Original Title: Frontier Ideas For 2025
Original source: Multicoin Capital
Compiled by: Lawrence, Mars Finance
2025 is expected to be a key year for the crypto industry. The road to the first regulatory framework supporting cryptocurrencies, combined with the technological maturity of Layer 1 blockchains, DeFi protocols, DePIN networks, and stablecoins, creates fertile ground for the next wave of frontier innovations.
In keeping with our tradition, we will share the ideas and opportunities that excite us the most for the coming year.
Decentralized Physical Infrastructure Network Robots (DePIN Robotic) and Zero Employee Companies
— Managing Partner Kyle Samani
DePIN Robotic—It is rumored that the incoming Trump administration will push to elevate the regulation of autonomous driving (AD) from the state level to the national level, creating a unified standard for autonomous driving companies. As the scale of GPU clusters continues to grow (for example, over 100,000 H100 GPUs), transformer-based autonomous driving technologies will become more mature and are expected to be widely applied in the real world. Following this, I anticipate explosive growth in DePIN based on robotics. Many startups have already raised funds from non-crypto VCs but have yet to truly commercialize. I am optimistic that many of them will adopt the DePIN model, shifting risks from the balance sheets of development companies to global robot professionals and 'prosumers' (producers and consumers). Many early adopters of these robotic products will capture critical data essential for the development of autonomous robots. I know of one company in this space today—Frodobots—and I look forward to more. Our portfolio company Hivemapper, while not explicitly a robotics company, is exploring many similar ideas.
Zero Employee Companies—The foundation of zero employee companies is artificial intelligence. With OpenAI's o3 and other more advanced thinking chain reasoning models, models are reaching a level where they can think, plan, execute, and self-correct. This lays the groundwork for AI agents to execute all tasks in business.
To make a zero-employee company operate normally, it will need human guidance, as AI will inevitably make mistakes and may exceed its context window. Over time, I expect the degree of human guidance to decrease as AI continues to improve its self-correction and expand its context window. I believe the governance of these zero-employee companies may be conducted through a DAO, and I expect that the crypto capital markets will fund the ambitious attempts of zero-employee companies.
Startups often succeed while large companies fail because they face unique constraints. I believe the zero-employee constraint will lead to some incredible breakthroughs for all business operations.
On-chain Securities
— Co-founder and Managing Partner Tushar Jain
With the Trump administration's rise and the Republican Party's comprehensive victory in Congress, on-chain securities have finally welcomed meaningful takeoff.
Transactions on blockchains like Solana can be completed almost instantaneously, eliminating the common waiting times in traditional finance. Faster capital movement improves capital efficiency and should lead to more effective pricing.
Blockchain ensures that all participants can access real-time, immutable records of transactions. This level of transparency and security stands in stark contrast to the opaque and sometimes risky centralized databases of traditional financial institutions. The transaction costs on blockchain networks are significantly lower than those of traditional banking systems; just compare the cost of sending stablecoins on Solana ($0.001) to the cost of sending a wire transfer ($30) for a glimpse of this. Solana's token scalability now allows for precise granular control over tokenized securities. Issuers can restrict their security holders to whitelisted addresses, recall tokens under court orders, and comply with other securities laws or transfer agent requirements or best practices.
There is no doubt that the near-instant finality, cheap transactions, and transparency of blockchain offer better settlement than the slow, expensive, and opaque traditional financial rails. The only real barrier is regulation, and a more innovation-friendly SEC could open the door for the tokenization of securities.
I do not believe that publicly traded stock will be the first tokenized security adopted by the mass market. Markets with lower liquidity, higher opacity, and greater benefit from tokenization are more likely to be adopted first. This could be startup equity, as there is no reason to pay Carta or Angelist to manage when blockchain can manage the cap table for free. It could be fixed income instruments that Figure has been studying for years. It could be LP interests in funds.
Buy Now, Pay Never—Consume Your Portfolio, Portfolio Margining
— Investor Spencer Applebaum
Based on Tushar's ideas, when all assets are programmable and tradable on-chain, we will begin to see interesting new products emerge. Here are a few examples:
Buy Now, Pay Never—Affirm and Klarna have promoted the idea of buy now, pay later, and I believe you’ve seen these widgets on Amazon and other merchant sites. Today, on-chain users can earn about 8% on SOL and about 15% on stablecoins. What if users didn’t need to prepay subscription fees but could deposit their tokens with the merchant (from web2 companies like Netflix to web3 companies like Dune Analytics), and the merchant would earn staking/lending rewards over time? Users' tokens would be locked for a period to guarantee payment. We believe there is a strong consumer psychology factor here; the opportunity cost of earnings seems more acceptable than prepayment.
