Original author: Unchained
Compiled by: Lawrence, Marsbit
In this challenging and opportunity-filled year of 2024, the cryptocurrency market has experienced a rollercoaster of development. At the end of the year, the Chopping Block program invited four industry figures—Dragonfly Managing Partner Haseeb Qureshi, Dragonfly General Partner Tom Schmidt, Superstate CEO Robert Leshner, and Robot Ventures Managing Partner Tarun Chitra—to reflect on the key moments of the year, with Marsbit providing a written compilation for this podcast.
Biggest Winner
Haseeb:
I believe the biggest winner this year is HyperLiquid. This decentralized perpetual contract trading platform conducted the most successful token airdrop of the season, marking a 'Uniswap moment' in this cycle. Although it has a long way to go in terms of true decentralization, its token distribution approach and community response are exhilarating. As a VC, we truly regret not being involved—indeed, almost all VCs attempted to invest in HyperLiquid, but they were all turned down. This kind of 'perfect birth' project is indeed impressive, especially in terms of product capability, execution, and technical delivery.
Robert:
From my perspective, the biggest winners this year are all cryptocurrency founders and companies in the U.S. We have witnessed an important turning point: from the extreme hostility and resistance faced before to the favorable outlook we see now. As a U.S. cryptocurrency founder, this change is exhilarating. Finally, there is no longer the need to feel troubled about engaging in cryptocurrency business in the U.S.
Tarun:
I want to choose the entire field of DeFi (Decentralized Finance). Do you remember the 36-month bear market predicted earlier by Degen Spartan? DeFi was once seen as the problem child in the cryptocurrency space, with valuations of unlaunched public chains often ten times that of DeFi projects. But now, DeFi has made a strong comeback. As someone working in the DeFi space, it is indeed gratifying to see such development.
Tom:
My choice might be a bit unexpected—it's Tether (USDT). They have performed exceptionally well this year and could be considered one of the most profitable companies globally. For years, many have been waiting for Tether to collapse or encounter major issues, but the opposite has happened; it has become increasingly successful and more regulated. Tether has not only continued to grow but has also become an important case in the cryptocurrency industry, particularly in the application of stablecoins and the global trend of dollarization.
Biggest Loser
Robert:
Undoubtedly, the anti-crypto camp is the biggest loser this year, including some members from both houses of Congress and certain individuals from the executive branch, especially some members of the SEC and those promoting 'Operation Chain Break 2.0.' They mistakenly believed that suppressing the cryptocurrency industry would advance their political careers, but it has proven to be a completely failed strategy. I hope this will change the future political landscape and that political suppression against cryptocurrencies will no longer be a viable political tool.
Tarun:
I would say the biggest loser this year is the numerous second-tier Layer 2 projects and application chains. At the beginning of 2023, the market widely believed that there would be thousands of L2 projects, with each L2 tech stack spawning many purpose-specific application chains. But the reality has proven this idea completely wrong. Just look at the ongoing turmoil in the Cosmos ecosystem. Previously, people thought successful applications like Blur could launch their own application chains or L2s like Blast, but the actual results have been disappointing. Instead, we see users leaning towards a few top L2 projects.
Haseeb:
I believe 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 that all technology is meaningless was once prevalent. But the reality is that the proportion of meme coin trading volume relative to total trading volume has significantly declined from the early 20-30% to now 10% or even lower. The market has shown more enthusiasm and confidence in true technological innovation and substantive progress. If you believe that all technology is worthless, then you are indeed a big loser this year.
Tom:
I would say the biggest loser is those who abandoned crypto this year to turn to AI. This is a classic case of 'game over, we're back.' When asset prices drop, investors exit, developers switch careers, and market sentiment becomes extremely negative, but cryptocurrency always manages to make a comeback in different ways. I personally know many people who either sold their cryptocurrencies, closed their companies, or switched to other fields. It’s unfortunate because in this field, you really need strong conviction to succeed. Those who lack that conviction and turned to AI may now regret it.
