Written by: Zeke, YBB Capital Researcher
Introduction
Starting from the boom of inscriptions to the election of the first crypto president, 2024 is about to come to an end. This year, Crypto has experienced an extremely unusual 'bull market,' with altcoins showing weakness, Meme dominance, and ultimately, all streams returning to BTC. Overall, although there have been some lows and discontent, Crypto is indeed moving towards a more positive direction. In the upcoming year of 2025, there are many directions worth paying attention to, and in this article, we will briefly look ahead to next year based on recent viewpoints.
I. About AI
At the current stage, blockchain abstraction projects often become excessively complex in the technical implementation process due to an over-pursuit of conceptual perfection, ultimately affecting the user interaction experience. Projects incorporating Intent architecture tend to be relatively complex, regardless of whether they are based on centralized designs (such as TG Bot), structured designs (combining on-chain and off-chain preprocessing), or distributed designs (such as Solver + Executor architectures). These intent projects often share common issues. For example, users still need to have a considerable understanding of DeFi, and the expression of intent must be clear, accurate, and simple. Current intent projects show a powerlessness towards complex and vague intents raised by users, and their implementation scope is quite limited. Therefore, since the concept was proposed by Paradigm in mid-2023 to today, so-called intent-centered projects have shown to be more noise than substance, providing little help in guiding new users and lowering operational thresholds. However, we are all aware that, from the development path of Ethereum Layer 2, the market demand for both is still urgent.
Let’s review the development of Layer 2 over the past few months. Among the leading projects, the Layer 2 alliance represented by OP Superchain has been growing steadily, with Zksync's Elastic Chain and Arbitrum Orbit ultimately forming their own alliance along this path. These alliances can achieve direct interoperability through solutions like interoperable clusters in the future, alleviating the current issue of excessive fragmentation and lack of interoperability in the Ethereum Layer 2 ecosystem. The competition among dozens of chains will also shrink into a competition among multiple forces. However, from a broader perspective, as the crypto market improves, new Layer 2 projects with architectures such as Movement and Fuel are also competing to launch their mainnet to capture the scarce liquidity in the altcoin market. For projects below the first tier, fragmentation and lack of interoperability are still exacerbating. Virtual machines based on different architectural designs may even have wallet plugins that do not interoperate. Let alone attracting new users; for ordinary blockchain users, the entire Layer 2 ecosystem is extremely complicated, and the development of non-financial application chains will also face great resistance under these circumstances.
For Ethereum to attract new users, ecosystem alignment is the biggest prerequisite. An ecosystem that requires users to be half-geeks to get started will never see 'Mass Adoption.' From the performance of Solana and Ton, which have developed against the trend this year, it is evident that strategies to lower user thresholds and provide a consistent, more Web2-like user experience have played an important role in ecological growth. To put it more directly, what these two ecosystems have done beyond promotion is to lower the difficulty of asset issuance and make the use of the chain feel more seamless. Therefore, for Ethereum, a comprehensive solution prioritizing user experience is necessary. However, given the traditional open attitude of Ethereum's core developers, it is naturally impossible to align the entire Layer 2 ecosystem through coercive means.
I believe that the solution that can first solve this problem is the AI browser agent. In the early days of ChatGPT's emergence, many people imagined that AI would revolutionize interaction with apps, allowing operations to span multiple apps and form a comprehensive super app. Taking travel as a common example, once the AI receives the user's travel needs, it can automatically complete ticket booking, customize travel routes, arrange meals, and time planning based on what the user says. If this AI also has long-term memory capabilities, then it can arrange plans that are more suitable for the user based on this memory.
Today, Google is about to launch the AI browser agent driven by Gemini, Project Mariner. In an example showcased by the director of Google Labs, Jaclyn Konzelmann, after installing the AI agent extension in the Chrome browser, a chat window pops up on the right side of the browser. Users can instruct the agent to perform tasks such as 'Create a shopping cart from the grocery store based on this list.' The AI agent then automatically navigates to a grocery platform and adds items to the cart for checkout. Once confirmed, the user will check out independently (the agent does not have payment authority). OpenAI is also set to launch a similar product next month.