Consume Your Portfolio—When all assets are tokenized and aggregated in one place (a web3 wallet), it makes sense for users to use their portfolio to pay for mid to large items. Imagine Alice has $10,000 in BTC, $10,000 in interest-bearing USDC, $10,000 in TSLA stock, and $10,000 in gold. She wants to buy a $4,000 sofa. She doesn’t have to convert her USDC to fiat, wait for a bank transfer, send payment, and then execute the reverse process to rebalance her portfolio. What if she could automatically sell $1,000 of each of her four holdings on-chain and pay the sofa merchant immediately? She would still be fully allocated to her existing portfolio without having to think about the rebalance process.
Portfolio Margining—In the next 3-5 years, with the emergence of major cryptocurrency brokers and unified super protocols, users should be able to hold all assets across margin. For example, Alice should be able to short BTC perpetual contracts using her AAPL stock and borrow USDC on-chain. Alternatively, she should be able to use her tokenized whiskey as collateral to purchase tokenized debt on-chain. We are starting to see this in an integrated way (for example, Ostium bringing forex trading on-chain), but it will become clearer when spot assets are tokenized.
On-chain validation of off-chain states
— Investment Partner Shayon Sengupta
Assets like Bitcoin and Solana represent a key step in the development of cryptocurrency. These systems are fundamentally about money; they enable the storage and transfer of value through permissionless channels on a global scale. Today, the cryptographic primitives that allow these systems to operate are beginning to interweave with non-ledger systems, unlocking new markets. In the next 12 months, cryptography will establish itself as a verification layer for data and computation in three novel ways: network proofs, privacy-preserving data processing, and identity/media traceability.
I see it as a fusion of 'monetary cryptography' and 'verifiable cryptography', which will serve as a coordinating layer to spawn new economic models and incentive mechanisms.
Emerging Markets: Zero-Knowledge Proofs Unlock New Possibilities
The first opportunity is zkTLS and the market it brings. zkTLS refers to building zero-knowledge proofs through TLS signatures in web pages to verify any data unit on the internet (for example, your credit score on Equifax or your exercise history on Strava) in a fully untraceable and tamper-proof manner. Some teams have begun to deploy zero-knowledge proofs in web sessions to build untraceable and anti-fraud applications. Our investments in p2p.me and ZkMe are early examples of this. p2p.me is a cash recharge/cash withdrawal platform in India that uses network proofs to bypass the fractured market structure in the region. ZkMe is a system for sovereign verification of KYC credentials that allows applications to verify user identities in a privacy-preserving manner. The same principle can be extended to dozens of new markets, such as ticketing, reservations, and other systems where fraud is a major liquidity bottleneck.
Homomorphic Encryption: Unlocking the Potential of Artificial Intelligence
Secondly, fully homomorphic encryption (FHE) is about to enter its golden age. As the returns on training AI systems on public datasets diminish, post-training and fine-tuning in private or confidential environments will become increasingly critical. This creates entirely new design space for coordinating once inaccessible datasets as inputs to models, especially as vast amounts of valuable enterprise and consumer data continue to shift from local to cloud systems. Token-based incentive mechanisms will play a key role at this layer, and breakthroughs in this field will elevate top foundational models.
Identity Verification and Media Traceability: Essential Tools in the AI Era
In the post-AI era where content generation costs are close to zero, identity and content authenticity verification will become essential elements in consumer applications. Early systems like Worldcoin, Humanity Protocol, and Humancode use cryptographic proofs to verify biometric information or government-issued credentials, utilizing token incentives as the primary means to mobilize participants at scale. Similarly, standards like C2PA differentiate between genuinely captured media and AI-generated media by tagging content at the hardware level, but large-scale adoption of these standards at the application level may require some form of token-based coordination mechanism to overcome consumer behavioral inertia. These tools are critical for addressing the risks of an AI-saturated consumer internet.
Transactions move towards multi-faceted, full-stack media companies
— Investor Eli Qian
The trend of transactions moving towards multiplayer gaming—sharing financial gains and losses and speculating as a group—is a behavior rooted in human nature that spreads easily. People are eager to talk about how much they've made (or lost!) in stocks, sports betting, and even meme coins. However, most popular cryptocurrency, stock, and sports betting trading platforms are primarily designed for single-user experiences. Robinhood, FanDuel, BONKBot—none of these prioritize multiplayer experiences. Nevertheless, the demand for social trading is undeniable. Nowadays, users create their own temporary social experiences through online forums and group chats. A large portion of content on Crypto Twitter revolves around these discussions.
One of the biggest advantages of cryptocurrency is permissionless liquidity. It opens the door for anyone to build multiplayer trading tools for crypto assets. I am very much looking forward to seeing developers leverage the inherent viral nature of social trading to create multiplayer experiences in 2025. Such products will allow users to share trades, compete on profit and loss sheets, and collaboratively build positions with a single click or tap. The design space is vast, covering Telegram bots, Twitter Blinks, Discord mini-apps, and more. While 2023 and 2024 witnessed the rise of single-user tools like BONKBot and BullX, 2025 will be a year when trading moves towards multiplayer gaming.