Biggest Surprise
Tarun:
Without a doubt, the most surprising for me this year were the projects Pump.fun and BonkBot. Remember we discussed Pump.fun in January and February this year on the show? It had just started, offering users an innovative way to create assets. I believe that without Pump.fun, the development of meme coins would not have been so rapid. The other is BonkBot, a Telegram bot focused on meme coin trading. From a revenue perspective, BonkBot is an invisible champion, just like Pump.fun, both achieving $100 million in revenue in their first year. The speed of development in meme coin infrastructure has indeed surprised me.
Tom:
I want to share two aspects of surprise. First is the launch of World Liberty Financial, where a presidential candidate becomes associated with a DeFi token, and Trump even holds a wallet; this situation is truly unbelievable. But even more surprising is its sales performance. Normally, ordinary meme coins or NFTs can sell out quickly, but this presidential-related DeFi token only sold 25% of its supply, and sales continued to decline. Both points greatly exceeded my expectations.
Additionally, regarding the points raised by Tarun, I want to add that I predicted back in early 2024 that the application layer would generate substantial revenue. For example, Photon, Banana Gun, and even Uniswap have generated hundreds of millions in revenue, exceeding most DeFi protocols. Although I did not specifically predict the infrastructure of meme coins, the applications have indeed performed well, with revenue and profitability surpassing many protocols.
Haseeb:
My two biggest surprises are: firstly, the rise of the 'Tap to earn' model was unexpected, although there has been almost no news about it lately; for instance, the Hamster Combat game even attracted the military's attention in Iran. Secondly, there were no major cryptocurrency security incidents (L1/DeFi) this year, indicating significant improvement in industry security. Despite TVL (Total Value Locked) rebounding sharply, we did not see the huge losses of previous years, which is a positive signal.
Robert:
I want to add that the changes at the infrastructure level are noteworthy. The rise of Solana and Base as meme coin infrastructures is surprising. These two platforms have performed outstandingly in attracting new user activities due to low transaction fees and convenient token issuance mechanisms, with adoption speed and scale exceeding expectations.
Best New Mechanism
Tom:
I think it must be the binding curve and LP lock mechanism of Pump. I’m glad to speak first because I have a feeling this will be a popular choice.
Robert: I believe the best mechanism is the 'yield amplification' model, which can be seen in several stablecoin projects like Ethena and Usual. Its core idea is to allocate the profits generated by a certain underlying asset (which can be arbitrage trades, government bonds, or any assets) only to a portion of users, thereby significantly amplifying the yield. For example, if the annualized yield of the underlying strategy is 5%, when only a quarter of users participate in the distribution, those users' actual yield will be amplified to 20%. This mechanism has played an important role in the development of Ethena, and I believe we will see more projects adopting similar mechanisms in the coming months.
Tarun:
From my perspective, there are two outstanding mechanisms this year. The first is the liquidity guidance mechanism for meme coins; the second is innovations related to basis trading, particularly Market Maker Lending Pools. These lending pools can be traced back to the GLP pool launched by GMX at the end of 2021, and have now developed into Jupiter's JLP pool and HyperLiquid's HLP pool, among others.
The innovation of this mechanism lies in solving a key issue for decentralized exchanges: while centralized exchanges can directly provide collateral loans to market makers, decentralized exchanges previously lacked a similar mechanism. Through these lending pools, yield-seeking users can deposit assets into the pool, while perpetual contract traders can borrow these assets for market-making and pay fees to the depositors. This greatly enhances the capital efficiency of decentralized perpetual contract trading and is one of the important reasons for the historic increase in decentralized perpetual contract trading volume.
It is worth mentioning that projects like HyperLiquid can develop rapidly largely due to this lending pool mechanism. Currently, the Jupiter JLP pool has reached $1.5 billion in scale, and these infrastructures provide crucial support for on-chain basis trading. Although decentralized perpetual contract trading may never fully match the capital efficiency of centralized exchanges, this mechanism indeed significantly narrows that gap.
Haseeb:
This is indeed an important innovation. So how do these lending pools operate specifically, such as JLP or HLP? Are there specific third parties operating them?
Tarun:
It depends on the specific project. For example, GMX's liquidity provision is programmatic, with target weights determined by governance or multi-signatures. Meanwhile, HyperLiquid's HLP is directly managed by the project team. JLP and GLP are similar to AMMs (Automated Market Makers), where anyone can perform arbitrage operations. The key is that this mechanism effectively connects LP users seeking returns with traders who need funds for market making.