It is worth mentioning that although Google's Project Mariner is currently only available to selected testers, I have already experienced similar agents developed for ordinary users in some Crypto projects. From several hours of trial, the current accuracy of the agent in implementing complex and vague intents can reach around 60-70% (cursor operation speed is relatively slow), and it can independently complete token transactions within various public chain Dexs and even cross-asset transfers from Ethereum to Layer 2. All I needed to do in this process was to inform it of my intent and input my wallet password.
Of course, this foundation still needs to invoke centralized model APIs, so what collision can Crypto produce with it? I believe that AI browser agents will not only become a better intent solution but will also promote the emergence of AI wallets, decentralized computing power, and decentralized data projects next year.
Consider a simple question: why has the beautiful concept of Agents only been realized today during the rapid development of AI? Looking back at the development process of OpenAI, it is not difficult to find that the development of pure language models has always been faster than that of image generation models, because the internet itself is a huge corpus, providing endless textual materials for training, while the limitations on the development of language models are more about computing power and energy. Agents require a lot of manual labeling and feedback, and the reasoning process is expensive. Crypto inherently possesses the ability to obtain labor through incentives. In this economic system, upper-layer users can provide a large amount of labeled data and feedback in a decentralized manner to earn tokens, while the lower layer can integrate decentralized computing power and data projects. After training is completed, it can also integrate with wallets and DeFi projects through SDKs to realize a truly meaningful AI wallet, ultimately forming a closed loop. Ideas for other AI agents can also be derived from this, as any AI agent suitable for Web3 will need computing power, labeling, and feedback to 'grow.'
II. Stablecoins
Stablecoins are always a battlefield of contention and a highly competitive track in Crypto. Regarding their application value, they have gained widespread recognition even outside the industry. For instance, this year, several giants in the traditional finance sector have entered the stablecoin market, including PayPal's PYUSD, BlackRock and Ethena's USDb, and VanEck's AUSD (serving Argentina, Southeast Asia, and other regions).
With the continued deepening of Tether and Circle's dominance in this track, new entrants into the stablecoin issuance space are gradually dividing into two categories. First, issuers of fiat-backed stablecoins are starting to turn their attention to emerging markets, primarily in South America, and specific application scenarios. Meanwhile, algorithmic stablecoins are generally shifting towards stablecoins backed by low-risk financial products as underlying assets, such as Ethena and Usual mentioned in the previous article. From a trend perspective, next year will likely see more Delta-neutral stablecoins competing for short selling liquidity in Cex, while hedging assets will gradually expand from BTC and ETH to higher-risk, lower-liquidity public chain tokens to compete for the remaining sinking market. As for Usual-like stablecoins backed by short-term U.S. Treasuries, I believe they will focus more on innovation in protocol tokens and income methods, as there are no better options than short-term Treasuries in terms of RWA asset types. However, compared to the limited liquidity in Cex, the competition for such stablecoins will be smaller, and the upper limit will be larger.
Overall, the development of stablecoins is gradually moving towards pursuing more stable underlying assets and decentralized governance. However, I hope that next year there will be completely decentralized and non-overcollateralized stablecoin protocols emerging.
III. Payments
With the compliance and accelerated adoption of stablecoins in various countries, the downstream payment track of stablecoins will also become a new competition focus. Heterogeneous public chains like Solana and Move, characterized by high TPS and low Gas fees, will become the main infrastructure for payment applications. Traditional payments are already a highly mature and competitive red ocean market. What transformation can blockchain provide? Firstly, two relatively simple and often mentioned points are to optimize cross-border payments, eliminate pre-funding requirements, making cross-border remittances faster, cheaper, and easier, thus solving the issue of trillions of dollars in pre-paid funds in traditional systems. Secondly, serving emerging markets, which I mentioned in previous articles, where the application value of stablecoins has already been demonstrated in regions like Asia, Africa, and Latin America. The strong financial inclusivity enables residents of third-world countries to effectively combat high inflation caused by government instability, and through stablecoins, they can also participate in some global financial activities and subscribe to cutting-edge virtual services.