Full-stack media companies—People have often attempted to use tokens to enhance media and content, but few companies have been able to fully realize their potential. However, we are beginning to see the rise of media companies that control end-to-end content creation, including tokens, distribution, and human capital. These 'full-stack' media companies have the capability to push the primitives of cryptocurrency farther than ever before. For example: athlete tokens, creator tokens, live broadcasts with prediction markets, etc.
One example is Karate Combat. It didn’t build its product around existing UFC fighters but instead started a new fighting league from scratch, giving them more control over rules, distribution, and athletes. While the use of tokens for UFC fighters is limited, Karate Combat allows token holders to vote on the fighters' training regimens, match attire, or anything else—this is only possible if Karate Combat controls the token design and athlete contracts.
The future of live broadcasts, sports leagues, podcasts, and reality shows will achieve deep vertical integration in content, distribution, tokens, and human capital. I am very much looking forward to investing in and consuming the next generation of token-enhanced media.
The Rise of Alpha Hunters
— Investor Vishal Kankani
Some decisive events occurred in 2024, foreshadowing interesting new phenomena that will emerge in 2025.
First, issuing a new token costs almost nothing (about $0), and almost anyone can do it without permission. This has led to an astonishing number of token issuances in 2024. Most of these issuances are meme coins, whose lifespans are measured in hours and are extremely short.
Secondly, the market sentiment in 2024 has returned to a high liquidity, low fully diluted valuation (FDV) fair distribution model for token issuance—reminding us of the Initial Coin Offering (ICO) era of 2017. In such a market, centralized exchanges (CEX) struggle to keep up with the pace of new coin listings, and we expect this to continue into 2025 (as they have their own listing processes), which will incentivize people to turn to on-chain trading and bring more liquidity to decentralized exchanges (DEX). Therefore, DEX will gain more market share over CEX in the coming year. With explosive growth in the number of tokens and DEX trading activity, active traders will need more powerful tools and models to identify emerging tokens in real-time, analyze market sentiment and on-chain metrics, identify vulnerabilities, mitigate risks (such as exit scams), and execute trades efficiently.
This leads us to the third thing happening in 2024: AI agents. So far, we have seen AI agents creating content on social media to attract attention to their respective tokens. I anticipate the next iteration of AI agents will be 'alpha hunters'—that is, their sole task will be to seek out excess returns (alpha) and trade autonomously in real-time.
Wave of Cryptocurrency Institutionalization
— Partner Matt Shapiro
We are entering the beginning of the institutionalization phase of cryptocurrency, and this process will happen at an astonishing pace.
Over the past five years, the crypto industry has made significant strides in major technological advances, product-market fit, and substantial improvements in user interface/user experience (UI/UX), but institutional players have effectively stagnated in the cryptocurrency space. The combination of regulatory and professional risks has made it difficult for many financial institutions to effectively enter this space, let alone provide their clients with even the most basic crypto products. With the rise of a pro-crypto government in the U.S. and the record success of Bitcoin ETFs, we are about to see the complacency of institutions from the past five years racing to catch up and find ways to support cryptocurrencies as quickly as possible.
In 2024, there will be $35 billion in Bitcoin buying demand that cannot or will not simply go through Coinbase. As most asset management companies and large brokerages have yet to fully launch their crypto businesses, by 2025, more funds will be able to enter the cryptocurrency market. We will see a plethora of ETFs launched to meet and exploit this demand. This will include ETFs for new crypto assets like Solana (SOL), ETFs that hold multiple crypto assets, and ETFs that mix crypto assets with traditional assets like gold, stocks, or credit. There will be leveraged ETFs, inverse ETFs, volatility-suppressing ETFs, staking ETFs, and more. Essentially, every combination you can think of that bundles crypto assets for institutional and retail investors will be explored.
We will see major financial institutions competing to roll out fundamental financial products around cryptocurrencies. Every financial institution should explore creating product lines that enable their clients to trade crypto products. Financial institutions should seek to custody crypto assets and provide credit for these assets, just as they do today for more traditional assets. We may also see a significant increase in stablecoin issuers. Any bank accepting deposits should seek to issue local stablecoins. I emphasized in my conversation with Visa's Cuy Sheffield at the Multicoin Summit in 2024 that every company needs a stablecoin strategy, just as 'e-commerce' ultimately became part of 'commerce'; 'stablecoins' will gradually permeate every aspect of business and become an indispensable part of business activity.
These are just the tip of the iceberg, and while this may not be the most technically ambitious thing in the crypto space, the scale and scope of its distribution and the capital involved are immense.