Best Meme
Haseeb:
I vote for Justin Sun's birthday photo. You might remember that this entrepreneur, who has drawn much attention in our industry and is said to be beloved by employees, posted a photo on his birthday. The photo is clearly AI-generated because he has 14 fingers! This could be one of the most embarrassing moments for one of the most successful entrepreneurs in the crypto industry, but this meme indeed left a lasting impression on me.
Robert:
Although strictly speaking, this might not count as a typical meme, I want to award the best meme to Pudgy Penguins. Perhaps because they just launched the PENGU token, with a fully diluted valuation of $5 billion at the opening. While I do not hold any Pudgy Penguins or PENGU tokens, I must acknowledge their achievement: continuously building during a bear market, turning an ordinary meme into significant success through sustained promotion and deep operations. Now they have launched penguin dolls, meme coins, and other peripheral products, and the community is thriving.
Tarun:
I want to choose Bonk. Mainly because BonkBot is a genius marketing strategy that helped Bonk grow from near-zero to a market cap of billions in just a year. If we talk about the most successful 'blue chip' meme coin in the Solana ecosystem, it is Bonk.
Tom:
This choice is indeed difficult, but I want to nominate Hugo Martingale. The operation of this Polymarket intern's Twitter account is excellent. Their content is fresh and interesting, often witty in the comments section, making it a very high-quality account.
Haseeb:
I’m glad to see that not everyone chose meme coins. To be honest, we might have discussed meme coins too much this year; I hope we can have fewer meme coin-related topics next year.
Best / Worst Transformation
Robert:
I want to combine the 'Best Transformation' and 'Best Recovery Story' awards and give them to MicroStrategy. Although their transformation from a mediocre business intelligence software company to a Bitcoin leveraged ETF was decided five years ago, 2024 is the year this transformation is truly recognized by the market. They not only broke through historical highs from the internet bubble era but also created an astonishing business model: by issuing convertible bonds to acquire funds at a higher premium than Bitcoin, and then continuing to purchase Bitcoin, forming a perpetual funding cycle.
Tarun:
I want to nominate the Babylon Protocol. Although their transformation technically began in 2023, it only truly materialized in 2024. Babylon initially provided Bitcoin timestamp services for the Cosmos chain, later developing 'remote staking' technology that allows users to stake using Bitcoin as collateral. Now their TVL (Total Value Locked) has reached $6 billion. Transforming from a single timestamp service to such a scale of business is one of the most successful business model transformations I have ever seen.
Tom:
I want to nominate the Democratic Party's 'worst transformation.' From the events at Mar-a-Lago (the former president's estate) to Biden's issuance of executive statements related to digital assets, and Kamala's vague statements on cryptocurrency investments, the entire process appears very chaotic. In contrast, Trump took a straightforward approach, saying what people wanted to hear and doing what people wanted, such as 'Free Ross.' The Democratic Party's performance on this issue is as disappointing as missing a shot just two inches from the goal.
Haseeb:
The best transformation I choose is the NFT community's shift to meme coins. For example, Miladys launched the CULT token, and Pudgy Penguins launched the PENGU token, with these meme coins' market caps even surpassing the original NFT projects. Interestingly, this transformation did not meet community resistance; no one accused them of deviating from NFTs. Although these tokens seem to have no practical use, this transformation strategy has proven surprisingly successful. This might relate to the choice of public chains; many high-quality NFT projects are on Ethereum, while meme coins are more developed on Solana, and this natural friction may explain why this transformation came relatively late.
Tom:
Interestingly, we find that in the cryptocurrency space, sometimes simple 'vibe coins' are more popular than those tokens that attempt to create serious value. This seems to confirm a principle: when issuing new tokens, there is no need to complicate things too much; people prefer to have multiple simple tokens rather than a complex conversion mechanism.
Most Disappointing Project
Tom:
I think the rebranding plan of MakerDAO to Sky is a major failure. The most obvious evidence of this failure is that even after the rebranding, people still refer to it as Maker rather than Sky. Although DAI's scale compared to USDS is still large, it is said they are considering reversing this rebranding, which is clearly an unnecessary and ineffective decision.