The concept of 'PayFi' proposed by Solana Foundation manager Lily Liu at the seventh EthCC conference provides more imagination for the integration of blockchain and payments. This concept involves two core aspects: first is timely settlement, which is T+0 settlement. PayFi can achieve same-day settlement, even several settlements within a day, eliminating the delays and complexities involved in the traditional financial system, greatly increasing the speed of fund circulation. The second is Buy Now, Pay Never (BNPL), for instance, a user deposits $50 into a lending product and buys a cup of coffee worth $5. Once the accumulated interest reaches $5, that interest will be used to pay for the coffee, and the funds will be unlocked and returned to the user's account.
There are many ideas that can be extended from this, such as emerging projects' financing needs in usage scenarios can form a safer and more transparent entry and exit through PayFi on the blockchain. Currency exchange during travel no longer needs to rely on various physical financial institutions, and there is freedom in controlling payment and receipt timing (delayed receipts to earn interest, early payments to get discounts). The ways to earn will also diversify. Besides the interest earned from depositing stablecoins into lending products mentioned above, I personally believe that the types of stablecoins should also allow for free conversion. In the future, with the massive emergence of new stablecoins, users can choose the most suitable stablecoin type based on their risk tolerance, thus simultaneously obtaining stablecoin protocol tokens and higher stablecoin interest. For DeFi, if this payment system can become mainstream, its growth potential will be unimaginably vast.
IV. Dex
We have already mentioned the fragmentation and lack of interoperability issues in Layer 2 in the first section. This development path also presents a problem, namely the oversupply of block space, where the development of infrastructure far exceeds that of DApps. This issue will lead to the natural elimination of a large number of long-tail chains within a few years, and it is also a very troublesome issue for Ethereum, which fails to receive positive feedback from Layer 2 for DA pricing missteps.
Looking back, the recent round of counter-cyclical growth in public chains has largely relied on their strong communities, ecosystems, and promotional advantages, supplying these advantages to asset issuance platforms to achieve rapid growth in overall TVL. Therefore, not every Layer 2 can replicate this attention economy; the lack of super applications will remain a real issue to face next year. Following the trend, besides what we mentioned above, the future demand for AI agents may be a way out. Other relatively obvious short-term trends include on-chain order book Dexs, privacy, payment-related stacks, decision-making tools, etc.
I personally believe that on-chain order book Dex will become the mainstream in the next generation of Dex, as the complexity of the technical path has been continuously increasing based on the development of AMM, while the efficiency gains have become increasingly limited, which we have also mentioned in articles related to Uni. However, the limitations in performance and Gas for layer two are still quite obvious, and improvements in matching algorithms and innovations in Gas solutions will become key challenges.
V. Asset issuance remains the main theme
From 2023 until now, from inscriptions to the current AI Meme platforms, the provision of asset issuance methods has been a hot topic over the past year. If we extend this time span a bit, in fact, since the ICO era, asset issuance can be considered the only main theme in the crypto space. The external packaging and the barriers to issuance are changing. On the positive side, users' competitive demands have driven the advanced development of Infra and DeFi. As this technology becomes known and recognized by the world, blockchain has stepped into the mainstream and integrated into reality. On the negative side, this competition has become more pure and absurd; the reduction in the difficulty of asset issuance also means that this dark forest is becoming more dangerous. Nowadays, it only takes a simple click with an image and a few sentences to set off a grand zero-sum game. Why not bring it back to a more positive aspect? Promote the progress of the industry through competition.
For example, some current AI Memes are starting to shift towards practical agents rather than early versions of nonsensical AI agents. The recently popular DeSci can also be referred to as the 'ICO of scientific research.' Although the current core is driven by Memes, in the long run, DeSci can promote greater transparency, ease of dissemination, financing, and communication in traditional research by leveraging various advantages of blockchain. However, whether it can ultimately land and how it will evolve still remains a question mark.
In fact, similar ideas to DeSci have also been mentioned in my article about GameFi, such as the situation of independent game funding and personnel shortages, and how to effectively promote independent game development through blockchain. The issue with blockchain financing is that the threshold for asset issuance is too low, with too few restrictions, leading to overly strong fundraising capabilities (which can also be said to be due to the extremely low entry barriers on-chain). How to impose rules to limit the use of funds and force project parties to continuously create truly valuable things is also a key point we should consider.
Let the players play and let the builders advance; this is the prerequisite for the continuous development of blockchain. Next year, we may see more versions of 'ICO,' but what I hope is that this feast of competition can push for the next 'DeFi Summer.'
