be upgraded through Dynamic TAO and become a cutting-edge artificial intelligence research center in the field of encryption; in terms of decentralized model training, the project party may not Will try to compete with giants such as OpenAI and Google by training a large number of basic models, but will shift the focus to fine-tuning smaller professional models; for AI agents, on-chain development will increase, and AI agent coins will be more expensive than Memecoin More "dynamic"; in addition, open source and closed source artificial intelligence will also be discussed in the cryptocurrency industry.

DePIN

This part of the content mainly focuses on the progress of subdivided tracks in the field of DePIN, including two major sectors: Physical Resource Network (PRN) and Digital Resource Network (DRN) . Among them, PRN is subdivided into energy (such as Daylight and Grow), wireless (such as Helium and DAWN), environmental data collection (such as GEODNET and Onocoy), mobile terminals and map images (such as Hivemapper and NATIX) tracks. DRN is subdivided into computing (such as Akash and Render), file storage (such as Filecoin), AI data layer (such as Grass), etc. Due to space limitations, this article will not go into details. Interested readers can read the original article to learn more.

Consumer Applications

Web3 Gaming: After two years of relatively stagnant growth, 2024 marked a significant resurgence in Web3 gamer activity. On-chain daily active addresses (DAA) continued to trend upward throughout the year, starting at 1.3 million and reaching an all-time high of nearly 7 million in December. Looking forward to 2025, we believe that games still have huge potential as an entry point into Web3. In addition, P2A will continue to be the main way to attract players into Web3 games, and mobile applications will become the decisive trend for Web3 games in 2025.

Memecoin: Love it or hate it, Memecoin is undoubtedly one of the most prominent narratives of 2024, and Solana is undoubtedly the biggest beneficiary of this trend. We expect Solana to continue to account for the largest share of Memecoin transaction activity through 2025.

DeSoc and SocialFi: The decentralized social space has experienced accelerated growth over the past year, continuing the momentum seen in the second half of 2023. Similar speculation-focused platforms like fantasy.top and time.fun gained traction in 2024, but much of the growth was short-lived, with retention rates plummeting shortly after launch. In comparison, DeSoc platforms such as Farcaster and Lens saw higher adoption rates throughout the year.

NFT: Interest in NFTs has been largely flat throughout 2024, with transaction volume continuing to decline after a brief rise in the first quarter. However, there is still a lot of progress being made on some of the circuit's blue-chip projects. For example, Doodles has partnered with McDonald's to launch 100 million limited-edition McCafé holiday cups across the United States; Pudgy Penguins has expanded its Pudgy Toys series to major retailers, including recently launched products at Target; in addition, BAYC launched the ApeChain mainnet in October. Pudgy Penguins and Azuki are also developing their own infrastructure, respectively launching Abstract Chain and AnimeChain.

CeFi

The rise of ETFs: The Bitcoin ETF has been a huge success. After some post-launch fluctuations, cumulative net inflows have been rising steadily. Currently, Bitcoin ETFs collectively hold over $100 billion in asset value. Additionally, the Ethereum ETF began to gain traction after the election, with multiple nine-figure inflow days in December.

CEX’s efforts and struggles: On the regulatory front, exchanges seek to expand their global influence by complying with the new regulatory framework. Binance and Crypto.com received virtual asset service provider licenses in Dubai; OKX received regulatory wins from their respective monetary authorities in Australia and Singapore. Likewise, Bybit has completed VASP registrations in a handful of emerging markets, seeking to compete in markets such as Turkey and Georgia where demand for digital dollars and alternative currencies is particularly strong. In the stablecoin space, Circle became the first stablecoin issuer to comply with Europe’s new regulatory framework for crypto asset markets. Additionally, Kraken settled with the SEC over its staking services, while Coinbase continues to fight the SEC. In addition to regulatory efforts, each CEX has expanded in terms of on-chain integration, trading capabilities, growth plans, stablecoin expansion, and more.

The arrival of new institutions: In addition to BlackRock's strong embrace of cryptocurrencies, some large companies have entered (or re-entered) the cryptocurrency space this year, such as the launch of Revolut The independent cryptocurrency exchange Revolut

Stablecoin trends: 2024 is the year when stablecoins will shine. By mid-2024, monthly stablecoin transfer volume across all chains will exceed $3.5 trillion, equivalent to Visa’s entire third quarter transaction volume. Additionally, given the fact that the U.S. dollar remains the world’s primary reserve currency, U.S. dollar stablecoins have become an alternative for many investors to hold U.S. dollars. At the same time, there have been many substantial developments in on-chain stablecoin innovation. For example, Ethena’s USDe became the stablecoin with the fastest supply to reach 3 billion US dollars, while Maker changed its name to SKY and hopes to re-accelerate its stability through its new stablecoin USDS. The growth of coin supply. The growing stablecoin track has also spawned a new industry vertical, PayFi, which allows blockchain to be used to fund on-chain and off-chain payment applications.