Haseeb:
I choose Bitcoin L2 projects as the biggest failure. At the beginning of the year, the market had high hopes for Bitcoin L2, expecting it to reach billions in TVL, believing the Bitcoin ecosystem would embrace DeFi. But the reality is that even with multiple projects launched, they all turned into 'ghost towns.' Almost no one discusses these projects, and founders rarely express intentions to launch projects on Bitcoin L2.
Additionally, celebrity tokens are also a significant failure. There was a time when people believed celebrity tokens would perform better than ordinary meme coins due to celebrity endorsements. For example, MOTHER belongs to this category. But these are essentially social tokens, and over time, their performance has been extremely poor. Initially, the market thought this would be a huge opportunity, but now it appears that expectation has completely fallen flat.
Robert:
I want to nominate Friend.tech and the decline of the social finance (Social Fi) craze it sparked. Earlier this year, Friend.tech was considered one of the hottest startup projects in the crypto space, but its development cycle was extremely short. From the initial concept to being highly sought after, then launching the V2 version and Friend tokens, it quickly faded into silence. Now the value of both the product and tokens has nearly reached zero, making it one of the few truly self-destructive projects. While projects like Farcaster are still developing, the entire crypto social space faces significant challenges.
2024 Best Comeback Story
Tom:
I want to nominate Coinbase. When cryptocurrency prices fall, Coinbase often becomes the 'punching bag' of the market. In 2023, they laid off thousands of employees, and many believed they might go bankrupt. However, with the launch of the Bitcoin ETF, Coinbase, as the custodian for the ETF, gained new development opportunities. Their overseas business, while not particularly outstanding, is growing steadily. Furthermore, they have received a stay of execution in their lawsuit with the SEC, marking a series of important victories in 2024. Notably, this is Coinbase's second consecutive year being recognized as the best recovery story, a 'double recovery' that is indeed impressive.
Haseeb:
I want to nominate Magic Eden. They were once considered a 'second-tier' NFT trading platform after OpenSea and Blur. However, by entering the Bitcoin ecosystem, particularly in the layout of BRC-20 tokens and Ordinals, they achieved impressive trading volumes. Their performance in the Solana ecosystem has also been quite good. Recently, they launched a platform token, marking a perfect transformation.
Robert:
In addition to MicroStrategy, I also want to nominate the entire Bitcoin ETF ecosystem. After years of rejections and failures, we finally welcomed breakthroughs this year. This is thanks to Grayscale suing the SEC and winning, paving the way for Bitcoin ETFs and Ethereum ETFs. The performance of these ETF products has been quite impressive, exemplifying a resurrection from 'death.' While some may see this more as a 'winner' story than a 'recovery' story, institutions like BlackRock have indeed shown strong capabilities in this process.
Tarun:
I choose the Move ecosystem as the best recovery story. Sui's market cap reached $50 billion, and Movement's startup funding exceeded $5 billion, with many DeFi protocols launching on these public chains. In the third and fourth quarters of 2023, while Solana received massive attention, the Move ecosystem seemed to be overlooked. But now, they have clearly achieved a strong recovery through improved user experience and optimization of other features.
Host: From these cases, we can see that in the cryptocurrency market, even projects that have gone through lows can achieve a strong recovery as long as they have the correct strategic positioning and execution. This also reflects the resilience and innovative capability of this industry.
2025 Predictions
Haseeb:
I have three predictions. First, Bitcoin will experience a pullback after reaching $150,000; second, DeFi tokens will see explosive growth; third, AI-related token prices will surge significantly, although the practical application of the underlying protocols may be relatively limited.
Robert:
I am more optimistic about Bitcoin, expecting it to reach $180,000, but without a sharp pullback. Second, I believe the U.S. will introduce dedicated legislation for cryptocurrencies 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 focus on three main areas. First, there will be a wave of consolidation in the application chain and L2 tracks, and we may see multiple merger cases, mainly due to high operating costs and transaction volume concentration issues. Second, the total market cap of AI agent-related tokens will grow at least five times, significantly increasing from the current $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 'the button' will achieve mainstream popularity, going viral on platforms like TikTok. Second, new crypto asset ETFs will be approved, but they may be for relatively traditional coins like 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 due to supply chain attacks or library vulnerabilities.
